Paid Sick Leave

In conjunction with the Labor Day holiday, President Obama signed a new Executive Order requiring paid sick leave for employees of federal contractors and subcontractors. This executive order comes on the heels of a patchwork of state and local paid sick leave laws and failed efforts to enact any federal paid sick leave law for all employers. The Executive Order applies only to federal contractors and subcontractors—not other employers. It will take effect for covered contracts or subcontracts entered into or awarded after January 1, 2017.

This paid sick leave may be used for the employee’s own physical or mental illness, diagnosis or preventative care, care for a family member, or by victims of domestic violence, sexual assault, or stalking (including for any related counseling, relocation, or legal action). The definition of family member under the executive order includes persons in relationships equivalent of family relationships, not just blood relatives and spouses. Employees receive 1 hour of paid sick leave for every 30 hours worked (or up to 7 days or 56 hours per year). Unused sick leave will roll over from year to year and must be reinstated for any employee who quits or is separated and is rehired within 12 months of separation. Accrued paid leave is not required to be paid to employees upon termination. Leave must be requested 7 days in advance or as soon as practicable (for unpredictable leave). Employers may request certification for leaves of absence of 3 or more days, and employees have 30 days to provide the certification. No documentation is required to substantiate sick leave of less than 3 days.

Pay Transparency

The final rule on pay transparency prohibits federal contractors and subcontractors from discharging, or otherwise discriminating against, employees or applicants who inquire about, discuss, or disclose their compensation or the compensation of other employees or applicants. This prohibition is broader than the requirements of the National Labor Relations Act, enforced by the National Labor Relations Board (NLRB) because it applies to both non-management and management employees.   There is an exception for employees or applicants who make disclosure based on information learned by an employee in the course of his/her essential job functions (such as human resources, payroll, or benefits employees). This prohibition must appear in the EEO clause in federal contracts and subcontracts. A similar nondiscrimination clause must appear in employee handbooks and be disseminated to employees and applicants. Employees and applicants can make discrimination complaints with the Department of Labor if they believe they were discriminated against based on discussing, disclosing, or inquiring about pay.

This Final Rule, implementing EO 13665, takes effect on January 11, 2016 for contracts and subcontracts in excess of $10,000.

New Veterans Benchmark

OFCCP revised the veterans hiring benchmark from 7.2% to 7.0%. Federal contractors and subcontractors using the benchmark for 2015 affirmative action plans can begin using the lowered benchmark.