By: Claudia D. Orr
Pursuant to President Obama’s Executive Order 13707, certain federal contracts that result from a solicitation after Jan 1, 2017 or that are awarded outside of the bid process after Jan 1, 2017 (for both new and replacement contracts for those that are expiring), are going to require paid sick time for employees who are performing work related to those contracts. The Department of Labor (“DOL”), Wage and Hour Division, is going to be responsible for enforcement.
Only a federal contract that is (1) a procurement contract for construction covered by the Davis-Bacon Act, (2) a contract for services covered by the Service Contract Act, (3) a contract for concessions; or (4) a contract in connection with federal property or lands or that is related to offering services to for federal employees (or their dependents) or the general public (such as a daycare facility in a federal building) will be subject to the paid sick leave requirements. But the new regulations “do not apply to contracts for the manufacturing or furnishing of materials, supplies, articles, or equipment to the Federal Government that are subject to the Walsh-Healey Public Contracts Act.” Only contracts that are performed within the fifty states and District of Columbia will have the paid sick leave requirements.
Covered contractors (and their covered subcontractors) will be required to permit employees to accrue not less than one hour of paid sick leave for every 30 hours of work on a covered contract. Time worked that is not related to a covered federal contract does not earn sick leave. Paid sick leave must be calculated every pay period (but no longer than a month). The employer does not need to allow accruals of less than an hour, but any time worked over 30 hours (that would have resulted in a fraction of an hour of sick time) shall be added to subsequent pay periods until the employee has worked another 30 hours on a federal contract and earned another hour of sick leave. The regulations also provide methods for determining leave for exempt employees whose work hours are not tracked. Employees must be told in writing every pay period (but no longer than monthly) and at time of separation how much paid leave is accrued and unused.
Rather than calculating accruals every 30 hours, the employer can simply provide the employee with a minimum of 56 hours of paid sick time at the beginning of each year. If the employer uses this method, it may grant an employee newly hired (or newly assigned to perform work for a federal contract) a pro rata share based on the number of pay periods remaining that year.
The employer may not limit the amount of accrued unused sick leave to less than 56 hours per accrual year (which begins on the date the employee begins to perform work for a covered contract or any other twelve month period). While unused paid sick time must carry over from year to year it shall not count towards any limit that is set for annual accruals. However, if an employee carries over some unused sick leave, the employee must be permitted to continue to accrue up to the 56 hours of annual sick leave. For example, if an employee carries over 16 hours, he must be permitted to bank at least another 40 hours to bring him up to the maximum of 56 hours. However, if he uses 24 hours of sick time, he must be permitted to continue to accrue an additional 16 hours for a total annual accrual of 56 hours.
An employer must tell an employee how many hours of sick leave remained unused at time of separation. If an employee returns to work within 12 months of separation, any unused time must be accredited again to the employee. While an employer does not need to pay out unused time at separation, if it does, the employee who returns to work will not have any time credited.
Sick time must be permitted when the employee would be performing work related to the covered federal contract for any of the following reasons: (1) medical condition (physical or mental illness or injury) of the employee, or for diagnosis, care or preventive care, (2) to care for the employee’s child, parent, spouse, domestic partner or person who is related by blood or affinity of the equivalent family relationship who has a medical condition or needs diagnosis, care or preventive care, or (3) because of domestic violence, sexual assault or stalking (including for counseling, relocation, legal action, etc.).
Leave must be accounted for in increments of no more than an hour and the employee cannot be forced to take more time than necessary. If the length of leave needs to be changed, the employer must permit the employee to return early or take more time. The employee is entitled to receive the same regular pay the employee would have earned if he/she had not been absent and must be returned to the same position (or an equivalent position if unable to do the same job due to physical impossibilities).
The employer cannot limit how much sick time the employee can take per year or at once, except based on the amount of accrued time available. While the employee is encouraged to make reasonable effort to schedule foreseeable leave at a time that does not unduly disrupt operations, the employer cannot make the use of leave contingent upon finding a replacement worker or the fulfillment of operational needs.
Employees are only required to provide sufficient information (verbally or written) to inform the employer that time off is needed for one of the reasons above and, to the extent feasible, the expected duration of that leave. The employer cannot require extensive or detailed information about the reason for the absence or the family relationship.
However, supporting documentation may be required by the employer if the paid leave will last 3 consecutive days or longer and the employee was notified of the requirement before returning to work. For sick leave related to a medical condition, almost any note from a health care provider will suffice. Documentation for paid leave related to domestic violence, sexual assault or stalking can be provided by just about anyone if they are providing care or assistance to the employee or family member (such as a physician, counselor, representative of victim services, clergy, attorney, family member, friend, or even self-certification).
The employer (through human resources, a leave administrator or management official, but not through the direct supervisor unless no one else appropriate exists) may contact the individual who provided the certification to determine authenticity or for clarifying its contents, but may not seek additional information or a second opinion. The employee must have at least 30 days after the first day of the 3+ consecutive days’ leave of absence to provide the certification.
While waiting for the certification, the leave must be treated as though granted and the employee paid for the time off. If it is later determined that the leave should be denied, the employer may recoup the value of pay and benefits that had been granted through payroll deductions, vacation pay, profit sharing etc. (as long as other wage and benefit laws are not violated).
An employee should make their leave request seven days in advance when it is foreseeable, or as soon as practicable when the need for leave becomes known. The confidentiality of medical information (and information related to domestic violence, sexual assault or stalking) must be maintained. While leave may be granted verbally or in writing, an employer must deny leave in writing and provide an explanation. The employer’s response should be provided as soon as practicable.
Leave may be denied if it is not requested for a permissible reason as explained above, insufficient information is provided (such as when the leave will be needed), the employee has not accrued sufficient leave time for the request, or the leave would occur when the employee is not scheduled to perform work under the covered federal contract. If insufficient information was provided, the employee must be permitted an opportunity to submit additional/corrected information. If, during the period of the proposed leave, the employee would be performing work that is not under a covered federal contract, there must be adequate records to support this position for denial.
Paid sick leave may run consecutively with FMLA, just like any other paid time off. An employer’s existing paid time off policy will satisfy the new requirements if: (1) it is available to all employees who would be eligible under the new regulations, (2) is granted in a manner and amount that satisfies these requirements (including maximum accrual, carryover, reinstatement rights, etc.), (3) is no more restrictive concerning requests for leave, certifications and documentation, and (4) the employee is protected from interference, discrimination or retaliation and rights can’t be waived.
The employer may maintain one system/bank of time off that complies with all of these requirements or maintain a separate system for the 56 hours under these regulations. And, as always, the employer is required to maintain detailed records. There are lots and lots of other requirements in the new regulations, so make sure you consult with an experienced employment attorney, such as the author, if you are a federal contractor who may be subject to these new regulations. Also, additional information can found on the DOL’s website at https://www.dol.gov/whd/govcontracts/eo13706/faq.htm.
This article was written by Claudia D. Orr, who is Chair of the Legal Affairs Committee of Detroit SHRM, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM). She can be reached at firstname.lastname@example.org or at (313) 983-4863. For more information go to: http://www.plunkettcooney.com/people-105.html.
Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. October 2016.