DOL Issues Final Federal Contractor Sick Leave Rule To Take Effect in 60 Days

Submitted by Firm:
Cross, Gunter, Witherspoon & Galchus, P.C.
Firm Contacts:
Abtin Mehdizadegan, J. Bruce Cross, Misty Wilson Borkowski
Article Type:
Legal Update

The U.S. Department of Labor (DOL) has issued the long-awaited "Establishing Paid Sick Leave for Federal Contractors" Rule (the Rule), which follows President Obama's Executive Order 13706 (September 2015).  The Rule becomes effective November 29, 2016, which is 60 days from the date of publication, September 30, 2016.

The Rule will apply to contracts issued on or after January 1, 2017, including replacements for expiring contracts. Coverage of contracts and employees under the Rule is nearly identical to coverage under the regulations implementing Executive Order 13658, which requires the payment of a minimum wage to employees of Federal Contracts, except this Rule also covers employees who qualify for an exemption from the FLSA's minimum wage and overtime provisions and certain contracts with the U.S. Postal Service.

The Rule applies to four types of contracts: (1) procurement contracts covered by the Davis-Bacon Act; (2) service contracts covered by the Service Contract Act; (3) concession contracts; and (4) contracts in connection with federal property that are related to offering services for federal employees, their dependents, or the general public.

Under the Rule, federal contractors may choose to award employees paid sick time in one lump sum of 56 hours at the beginning of the measuring year or, alternatively, allow employees to accrue 1 hour of paid sick leave for every 30 hours worked on or in connection with a covered contract. A federal contractor may limit sick leave accrual to 56 hours per year. A contractor's existing paid time off policy may satisfy these requirements.

Under the proposed rule, an employee may use paid sick leave due to:

  • a physical or mental illness, injury, or medical condition
  • obtaining diagnosis, care, or preventive care from a health care provider
  • caring for a child, parent, spouse, domestic partner, blood relative or an individual whose close association with the employee is the equivalent of a family relationship
  • obtaining services related to domestic violence, sexual assault, or stalking

Beginning January 1, 2017, federal contractors will also be required to post a notice to employees of the paid sick leave requirements.