New Paid Sick Leave Requirements for Federal Contractors and Subcontractors

The Department of Labor has published a new rule that requires employers to provide up to seven days of paid sick leave a year to employees working on federal contracts or subcontracts. The rule applies to contracts that are solicited, renewed, extended or amended on or after January 1, 2017.

Covered contracts include: (1) procurement contracts for construction covered by the Davis-Bacon Act; (2) service contracts covered by the Service Contract Act; (3) concessions contracts; and (4) other contracts that provide services in connection with federal property or lands. Some contracts must also meet certain dollar thresholds to be covered. All subcontracts under covered contracts will be covered, regardless of the value of the subcontract.

Under the new rule, employees earn one hour of paid sick leave for every 30 hours worked on or in connection with a covered contract or subcontract, up to 56 hours of paid sick leave per year. Employees must be permitted to carry over up to 56 hours of paid sick leave to the next year.

Employees may only elect to use paid sick leave to cover time when they would have otherwise been working on or in connection with a covered contract or subcontract. Employees may use this required paid sick leave:

1. To care for the employee’s own or a family member’s physical or mental illness, injury or medical condition;
2. To obtain a diagnosis or preventive care for the employee or a family member; and
3. For reasons related to domestic violence, sexual assault or stalking.

Employers must respond to a request for leave as soon as practical (usually within hours of the request), and denials must be explained in writing. Employers may not ask employees to provide documentation of the need for leave unless the employee has used three or more consecutive days of leave.

Employers are required to provide a specific notice to employees regarding their legal entitlement to paid sick leave for work performed on covered contracts and subcontracts.

Finally, employers must keep detailed records regarding their provision of paid sick leave, including but not limited to, records of: (1) employee notifications; (2) employees’ requests to use, and actual use of, paid sick leave, and (3) written denials of requests to use paid sick leave.

The new rule is but the latest in a series of recent laws and regulations pertaining to mandatory sick leave. By way of example, the District of Columbia and Montgomery County, Maryland each have their own standards with respect to paid sick leave, and these laws are not identical to each other or to the new DOL rule. Therefore, compliance with one law does not ensure compliance with all applicable laws, and employers must be cautious and thorough in evaluating their various sick leave obligations.

Please contact Doug Desmarais (ddesmarais@smithdowney.com) or Kerstin Miller (kmiller@smithdowney.com) if you have questions about this new rule or if we can assist in full compliance with mandatory sick leave laws.