According to a report in the New York Times, the White House is currently considering an Executive Order (“EO”) requiring federal contractors to provide paid sick leave to their employees. According to the report, the “Executive Order Establishing Paid Sick Leave For Contractors,” if issued, would mandate that some federal contractors provide their employees up to 56 hours (7 days) of paid sick leave per year beginning January 1, 2017. The New York Times obtained a confidential and pre-decisional draft of the EO which sheds light on what federal contractors can expect if and when the EO is issued.

Although much can change before such an EO is issued, some key points from the draft are provided below:

Applicability

As contemplated in the draft, the sick leave requirement would only apply to certain new federal contracts: (1) construction contracts covered by the Davis-Bacon Act; (2) contracts for services covered by the Service Contract Act; (3) contracts for concessions; and (4) contracts in connection with federal property or lands and related to offering services for federal employees, their families, or the general public. For any covered contract, subcontractors would also be required to provide paid sick leave to any employees performing work on the contract.

Accrual and Carryover of Sick Leave

Under the draft proposal, covered employees would accrue paid sick leave at a rate of 1 hour for every 30 hours worked. No contractor would be permitted to cap accrual at less than 56 hours per year, which equates to 7 days of leave. Moreover, covered employees would have to be allowed to carryover all accrued unused sick time.

Uses of Sick Leave

As currently contemplated, covered employees would be permitted to use paid sick leave for a variety of purposes. Those include: (1) a physical or mental illness, injury, or medical condition; (2) obtaining diagnosis, care, or preventative care from a health care provider; (3) caring for a child, parent, spouse, domestic partner, or any other individual related by blood or affinity, whose association with the employee is the equivalent of a family relationship, and who has any of the needs listed in (1) and (2) above; and (4) absence resulting from domestic violence, sexual assault, or stalking, if the absence is a result of seeking medical attention, obtaining counseling, seeking relocation, seeking assistance from a victim services organization, or taking related legal action.

Requesting Leave and Certifications

The draft proposal provides that paid sick leave requests would have to be made at least 7 calendar days in advance, where the need is foreseeable, or as soon as practicable in other scenarios. In addition, covered employees would be expected to provide their employer with the expected duration of the leave. If an employee is absent for 3 or more consecutive days on paid sick leave, the employer would be able to request a certification from a health care provider (if the absence is related to a medical condition) or from an appropriate individual or organization (if the absence is related to domestic violence, sexual assault, or stalking).

Prohibition on Retaliation and Interference

Under the proposal, covered employers would be prohibited from interfering or retaliating against any employee for using, or attempting to use, sick leave covered by the EO. Additionally, the proposal prohibits retaliation against any employee for assisting another employee in asserting his or her rights under the proposed EO.

Implementation

Under the proposal, the Department of Labor is required to issue regulations by September 30, 2016. According to the proposal, the mandates contained in the EO would only apply to contracts entered into after January 17, 2017.

Key Takeaways

The EO proposal represents a continuation of the Obama Administration’s trend of imposing on federal contractors labor protections that cannot pass through Congress. In the past 18 months alone, the Administration has imposed minimum wage, pay transparency and LGBT non-discrimination requirements on federal contractors. Obviously, should the Administration issue the proposed EO, federal contractors will face significant new financial and regulatory burdens.

We will continue to monitor this issue and post on any new developments.