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Federal contractor paid sick leave regulations finalized

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paid-sick-leave-regulations-oct-2016The Labor Department’s Wage & Hour Division (WHD) has released final regulations implementing mandatory paid sick leave for employees working on federal service, construction, and concessions contracts.

The costs are likely to come both from the paid sick leave itself (a maximum of seven days per year) and from the layers of complexity on top of contractors’ existing compliance obligations with respect to these types of contracts.

The regulations overlap with WHD’s responsibility for oversight of the Service Contract Labor Standards (commonly known as the Service Contract Act, or SCA), which is already a complicated compliance undertaking for employers.

Keep reading this article to see a summary of the highlights of the final regulations and flag issues for contractors to consider before the regulations take effect in January 2017: https://www.insidegovernmentcontracts.com/2016/10/paid-sick-leave-final-regulations-released/

Minimum wage for federal contractors updated; paid sick leave rule coming

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DOLThe U.S. Department of Labor (DOL) has published the minimum wage rate to be paid to workers performing on or in connection with federal contracts covered by Executive Order 13658, Establishing a Minimum Wage for Contractors.  Beginning January 1, 2017, federal contractors must pay covered workers at least $10.20 per hour. In addition, covered tipped employees performing work on or in connection with covered federal contracts must be paid a cash wage of at least $6.80 per hour.

The Executive Order was originally signed February 12, 2014, and it permits the Secretary of Labor to adjust this amount each year.   The notice and an updated Worker Rights poster are available here.

Meanwhile, the rule effectuating Executive Order 13706, which requires certain federal contractors and subcontractors to provide their workers with up to seven days of paid sick leave annually, has completed the Office of Management and Budget (OMB) review process, according to Politico.

Under the rule as proposed, employees may use paid sick days for themselves, for a sick family member, or for absences related to sexual assault, domestic abuse, or stalking.

The Executive Order requires DOL to publish a final rule implementing the Order by September 30, 2016.

Two new rules impacting federal contractors expected to be finalized by year’s end

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DOLThe U.S. Department of Labor (DOL) has signaled it intends to issue a final rule to fully implement the President’s July 31, 2014 “Fair Pay and Safe Workplaces” Executive Order by August 2016.  The Order creates disclosure and compliance requirements for contractors on federal contracts valued at $500,000 or more.  Per the proposed rules, contractors must disclose violations of labor, employment, wage payment and safety laws during the contract bidding and renewal process.  The last action taken on this regulatory matter was May 2, 2016 when revised implementing rules were sent to the Office of Management and Budget (OMB) for finalization.

DOL also plans to issue a final rule that will implement the “Establishing Paid Sick Leave for Contractors” Executive Order by September 2016. Under the rule being proposed, contractors will be required to provide up to 56 hours, or 7 days, of paid sick leave per year to their employees on federal contracts entered into after January 1, 2017.  Subcontractors also will be required to provide paid sick leave to employees performing work on a covered contract.  The comment period on this new requirement closed on April 12, 2016, so it is likely that the final steps of the regulatory process will be finalized year’s end.

The status of these two rules as well as others affecting employers may be found on the U.S. Department of Labor’s spring 2016 rule list published here.

 

Requirement for paid sick leave could penalize contractors who already offer that benefit

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DOLFollowing up on President Obama’s Labor Day release of an executive order requiring government contractors to offer paid sick leave to employees, the Labor Department issued proposed implementing regulations and invited comments by April 12.  Contractors with service contracts should consider submitting comments, especially if they already offer paid sick leave and rely on that leave to meet their fringe benefit obligations under the Service Contract Act (SCA).

Under the SCA, contractors cannot take credit for offering benefits that they are legally required to provide.  By setting a minimum required level of paid sick leave, the proposed regulations convert seven days of those benefits into legal requirements, rendering them ineligible for bona fide fringe benefit status under the SCA.  Contractors would remain free to continue to account for the value of excess paid sick leave in discharging their SCA obligations, but not the base requirements.  As a result, contractors may have to recalculate their fringe benefit packages by extracting the value of current paid sick leave benefits, and then offer some other offsetting bona fide fringe benefit or an equivalent cash payment.  In sum, the paid sick leave executive order could have the effect of penalizing contractors who were already offering the very same benefit that the government now requires.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2016/03/labor-department-invites-comments-on-regulations-governing-paid-sick-leave/

President mandates paid sick leave for federal contractors, says DOL rule on contractor pay transparency is imminent

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The latest in a string of presidential actions targeting employers that do business with the federal government is a new Executive Order (EO) that will require federal contractors to provide their employers with paid sick leave.  Signed on Labor Day 2015 and effective in 2017, the EO will permit employees working on federal contracts to earn at least one hour of paid sick leave for every 30 hours worked.

White House sealAccording to a White House fact sheet, the paid leave mandate will affect approximately 300,000 workers.

The White House also announced that the Department of Labor (DOL) will issue a final rule this week to implement Executive Order 13665, which adds pay transparency requirements to existing federal contractor obligations.  Specifically, this EO, signed into law on April 8, 2014, adds new prohibitions on discrimination based on the inquiry, discussion, or disclosure of pay.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=425662

Latest executive order will require sick leave for contractors

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In another in his stream of executive moves that don’t require congressional approval, President Obama used Labor Day and the ongoing presidential campaign to highlight his signing of an executive order requiring federal contractors to provide up to seven days sick leave for employees.

White House seal“We’ve seen that many companies, including small businesses, support these policies, because they understand it’s helpful with recruitment and retention,” Obama told a union crowd in Boston on Monday. Back in January’s State of the Union address, he had stated that, “We are the only advanced country on Earth that doesn’t guarantee paid sick leave or paid maternity leave to our workers. And that forces too many parents to make the gut-wrenching choice between a paycheck and a sick kid at home.”

The order, which would affect some 300,000 workers full- and part-time, would credit one hour of sick leave for every 30 hours worked, up to seven days annually. The time could be used to care for one’s self, a family member or domestic partner, including victims of domestic violence.

Because the order must still go through public comment, it won’t take effect until 2017 under new contracts, according to a White House fact sheet.

Keep reading this article at: http://www.govexec.com/contracting/2015/09/obamas-latest-executive-order-requires-sick-leave-contractors/120440

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