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Latest Executive Order Requires Paid Sick Leave by Federal Contractors

September has been a busy month for regulatory and legal changes affecting federal contractors. In addition to the Office of Federal Contract Compliance Programs (OFFCP) releasing a supplemental “EEO is the Law” poster, President Obama recently issued Executive Order 13706 requiring federal contractors to provide paid sick leave.

Signed on Labor Day, this newest Executive Order requires federal contractors to grant up to seven paid sick days per year – a development that could affect 300,000 employees. Specifically, workers can earn one hour of leave for every 30 hours worked. Sick leave can cover a broad range of situations, including physical and mental illnesses and conditions; health diagnostic and preventative care; family care; and domestic violence, sexual assault, and stalking.

Although the details are not yet finalized, a few other rules apply. Employees must request paid sick leave at least seven days in advance whenever foreseeable. Also, contractors may require certification from a health care provider for sick leave of three days or more.

Further, although employees won’t receive cash payouts for unused sick leave when they resign, this time carries over from year to year, up to seven days, for current employees.

The Final Rule for Executive Order 13706 is pending, as are the effective dates for covered contractors. It’s expected, however, that the paid sick leave requirement will apply in the fall of 2017 for most federal contractors that sign “new” contracts around October 1 of each year.

Private employers should keep a close eye on paid sick leave developments, as well. On the heels of this Executive Order for federal contractors, Obama is pushing for Congress to extend paid leave to millions more Americans under the Healthy Families Act. It would require all employers with more than 15 employees to provide at least seven sick days annually. In lieu of a federal mandate, many states and cities are passing similar sick leave laws. ​​​

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