DOL Goes to Work on Federal Contractor Sick Leave



Up to seven days of paid sick leave per year: this good news resonates with federal contract workers regarding a Department of Labor proposed rule, released Feb. 24, which would mandate federal contractors to provide their employees with this sick leave benefit. 

Under DOL’s proposed rule, employees’ sick leave could be used for caring for themselves or family members and for absences resulting from sexual assault, domestic violence or stalking.  

To justify the rulemaking, the DOL said paid sick leave improves “the health and performance of employees of Federal contractors” and will “bring their benefits packages in line with model employers, ensuring that Federal contractors remain competitive employers.” This will lead to “improved economy and efficiency in Government procurement,” the DOL rule added.

In an accompanying fact sheet, the DOL’s Wage & Hour Division estimates the rule would extend paid sick leave to nearly 437,000 workers who currently don't receive it at all. Furthermore, the agency said that within five years, once more new contracts are reached, the rule would aid 828,000 employees, nearly 400,000 of whom already receive some paid sick leave and would become eligible for more.

On the other hand, the good news of the proposed sick leave provisions for federal contractors comes at a time when federal legislation to establish paid leave for much of the overall workforce faces bleak prospects in the Republican-controlled Congress, while state and local initiatives are gaining traction in parts of the country. 

To spread paid leave beyond the contractor workforce, the DOL has tried to facilitate state and local initiatives. Also, in DOL’s latest budget request, it asked for $2 billion in grants to help states develop family leave insurance programs.

Many cities and five states have enacted paid sick leave laws over the last ten years, including Spokane, Wash., and Vermont in February 2016. 

DOL’s proposed rule for federal contractors implements President Barack Obama's executive order, signed in September 2015, and is applicable to new or renewed contracts beginning in 2017. The proposed rule also defines terms and specifies the types of contracts and employees that are covered.

While several of the key provisions were already defined by the president in the executive order, the regulation now clarifies that the leave mandate would apply to an expansive list of contractors. “The term contract broadly includes all contracts and any subcontracts of any tier thereunder,” the WHD stated in the rule.

This includes four major categories of government contracts: construction contracts covered by the Davis-Bacon Act; service contracts under the McNamara-O'Hara Service Contract Act; concessions contracts and contracts connected to federal property.

The proposal also contains “narrow exclusions from coverage” for a few categories of contractual agreement, including federal grants, arrangements with Indian tribes and construction contracts under $2,000.

Further exempted from paid leave would be contractor employees who perform work on a federal contract, but also spend at least 80 percent of their weekly work hours on work not connected with that contract.

Following a 30-day public comment period, the WHD will have until Sept. 30, 2016, to issue a final rule, as required by the terms of the executive order. 

See related article, DOL Proposes Paid Sick Leave Mandate for Contractors.

Stay on top of the latest industry trends and news coverage with a free trial to the Benefits Practice Resource Center.