HR Compliance

Obama’s Executive Order Guarantees Paid Sick Leave to Federal Contractors

By

Robert Barclay

| Sep 11, 2015

While many around the country enjoyed a fun-filled, three-day weekend, not everyone had Labor Day off. On the day we celebrated America’s 120 million-plus workers, President Barack Obama signed an executive order making paid sick leave mandatory for employees of federal contractors.

Providing access to paid sick leave “will improve the health and performance of employees of federal contractors and bring benefits packages of federal contractors in line with model employers, ensuring they remain competitive in the search for dedicated and talented employees,” said Obama.

Obama is requiring that federal contractors’ employees receive up to seven days or more of paid sick leave annually, including paid leave for family care.

As of today, nearly 61 percent of private-sector employees receive paid sick leave and by 2017, when the executive order takes effect, an estimated 300,000 employees will be added.

This order is in addition to the pending overtime pay requirements of the FLSA.

Outlining the Rules          

Federal contractors now must follow a number of important rules:

  • Organizations must ensure that their policies and procedures include a clause in which all contract or subcontract labor earns no less than one hour of paid sick leave for every 30 hours worked.
  • There is no limit for paid sick leave accrual, which may be carried over year to year. However, if an employee separates from the company, an employer is not liable to pay out any accrued sick leave.
  • Employees must give a seven-day notice, oral or written in advance of any time away from the job, or as soon as is practicable. If an employee misses three or more days of work, a doctor’s note must be provided and be deemed as sufficient proof.
  • The use of sick leave should not be contingent upon the employee finding a replacement for his or her time away.
  • Cities and states with more generous paid leave laws will adhere to those existing laws, not the newly signed federal law.

Categories in Which Sick Time Is Included

Employees may use paid sick leave for any of the following reasons:

  • physical or mental illness, injury or medical condition;
  • obtaining diagnosis, care or preventative care from a health care provider;
  • caring for a child, parent, spouse, partner or any other individual related by blood or affinity who has any condition or needs described above; or
  • domestic violence, sexual assault or stalking, if the absence from work is for the purpose otherwise described above, to obtain additional counseling, to seek relocation, to seek assistance from victim services, to take related legal action, including preparation for or participation in any related civil or criminal legal proceeding.

Although it has been said that this executive order will not take effect until 2017, it is important that organizations be proactive in reviewing policies and procedures in order to ensure compliance.

About the Author

Robert Barclay

Robert Barclay has been the Tax Research Team Lead at Paycom since 2012, and has been instrumental in such company projects as the development of its Affordable Care Act compliance product, implementation of geolocation services and redesign of Form W-2. He joined Paycom in 2011, bringing more than 20 years of experience with the capital markets consulting practices of Ernst & Young in Memphis, Tenn., and Birmingham, Ala.; and Causey Demgen & Moore in Denver, Colo. A native Oklahoman, Barclay is a graduate of Rhodes College in Memphis, where he played football as linebacker.

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