New Final Rule Requires Federal Contractors to Provide Up to 7 Paid Sick Days to Employees

By Jessica N. Childress                                                               October 25, 2016

Last month, the Department of Labor issued its Final Rule requiring federal contractors to provide paid sick leave to its employees, adopting the trend that several states and cities (including the District of Columbia) have already followed. Any employee who is “engaged in” or “performing work on or in connection with” a contract affected by the Final Rule is entitled to sick leave. The new rule will affect approximately 1.15 million employees of federal contractors.

The Final Rule requires federal contractors to provide their employees with up to 56 hours of paid sick time or seven paid sick days each year. Furthermore, under the Final Rule, federal contractors are required to allow their employees to carry over accrued but unused sick leave to the next year. The Final Rule does not require federal contractors to pay employees the monetary value of accrued but unused sick leave upon the employee’s separation of employment from the contractor.

In addition to covered contracts that will be extended, amended, or renewed on or after January 1, 2017, the final rule is also applicable to covered contracts where the solicitation has been issued, or where the covered contract has been awarded outside of the solicitation process on or after January 1, 2017.

Penalties for violating the Final Rule range from civil damages to debarment. The Final Rule goes into effect on November 29, 2016.


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