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Order Grants Federal Contractors 7 Sick Days a Year

On Monday, Sept. 7, 2015, President Barack Obama issued an Executive Order (the “Order”) that requires federal contractors to grant at least seven days of annual paid sick leave to their employees. The Order gives an estimated 300,000 federal contractors new access to paid sick leave.

Under the Order, employees of federal contractors will earn one hour of paid leave for every 30 hours of work when the policy enters into force with 2017 federal contracts after a public comment period. The paid sick leave can be used for absences resulting from illness, domestic violence, sexual assault, or stalking and can be used by the federal contractors themselves or for their family members. The Order is thus very similar to sick leave laws in California, Connecticut, the District of Columbia and Massachusetts that were enacted or amended in 2015. The president’s announcement was made in Boston and expressly praised Massachusetts’s new sick leave law.

The Order is the latest in a series issued by President Obama, wherein the White House has used his power over federal contracts as an attempt to encourage state and local governments and Congress to expand labor benefits for all employees in United States. In addition to the Order, the president also has signed executive orders raising the minimum wage for employees of certain federal contractors to $10.10 per hour, banning retaliation against workers that discuss compensation, and protecting transgender workers from discrimination.

President Obama also used the 2015 Labor Day holiday to push for expanded worker benefits for private sector workers. During the announcement, the president called on Congress to extend paid leave to millions of Americans by passing the Healthy Families Act, which would require all employers with more than 15 employees to grant at least seven sick days annually to their employees. President Obama’s continued public push for worker benefits reflect his efforts to prioritize workers before leaving the White House in January 2017. For example, the president’s fiscal year 2016 budget includes approximately $2 billion in funds to encourage states to establish new paid family and medical leave programs designed to allow workers to stay home to care for children or elders. Earlier this summer, the Department of Labor proposed new regulations that nearly double the limit to exempt employees from eligibility for overtime pay to $50,440 and indexed that limit to the 40th percentile of income. This increase would make overtime pay available for millions of workers currently exempt from such wages, although it is expected to be challenged in court.

Employers can expect continued changes throughout the year and beginning of next year with respect to labor and employment policies and procedures. Best practices require continued review and updating of policies.  It is best to be proactive, particularly for federal contractors, whose compliance and failure to comply with the newly issued orders may affect the employers awarding of future contracts.


^Jonathan M. Young‡