Important Industry Alert: New Executive Order Requires Federal Contractors to Provide Paid Sick Leave

051222_5365_0261_ashsThis week President Obama signed an Executive Order (EO) requiring federal contractors to give their workers the ability to earn up to seven days of paid sick leave each year. Employees will earn an hour of paid leave per every 30 hours of work when the policy begins with 2017 federal contracts.

According to the press release issued by the White House, this EO will provide approximately 300,000 people with access to more sick leave than they ever had before. Workers will be able to use paid sick leave to care for themselves, a family member, such as a child, parent or a spouse, or a domestic partner, or another loved one.

The EO, entitled Establishing Paid Sick Leave for Federal Contractors will apply to new contracts and “contract-like instruments,” which will be defined by the Secretary of Labor. The EO applies if:

  • It is a procurement contract for services or construction;
  • It is a contract or contract-like instrument for services covered by the Service Contract Act;
  • It is a contract or contract-like instrument for concessions, including any concessions contract excluded by the Department of Labor (DOL) regulations at 29 C.F.R. 4.133(b); or
  • It is a contract or contract-like instrument entered into with the Federal Government in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public; and
  • The wages of employees under such contract or contract-like instrument are governed by the Davis-Bacon Act, the Service Contract Act, or the Fair Labor Standards Act, including employees who qualify for an exemption from its minimum wage and overtime provisions.

For contracts or contract-like instruments covered by the Service Contract Act or the Davis-Bacon Act, this order shall apply only to contracts or contract-like instruments at the thresholds specified in those statutes. For procurement contracts in which employees’ wages are governed by the Fair Labor Standards Act, this order shall apply only to contracts or contract-like instruments that exceed the micro-purchase threshold. This EO will not apply to grants.

If you have any questions or would like more information on this new EO, please contact Terry Grant  at 410.307.6426 or tgrant@katzabosch.com.

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