Compliance Alert 

Executive Order:  Establishing Paid Sick Leave for Federal Contracts

Effective Date:  January 1, 2017

Update:  On September 30, 2016, the Wage and Hour division of the Department of Labor (DOL) finalized this rule. The rule is complex, so we suggest contacting your employment attorney for additional assistance.

On September 7, 2015, President Obama issued an Executive Order requiring federal contractors to provide paid sick leave for all employees.  A Notice of Proposed Rule Making should be published in the Federal Register within the next two and a half weeks.


The requirements of this regulation will apply to all covered contracts entered into on or after January 1, 2017.

Basic Provisions:

Under the new regulations, federal contractors will be required to provide all employees with paid sick leave pursuant to the following guidelines:

  • Time must accrue at a rate not less than one (1) hour per 30 hours worked.
  • Contractors cannot limit total accrual of paid sick leave per year, or at any point in time, at less than 56 hours.
  • Employees must be able to use accrued sick leave for absences resulting from illness, injury, or in order to seek care from a health care provider.
  • Employees must also be able to use time to care for “close associations,” such as blood relatives or partners who are injured, ill, or seeking care from a health care provider.
  • Accrued sick leave must be reinstated for employees rehired within 12 months of a job separation.
  • Employees cannot be required to find a replacement to cover work time they will miss.
  • Paid sick leave must be granted upon oral or written requests that include expected duration of the leave, and made at least 7 days in advance, or alternatively, as soon as is practicable.
  • Employers can only require certification for absences of three (3) or more consecutive workdays.
  • Contractors will not be required to “pay out” unused, accrued sick leave upon separation of employment.
  • Employers cannot interfere with, or in any other manner discriminate against, an employee for taking, or attempting to take, paid sick leave as provided for under this order or in any manner asserting, or assisting any other employee in asserting, any right or claim related to this order.

If you have any questions, or would like to discuss this Compliance Alert further, please feel free to contact me.

Maly Consulting, LLC – September 2015