“On September 29, 2016, the Department of Labor (“DOL”) issued regulations (the “final rule”) implementing Executive Order 13706, which requires federal contractors to provide paid sick leave to their employees. According to the DOL, federal contractors employ 1.15 million individuals—594,000 of whom do not receive paid sick leave. Thus, for contractors who do not currently provide paid sick leave to their employees, the final rule imposes significant administrative and financial burdens. However, given the nuanced requirements of the final rule, even contractors who currently provide some form of paid sick leave to employees may find the final rule burdensome to comply with. Contractors should act now to either develop paid sick leave policies or determine what changes need to be made to their current paid leave policies to ensure that they are in compliance with the final rule once it becomes effective.
Contracts and Contractors Covered By the Final Rule
Contractors are required to provide paid sick leave to employees who work on or in connection with a “new contract” with the federal government that is performed, in whole or in part, within the United States, if the contract is: (1) a procurement contract for construction covered by the Davis-Bacon Act (“DBA”); (2) a services contract covered by the Service Contract Act (“SCA”); (3) a concessions contract, including those excluded from SCA-coverage; or (4) a contract in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public. (Supply contracts, including those subject to the Walsh-Healey Public Contracts Act, are not covered by the final rule.) A “new contract” is one that results from a solicitation issued on or after January 1, 2017, or a contract that is awarded outside the solicitation process on or after January 1, 2017. Under certain circumstances, contracts entered into prior to January 1, 2017, may be considered new contracts if they are renewed, extended, or amended on or after January 1, 2017.
The final rule also applies to subcontracts, regardless of their tier and regardless of their value (that is, the final rule applies to a subcontract even if the subcontract does not meet the monetary threshold for SCA or DBA coverage or, for contracts governed by the Fair Labor Standards Act (“FLSA”), the micro-purchase threshold).”
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Garen Dodge is a partner in the Labor and Employment Practice Group in Sheppard Mullin’s Washington D.C. office. Mr. Dodge’s diverse practice covers the spectrum of labor and employment litigation.
Ryan Munitz is an associate in the Labor and Employment Group in Sheppard Mullin’s Washington, D.C. office. Ms. Munitz's practice focuses on labor and employment counseling, particularly regarding compliance with the National Labor Relations Act.
Lindsay Holloman is an associate in the Labor and Employment Practice Group in Sheppard Mullin’s Los Angeles office. Ms. Holloman's practice involves representing employers in all aspects of labor and employment counseling and disputes under federal and state law.
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Garen Dodge
SheppardMullin
Garen Dodge is a partner in the Labor and Employment Practice Group in Sheppard, Mullin, Richter & Hampton's Washington D.C. office. Mr. Dodge’s diverse practice covers the spectrum of labor and employment litigation. His recent victories include serving as lead counsel in a jury trial alleging defamation in Fairfax, Virginia Circuit Court, obtaining an injunction in DC federal court in a non-compete case, and prevailing in a five day arbitration involving allegations of age and national origin discrimination. Throughout his career, he has served as counsel of record in seminal U.S. Supreme Court and appellate cases as Amicus Curiae. Mr. Dodge advises clients on issues involving privacy, discrimination, background checks, harassment, wage and hour, and occupational safety and health. He assists companies in establishing workplace programs, and trains supervisors and employees on effective personnel policies. He represents clients before Congress and key federal agencies on labor and employment issues, and has testified before agencies such as the U.S. Commission on Civil Rights.
Ryan J. Munitz
SheppardMullin
Ryan Munitz is an associate in the Labor and Employment Group in Sheppard, Mullin, Richter & Hampton LLP’s Washington, D.C. office. Ms. Munitz's practice focuses on labor and employment counseling, particularly regarding compliance with the National Labor Relations Act. She specializes in the Railway Labor Act and has extensive experience advising employers during union organizing campaigns regarding compliance with the RLA. Ms. Munitz has experience representing companies in labor arbitrations and labor negotiations, and handling other traditional labor matters. She also assists clients with drafting employment, severance, confidentiality, non-competition, and non-solicitation agreements, as well as other employment policies, in compliance with state and federal law.
Lindsay Holloman
SheppardMullin
Lindsay Holloman is an associate in the Labor and Employment Practice Group in Sheppard, Mullin, Richter & Hampton LLP's Los Angeles office. Ms. Holloman's practice involves representing employers in all aspects of labor and employment counseling and disputes under federal and state law, including discrimination on the basis of race, sex, age, religion, disability, gender identity and sexual orientation; harassment; retaliation; wage and hour; wrongful termination; employment contracts; ADA cases; trade secret misappropriation; and contract disputes. She provides advice on human resources and personnel issues.
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