President issues executive order to require government contractors to provide paid sick leave

On Labor Day (September 7, 2015), President Barack Obama signed an executive order requiring all government contractors to provide paid sick leave.

Currently, there is no federal law that requires private-sector employers to provide paid sick leave—although some states have laws requiring paid sick leave. (Alabama is not one of these states.) Employers currently offer paid sick leave as a benefit to recruit high-quality employees. As a result of the executive order and beginning in approximately January 2017, private-sector employers who are also federal government contractors will have to provide 1 hour of paid sick leave for every 30 hours an employee works. Under the order, contractors can’t limit the number of hours to fewer than 56 a year (or 7 work days).

Over the past several years, the current administration has initiated a number of programs that affect employment practices of federal contractors.

1. Minimum wage

On January 1, 2015, government contractors were required to pay their employees a higher minimum wage than required by Federal law for non-contractors. This came about as a result of Executive Order 13658.

For more information.

2. Pay transparency

On April 8, 2014, President Obama signed Executive Order 13665, which amended section 202 of Executive Order 11246 to prohibit federal contractors from discharging or discriminating in any other way against employees or applicants who inquire about, discuss, or disclose their own compensation or the compensation of another employee or applicant. Although a proposed rule was issued on September 17, 2014, no final rule has yet appeared. As of July 16, 2015, there are news reports that indicate the OFCCP has sent its proposed final rule to the Office of Management and Budget for approval. Federal contractors need to remain alert for developments in this area.

3. No discrimination on the basis of sexual orientation or gender identity

On April 8, 2015, new rules prohibiting federal contractors and their subcontractors from discriminating on the basis of sexual orientation and gender identity went into effect. These rules were adopted pursuant to Executive Order 13672.

4. Reporting pay rates

On January 5, 2015, the extended comment period closed for a new rule to require government contractors to report pay rates. On April 8, 2014, President Barack Obama issued a memorandum to the Secretary of Labor, directing him to propose a rule that would require Federal contractors and subcontractors to submit to the summary data on the compensation paid to their employees, including data by sex and race. Because no final rule has yet been issued on this subject, federal government contractors need to remain on alert for the latest developments.

5. Fair pay and safe workplaces

The comment period for the proposed rule about fair pay and safe workplaces has been extended until August 26, 2015. On May 28, 2015, the Department of Labor (DOL) published guidance to assist federal agencies and the contracting community in implementing Executive Order13673, designed to improve contractor compliance with labor laws and increase efficiency and cost savings in Federal contracting by ensuring that federal contractors comply with labor laws.

The order requires contractors to report whether there has been any administrative determinations, civil judgments, or arbitral awards or decisions rendered against them during the preceding 3-year period for any violations of 14 identified federal labor laws, executive orders, or equivalent state laws. Contracting officers and labor compliance advisors will assess these types of reported violations (considering whether the violations are serious, repeated, willful, or pervasive) to determine whether a contractor has a satisfactory record of integrity and business ethics. The 14 federal labor laws are—

• Fair Labor Standards Act (FLSA).
• Occupational Safety and Health Act of 1970 (the OSH Act).
• Migrant and Seasonal Agricultural Worker Protection Act (MSPA).
• National Labor Relations Act (NLRA).
• Davis-Bacon Act (DBA).
• Service Contract Act (SCA).
• Section 503 of the Rehabilitation Act of 1973.
• Vietnam Era Veterans Readjustment Assistance Acts of 1972 and 1974.
• Family and Medical Leave Act (FMLA).
• Title VII of the Civil Rights Act of 1964.
• Americans with Disabilities Act of 1990 (ADA).
• Age Discrimination in Employment Act of 1967 (ADEA).

The executive orders are—

• Executive Order 11246 of September 24, 1965 (equal employment opportunity).
• Executive Order 13658 of February 12, 2014 (establishing a minimum wage for contractors).

Federal contractors need to remain on alert for developments in this area.