By Susan Schoenfeld, JD, Senior Legal Editor
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Get Your Report Now!On February 2016, the U.S. Department of Labor (DOL) published its notice of proposed rulemaking (NPRM) to implement Executive Order (EO) 13706, Establishing Paid Sick Leave for Federal Contractors. EO 13706 requires parties that enter into covered contracts with the federal government to provide covered employees with up to 7 days of paid sick leave annually, including paid leave allowing for family care.
The NPRM was published on February 25, 2016, in the Federal Register, with a comment period that was extended twice, to end on April 26, 2016. Publication of a final rule is expected by September 30, 2016.
According to the DOL, the rule will allow an estimated 828,200 employees to receive additional paid sick leave within 5 years of implementation. This estimate is split about evenly between employees who currently receive no paid sick leave and employees who receive some paid sick leave but would be entitled to receive additional paid sick leave as a result of the new rule.
The DOL estimates that when the new rule takes effect, a total of 681,700 additional days of paid sick leave would be available to workers in 2017.
Because the proposed rule only applies to new contracts, coverage will be phased in over multiple years. The DOL estimated that the majority of the universe of covered contracts will be covered within 5 years of implementation.
Which contractors will be affected?
EO 13706 applies to new contracts and replacements for expiring contracts with the federal government that result from solicitations issued on or after January 1, 2017, or that are awarded outside the solicitation process on or after January 1, 2017.
Coverage of contracts and employees under the proposal is nearly identical to coverage under the regulations implementing the Minimum Wage EO except that this proposal also covers employees who qualify for an exemption from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime provisions.
Under the proposal, EO 13706 applies to four major categories of contractual agreements:
- Procurement contracts for construction covered by the Davis-Bacon Act (DBA);
- Service contracts covered by the McNamara-O’Hara Service Contract Act (SCA);
- Concessions contracts, including any concessions contracts excluded from the SCA by DOL’s regulations at 29 CFR 4.133(b); and
- Contracts in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public.
Exclusions. Contracts would not be covered if they are subject only to the DBA-Related Acts, are grants, are with Indian tribes, or are subject to the Walsh-Healy Public Contracts Act (i.e., contracts for the manufacturing or furnishing of materials, supplies, articles, or equipment to the government). In addition, the requirements would apply only to those contracts or portions of contracts that are performed in the United States.
>b>Monetary thresholds. The dollar thresholds in the DBA ($2,500) and SCA ($2,000) must be satisfied before a prime contractor would be covered. For all other procurement contracts, the threshold for coverage is $3,000. Nonprocurement contracts for concessions or for subcontracts to covered contracts have no monetary threshold for coverage.
Which employees are eligible?
The NPRM states that the EO applies to any person “engaged in performing work on or in connection with” a contract covered by the EO whose wages under such contract are governed by the SCA, DBA, or FLSA, including employees who qualify for an exemption from FLSA’s minimum wage and overtime provisions.
The DOL proposes to include a narrow exemption from coverage for employees who perform work duties necessary to the performance of a covered contract but who are not directly engaged in performing the specific work called for by the contract and who spend less than 20 percent of their hours worked in a particular workweek performing work in connection with such contracts.
In Part II of this article, BLR provides details on when paid sick leave would be available, as well as more information on leave administration, accrual rules, the new definitions under the EO, and what covered contractors—with paid sick leave policies already in place—can do to comply with the new rules.
|  Susan Schoenfeld, JD, is a Senior Legal Editor for BLR’s human resources and employment law publications. Ms. Schoenfeld has practiced in the area of employment litigation and counseling, covering topics such as disability discrimination, wrongful discharge, sexual harassment, and general employment discrimination. She has litigated numerous cases before the U.S. Court of Appeals, state court, and at the U.S. Department of Labor.
In addition to litigating employment cases in state and federal court, she provided training and counseling to corporate clients regarding employment-related issues. Prior to entering private practice, Ms. Schoenfeld was an attorney with the Civil Rights Division at the U.S. Department of Labor in Washington, D.C., where she advised federal agencies, drafted regulations, conducted inspector training courses, and litigated cases for the Office of Federal Contract Compliance Programs, the Directorate of Civil Rights, and the Mine Safety and Health Administration. Ms. Schoenfeld received her undergraduate degree, cum laude, with honors, from Union College, and her law degree from the National Law Center at George Washington University. Questions? Comments? Contact Susan at sschoenfeld@blr.com for more information on this topic |