Details Still Uncertain on Contractor Paid Sick Leave

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By Martin Berman-Gorvine

Nov. 4 — President Barack Obama's executive order that federal contractors and subcontractors offer their employees paid sick leave still has a number of areas of uncertainty that final regulations have yet to clear up, two management-side attorneys with Littler Mendelson P.C. said in a Nov. 4 webinar sponsored by the law firm.

Obama signed EO 13,706 Sept. 7 (33 HRR 960, 9/14/15). It takes effect Jan. 1, 2017.

“The job protected part of the leave is really the important thing to keep in mind,” said Pam Salgado of Littler's Seattle office. Contractors can set a limit for paid sick time accrual of 56 hours, she said.

One source of uncertainty is the regulatory process. David Goldstein of Littler's Minneapolis office said the labor secretary has until Sept. 30, 2016, to publish a final rule implementing the order. The Federal Acquisition Regulatory Council “then has to issue regulations to provide for the inclusion in covered solicitations and contracts a provision imposing the obligation to provide paid sick leave,” he said. Given that timeline, Goldstein said, “it's possible these provisions won't start appearing in covered contracts till after Jan. 1, 2017.”

While that won't exempt covered contractors and subcontractors from having to provide paid sick leave, if the contracting agency has to add the requirement into a contract retroactively, it will then have to update the cost to the contractor to include the mandate, he noted.

The criteria for which contractors and subcontractors are covered will be very different than for federal affirmative action requirements, Goldstein said. “Just because you're not a contractor for purposes of federal affirmative action, doesn't mean the paid sick leave requirements will not apply to you,” he said.

Since the language in the executive order about which employees are covered is similar to that in Obama's EO 13,658, which imposed a minimum wage of $10.10 per hour on federal contractors' employees (32 HRR 146, 2/17/14), Goldstein said it's reasonable to look to the regulation implementing that to get an idea of how it will work for paid sick leave.

However, he cautioned, while compliance with the minimum wage EO wasn't difficult in many areas where contractors were already paying $10.10 or more an hour, fewer contractors are likely to already be complying with the paid sick leave requirements laid out under EO 13,706, which will make the job of complying with it and ensuring subcontractors do the same that much harder.

Interaction With Local Laws

Another source of trouble for federal contractors will be clashing requirements between EO 13,706 and the movement toward state and local laws mandating paid sick leave, which has now led to 26 such laws and ordinances across the U.S., according to Salgado.

She noted that San Francisco enacted the first paid sick leave law in the U.S. in 2006 (it took effect Feb. 5, 2007) (24 HRR 1211, 11/13/06), and Connecticut became the first state to enact one, which took effect Jan. 1, 2012, and is limited to service workers (29 HRR 738, 7/11/11).

The town of Elizabeth, N.J., recently became the 10th in New Jersey to enact a paid sick leave law, she said. Other entries include:

• California (32 HRR 931, 9/8/14), and in addition to San Francisco, Oakland, Emeryville, Long Branch and Los Angeles, the latter two cities with limited applicability;
• New York City (31 HRR 685, 7/1/13), which expanded the law after passing it (32 HRR 205, 3/3/14);
• Washington, D.C. (26 HRR 264, 3/10/08);
• Oregon, a statewide law preempting Portland's law as of this coming Jan. 1 (33 HRR 649, 6/22/15);
• Massachusetts (32 HRR 1199, 11/10/14);
• Philadelphia (33 HRR 176, 2/23/15) and Pittsburgh, Pa. (the latter taking effect this coming Jan. 11);
• Montgomery County, Md., taking effect this coming Oct. 1, 2016 (33 HRR 905, 8/24/15);
• Seattle (29 HRR 1048, 10/3/11) and Tacoma, Wash.(33 HRR 342, 4/6/15), the latter taking effect Feb. 1; and
• SeaTac, Wash., applying to transportation and hospitality workers only (31 HRR 1327, 12/16/13).


Salgado said as a rule, the laws include part-time and temporary employees, except in Connecticut and Philadelphia; Pittsburgh excludes seasonal workers. The laws do not allow exemptions based on where employers are located, she said.

Additionally, they protect the jobs of employees who take paid sick leave from adverse actions; they allow existing leave banks to be used if there are no shortfalls; and they require employers to allow carry-over of sick leave from one calendar year to the next, she said.

Patchwork Requirements

The laws contain varying specifications on how employees accrue paid sick leave, Salgado said. “Generally, accrual is required at the rate of one hour for every 30 hours worked.” Exceptions include Connecticut, Philadelphia and Tacoma, where the rule is one hour for every 40 hours worked; Pittsburgh, where it is one for 35; and D.C., which has a more complicated scheme, she said.

The “use caps” employers are allowed to impose on employees also vary, Salgado noted, between 24 and 108 hours. California's law, for example, specifies a use cap of 24 hours or three days. “Increments of use”—the units of sick time that employers can restrict employees to—are another source of variability, with New York City specifying a minimum four hours, the longest Salgado knew of, whereas elsewhere, “it can be the minimum increment your pay system allows,” such as 10 minutes.

Some jurisdictions, but not all, have a threshold number of hours the employee must have worked to qualify for paid sick leave, and some have limitations based on the number of employees in the jurisdiction—50 in Connecticut and D.C., she said.

The interaction between the executive order and the varying state and local laws is yielding “important differences between paid sick leave under the EO and other jurisdictions” in requirements relating to the accrual rate and cap, the carry-over cap, the use cap, the increments of use, the notice an employee must give, certification, verification and reinstatement of an employee's leave bank upon rehire, Salgado said.

To contact the reporter on this story: Martin Berman-Gorvine in Washington at

To contact the editor responsible for this story: Simon Nadel at

For More Information 
The text of the executive order mandating paid sick leave for federal contractors and subcontractors is available at