By Susan Schoenfeld, JD, Senior Legal Editor

It’s hard to keep a secret anymore, or so the White House discovered when a draft executive order marked “CONFIDENTIAL” and “Pre-decisional and Deliberative” was obtained and leaked this summer by The New York Times. The executive order (EO), which was eventually signed by President Obama on Labor Day (September 7, 2015), requires that federal contractors and their subcontractors provide paid sick leave to their employees performing work on covered contracts with the federal government.

What the EO requires

The EO requires that employees performing work on covered federal contracts and subcontracts earn one hour of paid sick leave for every 30 hours worked, accruing up to 56 hours (or 7 days) of earned paid sick leave per year.

Paid sick leave may be used by an employee for:

• A physical or mental illness, injury, or medical condition;
• Obtaining diagnosis, care, or preventive care from a health care provider;
• Caring for a child, a parent, a spouse, a domestic partner, or any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship who has any of the conditions or needs for diagnosis, care, or preventive care from a health care provider or is otherwise in need of care; or
• An absence resulting from domestic violence, sexual assault, or stalking, if the time absent from work is to seek medical attention, obtain counseling, seek relocation, seek assistance from a victim services organization, or take related legal action, including preparation for or participation in any related civil or criminal legal proceeding; or to assist an individual related to the employee in any of these activities.

Carryover and reinstatement of leave. Paid sick leave allowed under the EO will carry over from year to year and must be reinstated for employees rehired by a covered contractor within 12 months after a job separation. However, the EO states clearly that it does not require a covered contractor to make a financial payment to an employee upon a separation from employment for accrued sick leave that has not been used.

It is important to note that paid sick leave required by the EO is required in addition to a contractor's obligations under the Service Contract Act and the Davis-Bacon Act, and contractors may not receive credit toward their prevailing wage or fringe benefit obligations under those Acts for any paid sick leave provided in satisfaction of the requirements of the EO.

Existing paid sick leave policies. If a contractor has an existing paid leave policy (provided in addition to the fulfillment of Service Contract Act or Davis-Bacon Act obligations), it will satisfy the requirements of the EO if leave is made available to all covered employees, the amount of paid leave meets the requirements of the EO, and if it may be used for the same purposes and under the same conditions as are required under the EO.

Requests and certification. Employees may request paid sick leave orally or in writing. Requests for leave must be made at least 7 calendar days in advance where the need for the leave is foreseeable, and as soon as is practicable when leave is not foreseeable. When making a request for leave the employee must say how long he or she expects the leave to last.

A contractor can only require certification issued by a health care provider for paid sick leave of 3 or more consecutive work days used for the employee’s—or a covered family member’s—physical or mental illness, injury, or medical condition, diagnosis, care, or preventive care. Certification must be provided no later than 30 days from the first day of the leave.

For leave of 3 or more consecutive days due to domestic violence, sexual assault, or stalking, documentation may be required to be provided from an appropriate individual or organization. The contractor may require the minimum necessary information establishing a need for the employee to be absent from work.

The contractor may not disclose any verification information and must maintain confidentiality about the domestic violence, sexual assault, or stalking, unless the employee consents or when disclosure is required by law.

Discrimination and other prohibitions. Covered contractors may not interfere with or in any other way discriminate against an employee for taking, or attempting to take, paid sick leave for asserting, or assisting any other employee in asserting, any right or claim related to the EO.

The use of paid sick leave cannot be made contingent on the requesting employee finding a replacement to cover any work time to be missed.

Regulations and effective dates

The EO directs the Secretary of Labor to issue implementing regulations by September 30, 2016 and for the regulations to apply to covered contracts solicited, or entered into, outside the solicitation process after January 1, 2017. The EO also requires that the Federal Acquisition Regulatory Council issue regulations to provide for paid sick leave requirements in federal procurement solicitations and contracts.

Covered contracts

According to the terms of the EO, paid sick leave requirements will only be imposed on contracts and “contract-like instruments” when the solicitation for the contract has been issued, or the contract has been awarded outside the solicitation process, on or after January 1, 2107. A contract will be covered if it is:

• A procurement contract for services or construction;
• A contract or contract-like instrument for services covered by the Service Contract Act;
• A contract or contract-like instrument for concessions; or
• A contract or contract-like instrument entered into with the Federal Government in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public.

In addition, in order to be covered, employees’ wages must be governed by the Davis-Bacon Act, the Service Contract Act, or the Fair Labor Standards Act (FLSA). The EO only applies to contracts or contract-like instruments at the thresholds specified in those statutes.

Excluded from EO coverage are grants, contracts, and agreements with—and grants to—Indian Tribes under the Indian Self-Determination and Education Assistance Act or any contracts or contract-like instruments expressly excluded by regulations to be issued by the Department of Labor (DOL).