DOL Issues Final Rule on Paid Sick Leave Requirement for Federal Contractors

The DOL has issued a Final Rule establishing paid sick leave for federal contractors. The rule implements an executive order that requires contractors who work on federal contracts to provide paid sick leave to certain employees. The requirements will apply to contracts entered into or, or after, January 1, 2017.

This Final Rule includes:

  • Employees of contractors or subcontractors working on or in connection with federal contracts will accrue not less than one hour of paid sick leave for every 30 hours worked.
  • Contractors can limit sick leave accrual to 56 hours (7 days) per year, but unused leave must be carried over into the next year.
  • Contractors are not required to pay out accrued sick leave when an employee separates employment. However, if that employee is rehired by a covered contractor within 12 months of separation, the accrued sick leave must be reinstated.
  • Employees can use paid sick leave to care for their own physical or mental health, and to care for sick children, parents, spouses or partners, and for circumstances related to domestic violence, sexual assault, or stalking.
  • Areas that provide paid leave through a local vacation or other plan may meet their obligations via that plan as long as the benefit provided (leave) is at least as good as the paid leave required by the Final Rule.
  • A contractor may fulfill its obligations through a multi employer plan that provides paid sick leave in compliance with the requirements of the Final Rule. This does not allow the employer to shift responsibility to the plan.
  • Regardless of what functions the plan performs, each contractor is responsible for any violation of the Final Rule that occurs during its employment of the employee.
  • The Final Rule does not provide any exemption for contractors who are signatory to a collective bargaining agreement or for those within the construction industry.
For a complete fact sheet about the Final Rule, click here.