On Labor Day this week, President Obama signed an Executive Order that will require paid sick leave for employees of federal contractors and subcontractors. The order will impact an estimated 300,000 employees who currently do not have these benefits, offering them up to seven days of paid sick leave. The Executive Order, signed on Monday, September 7, 2015, is not being fast-tracked; the U.S. Secretary of Labor will issue the final regulations by September 30, 2016. New rules will go into effect on January 1, 2017.
Under Executive Order 13706:
- Paid sick leave requirements will only impact new federal contracts signed after January 1, 2017
- Employees of federal contractors and subcontractors will be able to earn a minimum of one hour of paid leave for every 30 hours they work (up to 56 hours per year)
- Employees will be allowed to use the leave to care for sick family members
- Unused paid sick leave carried over annually
- Employees rehired by a covered contractor within 12 months of job separation will have any unused sick leave reinstated
- These requirements do not replace other local, federal, or state laws or collective bargaining agreements that provide superior benefits
Officials have not provided an estimate in terms of the financial impact the new requirements will have on contractors; however, they have explained that savings will offset costs through lower attrition rates and increased employee loyalty and productivity. It is essential to keep informed about new requirements related to your obligations as a federal contractor/subcontractor.
Career Resources, Inc. will be monitoring the progress of this Executive Order closely as well as other new requirements that can affect the contractor community and will provide you with the latest information as it becomes available.
If you have any questions concerning your obligations as a federal contractor, contact Career Resources, Inc.