DOL Issues Final Sick Leave Rule For Federal Contractors

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  • September 30, 2016

This week, the US Department of Labor
(DOL) released its final rule requiring federal contractors to give employees at least seven days of paid sick leave per year.

The rule states that for federal contracts issued on, or after, January 1, 2017, contractors must award employees at least 1 hour of paid sick leave for every 30 hours of work, which must be allowed to accrue to at least 56 hours per calendar year. The leave will carry over annually, and employers will not be required to pay out unused leave when an employee leaves the company.

According to the DOL, the leave can be used for physical or mental illness, as well as for visits to health care providers for preventative care, to care for a family member, or to deal with the consequences of domestic violence, sexual assault or stalking — including time required to pursue legal action or to seek relocation services.

Leave cannot be made contingent on employees finding a replacement to cover their work, and employees can take up to two consecutive days of leave without requiring a doctor’s certificate or other form of certification.

The DOL also noted that the rule does not supersede any local, state or federal law — or collective bargaining agreement — that offers greater leave rights.

The DOL will have the authority to investigate violations of the rule, which include interference with employee attempts to use their leave, or discrimination for their use of leave, as well as failure to meet the rule’s requirements. Violation can result in suspension from federal contracting for up to three years, or possible debarment.

How Will The Rule Affect Government Contractors?

Federal contractors will welcome changes to the requirement that they must reinstate up to 56 hours of accumulated sick leave to an employee who is rehired within 12 months of leaving. These changes include eliminating the requirement:

  • If the balance of sick leave had been paid out at the time of separation, or;
  • For successor contractors to reinstate leave accumulated by a worker when with a predecessor contractor.

Other positive changes for employers include an adjustment to allow sick leave to accumulate in line with pay periods, rather than weekly, and a change that ensures paid sick leave is not accumulated when workers are out on other paid time off.

However, the major provisions of the rule, including its effective implementation date and the amount of sick leave that must be provided remain unchanged, resulting in what could be a significant burden to many federal contractors. That includes the direct monetary burden of providing sick leave where they may have previously provided less, or none at all. Additionally, it will pose an administrative burden to contractors who do not employ existing means for tracking such leave.

Application of the new rule will become particularly burdensome for contractor whose covered contracts comprise only part of their business. The complications become even greater still when calculating time for employees whose responsibilities spread across the whole of a company’s business.

We’re here to help. If you have questions regarding the rule as it pertains to your contract, call us at 1.800.250.2741 or email us at solutions@gsanational.com.

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