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In September 2015, we published an advisory titled Are You a Federal Subcontractor Without Even Knowing It –Revisited, which discussed President Obama’s Executive Order 13706 (dated September 7, 2015, Federal Register Volume 80, pages 54697-54700).  Following the Executive Order, the Labor Department’s Wage and Hour Division has now issued its Final Rule, in excess of 400 pages, which was published in the Federal Register on September 30, 2016, in 29 Code of Federal Regulations Part 13. 

Under the Executive Order and the Labor Department’s Final Rule, employees of federal contractors and subcontractors will be required to provide one hour of paid sick leave for every 30 hours worked or in connection with a covered contract.  In effect, employees will be entitled to paid sick leave for up to seven days (56 hours) annually.
The Executive Order and the Labor Department’s Rule apply to new contracts and replacements for expiring contracts with the Federal Government that result from solicitations issued on or after January 1, 2017.  It is projected that the Rule and the Executive Order apply to four major categories of contractual agreements with the Federal Government:  (1) procurement contracts for construction; (2) service contracts; (3) concession contracts; and (4) contracts in connection with federal property or lands or related to offering services for federal employees, their dependents or the general public.  It is emphasized that it is not merely a government contract that applies to contracting parties but also covers any subcontract of a covered contract falling into any one of the four categories.
A number of conditions may qualify for use of the paid sick leave, for example:
  1. a physical or mental illness, injury or medical condition;
  2. obtaining diagnoses, care or preventive care from a healthcare provider;
  3. caring for a child, parent, spouse, domestic partner or any other individual related by blood or affinity with the employee who has any of the aforementioned conditions and requires care; and
  4. domestic violence, sexual assault or stalking if the time absent from work is for purposes of obtaining counseling, to seek relocation, to seek assistance from victim services organizations or to take related legal action pertaining to any related civil or criminal legal proceeding.
The Labor Department’s Wage and Hour Division is the enforcing agency.  An employer is also alerted that federal contractors and subcontractors are subject to review and examination by the Labor Department’s Office of Federal Contract Compliance Programs.  Thus, the administration of the paid sick leave rule under Executive Order 13706, together with the President’s previous Executive Order 13658 dealing with minimum wages under federal contracts, will impact on a contractor’s or subcontractor’s costs in the performance of the particular government contract and the administrative oversight required to comply with the Executive Orders.
As previously mentioned, the Labor Department’s paid sick leave rule is extremely lengthy and complex.  Initially, the Labor Department published a required posting notice that federal contractors and subcontractors are required to issue.  The Labor Department has issued an authorized form to be used.
The Labor and Employment attorneys at Weston Hurd are available to address your questions and concerns regarding the impact of Executive Order 13706 and the Labor Department’s final rule regarding paid sick leave and implementing Executive Order 13706, as well as the President’s previous Executive Order pertaining to federal contract minimum wages.  Please contact your Weston Hurd lawyer with any questions.