Questions and Answers

GENERAL

CONTRACT COVERAGE

What contracts are covered by EO 13706 and the Final Rule?
What is a "concessions contract"?
What is a contract or contract-like instrument entered into with the Federal Government in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public?
Are any contracts with the Federal government excluded from the requirements of the Final Rule?
Does a contract have to meet a dollar amount threshold before the EO applies?
What is a "new contract"?
If my company enters into a contract with the Federal Government, is it automatically covered by the Final Rule?
Does the Final Rule apply to subcontracts?
Is work performed in a United States territory, such as Guam, the Commonwealth of the Northern Mariana Islands, or Puerto Rico, covered by the Executive Order?
Are contracts entered into by the District of Columbia Government covered by the Executive Order?

EMPLOYEE COVERAGE

ACCRUAL OF PAID SICK LEAVE

USE OF PAID SICK LEAVE

INTERACTION WITH OTHER LAWS AND PAID TIME OFF

PROTECTIONS FOR EMPLOYEES

Are there prohibitions against retaliation or discrimination included in the Final Rule?

OBLIGATIONS OF CONTRACTING AGENCIES, DOL, AND CONTRACTORS

ENFORCEMENT

How will the EO and regulations be enforced?

IMPACTS

How many employees will receive additional paid sick leave under the Final Rule?

GENERAL

1. Q. What is the purpose of this Final Rule?

On September 7, 2015, President Barack Obama signed Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors (EO). The EO requires certain parties that contract with the Federal Government to provide their employees with up to seven days of paid sick leave annually, including paid leave allowing for family care. The Final Rule fulfills the requirement in the EO that the Secretary of Labor issue regulations by September 30, 2016, to implement the EO's requirements.

2. Q. Where can I find the Final Rule?

The Final Rule is available through the Federal Register and the http://www.regulations.gov website. The RIN for the Final Rule is 1235-AA13. The docket ID number for the Final Rule is WHD-2016-0001.

You can also access this document via the Wage and Hour Division's (WHD) website at http://www.dol.gov/agencies/whd .

CONTRACT COVERAGE

1. Q. What contracts are covered by EO 13706 and the Final Rule?

The requirements of the EO apply only to certain categories of contracts with the Federal Government, and only to contracts that are "new" on or after January 1, 2017. The categories of covered contracts are identical to those covered by the Final Rule implementing EO 13658, Establishing a Minimum Wage for Contractors (Minimum Wage EO).

Under the EO and Final Rule, the paid sick leave requirements apply to a new contract that is: (1) a procurement contract for construction covered by the Davis-Bacon Act (DBA); (2) a contract for services covered by the Service Contract Act (SCA); (3) a contract for concessions, including any concessions contract excluded from coverage under the SCA by Department of Labor regulations at 29 CFR 4.133(b); 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. The regulations do not apply to contracts for the manufacturing or furnishing of materials, supplies, articles, or equipment to the Federal Government that are subject to the Walsh-Healey Public Contracts Act.

The Final Rule only applies to contracts, or portions of contracts, with the Federal Government performed within the United States (defined as the 50 States and the District of Columbia).

2. Q. What is a "concessions contract"?

The Final Rule defines a "concessions contract" as a contract under which the Federal Government grants a right to use Federal property, including land or facilities, for furnishing services. The term "concessions contract" includes but is not limited to contracts with the principal purpose of furnishing food, lodging, automobile fuel, souvenirs, newspaper stands, and/or recreational equipment, regardless of whether the services are of direct benefit to the Government, its personnel, or the general public.

Examples of concessions contracts that are generally covered by the Final Rule include contracts with the Federal Government to operate souvenir shops in national parks or fast food restaurants in Federal buildings.

3. Q. What is a contract or contract-like instrument entered into with the Federal Government in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public?

This category of covered contracts refers to leases of Federal property, including space and facilities, and licenses to use such property entered into by the Federal Government for the purpose of offering services to Federal employees, their dependents, or the general public.

Examples of such agreements (which could also be subject to the SCA and/or be covered concessions contracts) include delegated leases of space in a Federal building from an agency to a contractor whereby the contractor operates a child care center, credit union, gift shop, barber shop, coffee shop, or fitness center in the Federal building to serve Federal employees and/or the general public.

4. Q. Are any contracts with the Federal government excluded from the requirements of the Final Rule?

Under the Final Rule, the EO and the regulations do not apply to grants as that term is used in the Federal Grant and Cooperative Agreement Act. They also do not apply to contracts and agreements with and grants to Indian Tribes under the Indian Self-Determination and Education Assistance Act (Public Law 93–638), as amended. In addition, they do not apply to contracts that are subject only to the Davis-Bacon Related Acts. The Final Rule will also not apply to contracts for the manufacturing or furnishing of materials, supplies, articles, or equipment to the Federal Government that are subject to the Walsh-Healey Public Contracts Act.

5. Q. Does a contract have to meet a dollar amount threshold before the EO applies?

For contracts covered by the SCA or the DBA, the Final Rule applies to prime contracts only at the thresholds specified in those statutes ($2,500 and $2,000, respectively), and for procurement contracts where employees' wages are governed by the FLSA (i.e., procurement contracts not covered by the SCA or DBA), the Final Rule applies when the prime contract exceeds the micro-purchase threshold ($3,500). There is no value threshold for application of the Final Rule to subcontracts awarded under covered prime contracts or for non-procurement concessions contracts not covered by the SCA and non-procurement contracts with the Federal Government in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public not covered by the SCA.

6. Q. What is a "new contract"?

The Final Rule applies to "new contracts," that is, contracts with the Federal Government that result from solicitations issued on or after January 1, 2017 or that are awarded outside the solicitation process on or after January 1, 2017. A contract that is entered into prior to January 1, 2017 will constitute a new contract if, through bilateral negotiation, on or after January 1, 2017: (1) the contract is renewed; (2) the contract is extended, unless the extension is made pursuant to a term in the contract as of December 31, 2016 providing for a short-term limited extension; or (3) the contract is amended pursuant to a modification that is outside the scope of the contract. The definition of "new contract" does not include the unilateral exercise of a pre-negotiated option to renew an existing contract by the Federal Government.

7. Q. If my company enters into a contract with the Federal Government, is it automatically covered by the Final Rule?

No. In order for a contractual agreement to be covered, the agreement would need to: (1) fall within the definition of a "contract or contract-like instrument" as set forth in the Final Rule, and (2) qualify as one of the specifically enumerated types of contracts described in the EO (a contract subject to the DBA or SCA, a concessions contract, or a contract entered into in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public). Moreover, as explained above, paid sick leave requirements would apply only to "new contracts" with the Federal Government.

8. Q. Does the Final Rule apply to subcontracts?

Yes, under the Final Rule, the EO's paid sick leave requirements apply to subcontracts of covered prime or upper-tier contracts if the subcontract is one of the four types of covered contracts: (1) a contract for construction covered by the DBA; (2) a contract for services covered by the SCA; (3) a contract for concessions, including any concessions contract excluded from coverage under the SCA by Department of Labor regulations at 29 CFR 4.133(b); 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. The requirements apply regardless of the value of the subcontract. Contractor obligations for ensuring compliance by subcontractors are consistent with obligations under DBA, SCA and the Final Rule implementing the Minimum Wage EO.

9. Q. Is work performed in a United States territory, such as Guam, the Commonwealth of the Northern Mariana Islands, or Puerto Rico, covered by the Executive Order?

No. 29 CFR 13.3(c) explains that the EO only applies to contracts with the Federal Government requiring performance in whole or in part within the United States, which is defined in 29 CFR 13.2 to mean exclusively the 50 States and the District of Columbia. If a covered contract is to be performed in part within and in part outside the United States, the Executive Order would apply only to that part of the contract performed within the United States (again, defined as the 50 states and the District of Columbia).

10. Q. Are contracts entered into by the District of Columbia Government covered by the Executive Order?

No. The EO only applies to contracts entered into by the Federal Government, not contracts entered into by the District of Columbia Government.

EMPLOYEE COVERAGE

1. Q. Which employees are covered by the EO and the Final Rule?

The paid sick leave requirements of EO 13706 and the Final Rule apply to employees performing work "on or in connection with" covered contracts and whose wages under those covered contracts are governed by the DBA, SCA, or FLSA, including employees who qualify for an exemption from the FLSA's minimum wage and overtime provisions.

2. Q. What does it mean to work "on or in connection with" covered contracts?

The Final Rule explains that employees performing "on" a covered contract are those employees directly performing the specific services called for by the contract (including, but not limited to, laborers and mechanics engaged in the construction of a public building or public work on the site of the work and service employees performing the specific services called for by an SCA-covered contract).

Employees performing "in connection with" a covered contract are those who are performing work activities that are necessary to the performance of a covered contract but who are not directly engaged in performing the specific services called for by the contract itself (such as, for example, a security guard patrolling or monitoring a construction worksite where DBA-covered work is being performed or a clerk who processes the payroll for SCA contracts).

These interpretations are the same as under the Final Rule implementing the Minimum Wage EO.

3. Q. What does it mean for an employee's wages to be governed by the DBA?

The Final Rule explains that employees whose wages are governed by the DBA include laborers and mechanics who are covered by the DBA, including any individual who is employed on a DBA-covered contract and individually registered in a bona fide apprenticeship program registered with the Department's Employment and Training Administration, Office of Apprenticeship, or with a State Apprenticeship Agency recognized by the Office of Apprenticeship.

4. Q. What does it mean for an employee's wages to be governed by the SCA?

The Final Rule explains that employees whose wages are governed by the SCA include those who are "service employees" under the SCA, including individuals who are employed on an SCA contract and individually registered in a bona fide apprenticeship program registered with the Department's Employment and Training Administration, Office of Apprenticeship, or with a State Apprenticeship Agency recognized by the Office of Apprenticeship.

5. Q. What does it mean for an employee's wages to be governed by the FLSA?

The Final Rule explains that employees whose wages are governed by the FLSA include those entitled to minimum wage and/or overtime compensation under sections 6 and/or 7 of the FLSA and those whose wages are calculated pursuant to special certificates issued under section 14 of the FLSA. The EO and Final Rule also apply to an employee who would be entitled to minimum wage and/or overtime compensation under the FLSA but for the application of an exemption from the FLSA's minimum wage and overtime requirements pursuant to section 13 of the Act. Such employees include those employed in a bona fide executive, administrative, or professional capacity as provided in section 13(a)(1) of the FLSA.

6. Q. Are any employees who work on or in connection with covered contracts excluded from the requirements of the Final Rule?

The accrual requirements of the Final Rule do not apply to employees performing "in connection with" covered contracts (rather than "on" covered contracts) who spend less than 20 percent of their hours worked in a particular workweek performing in connection with such contracts. An employee works "in connection with" a covered contract if she performs work duties necessary to the performance of the contract but is not directly engaged in performing the specific work called for by the contract (such as, for example, a security guard patrolling or monitoring a construction worksite where DBA-covered work is being performed or a clerk who processes the payroll for SCA contracts).

7. Q. What if a CBA that already provides paid sick leave applies to an employee's work performed on or in connection with a covered contract?

If a CBA ratified before September 30, 2016 applies to an employee's work performed on or in connection with a covered contract, and the CBA provides the employee with at least 56 hours (or 7 days, if the CBA refers to days rather than hours) of paid sick time (or paid time off that may be used for reasons related to sickness or health care) each year, the requirements of the EO and the Final Rule do not apply to the employee until the date the agreement terminates or January 1, 2020, whichever is first. If such a CBA provides the employee with paid sick time (or paid time off that may be used for reasons related to sickness or health care) each year, but the amount provided under the CBA is less than 56 hours (or 7 days), the contractor must provide covered employees with the difference between 56 hours (or 7 days) and the amount provided under the existing CBA in a manner consistent with either the EO and the Final Rule or the terms and conditions of the CBA.

ACCRUAL OF PAID SICK LEAVE

1. Q. What is the amount of paid sick leave required under EO 13706?

Under the EO, a contractor must permit an employee to accrue (earn) not less than 1 hour of paid sick leave for every 30 hours worked on or in connection with a covered contract, up to the limits described below.

2. Q. Does an employee accrue paid sick leave based on all time spent working for a Federal contractor?

Under the Final Rule, a contractor is only required to allow employees to accrue paid sick leave for hours worked on or in connection with the four types of covered contracts described above. For example, if an employee works on an SCA-covered contract for security services for 30 hours each workweek and works for the same contractor on a contract not covered by the Final Rule for an additional 30 hours each workweek, the contractor would only be required to allow the employee to accrue 1, rather than 2, hours of paid sick leave each workweek.

3. Q. What does "hours worked" mean for EO 13706?

The Final Rule provides that "hours worked" for purposes of this EO will have the same meaning as it does under the Fair Labor Standards Act, as described in 29 CFR part 785, meaning time an employee spends working but not time when an employee is in paid time off status. Any contractor that prefers to calculate its employees' paid sick leave accrual based on hours worked and hours spent in paid time off status is permitted, though not required, to do so.

4. Q. What if a contractor does not already keep a record of hours worked for certain employees?

For employees as to whom contractors are not obligated by another statute (such as the Davis-Bacon Act, Service Contract Act, or Fair Labor Standards Act) to keep records of hours worked, such as white collar workers who are employed in a bona fide executive, administrative, or professional capacity, the Final Rule allows contractors to choose between tracking hours or continuing not to keep records of such employees' hours worked and instead allowing employees to accrue leave based on the presumption that the employees were working on or in connection with a covered contract for 40 hours per week.

5. Q. What if it is difficult for a contractor to track how many hours employees working in connection with covered contracts spend on such work?

Under the Final Rule, contractors are permitted to use an estimate of time their employees work in connection with (but not on) a covered contract as long as the estimate is reasonable and based on verifiable information. Such information could include the portion of a contractor's total revenue that derives from covered contracts if it is reasonable to assume that an employee's work time is roughly evenly divided across all of the contractor's work, although other bases for the estimate could also be appropriate.

6. Q. Could a contractor provide employees with the 56 hours all at once, or does a contractor have to track accrual over time?

In order to facilitate ease of compliance under the Final Rule, a contractor may choose to provide an employee with at least 56 hours of paid sick leave at the beginning of each accrual year ("frontloading") rather than allowing the employee to accrue such leave based on hours worked over time. (Or, if an employee begins work on or in connection with a covered contract after the beginning of the accrual year, the contractor may provide the employee with a prorated amount of paid sick leave based on the number of pay periods remaining in the accrual year.) Certain rules regarding limits on the accrual of paid sick leave are different if a contractor chooses to use this option. A contractor may use the frontloading option for any or all of its employees in any or all accrual years. This is not intended to permit a contractor to change its accrual systems during an accrual year, but rather, at the beginning of a new accrual year. As with all actions a contractor takes with respect to paid sick leave, a contractor may not use the decision of whether to elect this option to avoid its obligations under the EO

7. Q. Are there any limits to the amount of paid sick leave that can be accrued?

Under the Final Rule, a contractor may limit an employee's paid sick leave accrual each year to 56 hours. A contractor may also prohibit an employee from having more than 56 hours of paid sick leave available for use at any point in time, except under certain circumstances where a covered contractor "frontloads" benefits as described above. In that circumstance, a contractor's obligation to allow employees to carry-over unused leave coupled with "frontloaded" leave can result in an employee having more than 56 hours of paid sick leave available for use at one time, but will not require an employee to receive more than 56 additional hours in any one year.

8. Q. What is an accrual year?

The accrual year is the 12-month period in which an employee can be limited to accruing 56 hours of paid sick leave. The 12-month period can begin on the date an employee's work on or in connection with a covered contract began or any other fixed date chosen by the contractor, such as the date a covered contract began, the date the contractor's fiscal year begins, a date relevant under State law, or the date a contractor uses for determining employees' leave entitlements under the FMLA. Under the Final Rule, a contractor may choose its accrual year but must use a consistent option for all similarly situated employees and may not select or change its accrual year in order to avoid the paid sick leave requirements of EO 13706.

9. Q. How often does paid sick leave accrue?

Under the Final Rule, a contractor shall calculate an employee's accrual of paid sick leave no less frequently than at the conclusion of each pay period or each month, whichever interval is shorter.

A contractor is not required to allow employees to accrue paid sick leave in increments smaller than 1 hour for completion of any fraction of 30 hours worked. In other words, an employee need only be permitted to accrue a full hour of paid sick leave after working a full 30 hours. For example, if an employee worked 40 hours during her first pay period on a covered contract, the first 30 of those hours would count toward the accrual of 1 hour of paid sick leave, and the 10 remaining hours would be added to hours worked for the same contractor in a future pay period to reach the next 30 hours worked.

10. Q. How are the employees informed about the amount of accrued paid sick leave?

The Final Rule requires a contractor to inform an employee, in writing, of the amount of paid sick leave that the employee has accrued but not used no less than once each pay period or each month, whichever interval is shorter, as well as upon a separation from employment and upon reinstatement of paid sick leave.

A contractor's existing procedure for informing employees of their available paid time off, such as notification accompanying each paycheck or an online system an employee can check at any time, can be used to satisfy or partially satisfy these requirements provided it is written (including electronically) and clearly indicates the amount of paid sick leave an employee has accrued separately from indicating amounts of other types of paid time off available.

11. Q. Does paid sick leave carry over from year to year?

Yes. The Final Rule requires a contractor to allow carryover of paid sick leave an employee has accrued but not used from one accrual year to the next.

12. Q. If an employee carries over paid sick leave from the previous accrual year, is that employee's additional accrual in the new year limited to less than 56 hours?

It depends on how much leave the employee carries over and uses. Under the Final Rule, leave carried over from the previous accrual year does not count toward the 56-hour accrual limit in the next accrual year, but contractors may limit employees' amount of paid sick leave at any point in time to 56 hours. Thus accrual in the new year could be limited to less than 56 hours if necessary to keep an employee's balance to not more than 56 hours at any point.

For example, if an employee carries over 16 hours of paid sick leave into a new accrual year, she must be permitted to accrue 40 additional hours of paid sick leave even if she does not use any paid sick leave while that accrual occurs. Once she has 56 hours of paid sick leave accrued, the contractor may prohibit her from accruing any additional leave—unless she uses some portion of the 56 hours. If she uses, for example, 24 hours of paid sick leave in the same accrual year (so she has 32 hours remaining available for use), she must be permitted to accrue up to at least 16 more hours (in addition to the 40 hours she has already accrued during the accrual year) for a total of 56 hours accrued in that accrual year.

Under the frontloading option a contractor can use instead of permitting accrual over time as described, an employee would always receive 56 new hours at the beginning of a new accrual year.

13. Q. Is a contractor required to pay employees for accrued, unused paid sick leave when an employee's job ends or at the end of the contract?

No. Nothing in the EO or the Final Rule requires a contractor to make a financial payment to an employee for accrued paid sick leave that has not been used upon a separation from employment. The Final Rule provides, however, that a contractor is relieved of its obligation to reinstate paid sick leave when it rehires an employee under certain circumstances described below if it nevertheless cashed out unused paid sick leave at the time of the original separation from employment.

14. Q. What happens to the paid sick leave accrual if an employee's employment terminates, but the employee is later rehired?

Under the Final Rule, paid sick leave must be reinstated for employees rehired by the same contractor within 12 months after a job separation unless the employee received payment for accrued, unused paid sick leave upon separation.

This reinstatement requirement applies whether the employee leaves and returns to a job on or in connection with a single covered contract or works for a single contractor on or in connection with more than one covered contract, regardless of whether the employee remains employed by the contractor to work on non-covered contracts in between periods of working on covered contracts.

USE OF PAID SICK LEAVE

1. Q. What are permissible uses for paid sick leave?

Under the Final Rule, employees may use paid sick leave for time they would otherwise be working on or in connection with covered contracts if they are absent because of:

(1) A physical or mental illness, injury, or medical condition.

(2) Obtaining diagnosis, care, or preventive care from a health care provider.

(3) Caring for a child, parent, spouse, domestic partner, or any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship who has any of the conditions or needs for diagnosis, care, or preventive care described in (1) or (2) or is otherwise in need of care.

(4) Domestic violence, sexual assault, or stalking, if the time absent from work is for the purposes described in (1) or (2) or to obtain additional counseling, seek relocation, seek assistance from a victim services organization, take related legal action, including preparation for or participation in any related civil or criminal legal proceeding, or assist an individual related to the employee as described in (3) in engaging in any of these activities.

2. Q. What counts as a physical or mental illness, injury, or medical condition?

For the purpose of the EO and the Final Rule, a physical or mental illness, injury, or medical condition is defined as any disease, sickness, disorder, or impairment of, or any trauma to, the body or mind. The Department understands the EO to intend for this term to be understood broadly, to include any illness, injury, or medical condition, regardless of whether it requires attention from a health care provider or whether it would be a "serious health condition" that qualifies for use of leave under the Family and Medical Leave Act. Examples include, but are not limited to, a common cold, ear infection, upset stomach, ulcer, flu, headache, migraine, sprained ankle, broken arm, or depressive episode.

3. Q. How is the Department defining domestic violence, sexual assault, or stalking?

The final definitions of these terms are based on the definitions that appear in the Violence Against Women Act, one of the statutes to which the EO directs the Department to look. The definition of domestic violence makes clear that domestic violence includes actions considered to be domestic violence under civil laws.

4. Q. What information about domestic violence, sexual assault, or stalking would an employee be required to provide about the reason the employee needs to take paid sick leave?

In requesting leave, employees are not required to provide detail about the circumstances surrounding the need for leave, but they must provide sufficient information to enable contractors to assess whether a request to use paid sick leave is valid. Regarding a domestic violence matter, a contractor could not ask for any detail regarding the circumstances of the domestic violence, and under the EO and Final Rule, the contractor must maintain confidentiality about the domestic abuse, sexual assault, or stalking, unless the employee consents or when disclosure is required by law.

When an employee takes three or more consecutive days of paid sick leave, an employer may request documentation verifying the need for leave. The Final Rule adds additional examples describing the breadth of possible sources of documentation that may verify this type of leave, adding clergy, family, friends, or self-certification as examples.

5. Q. Who is a heath care provider for the purpose of the EO?

Under the EO and the Final Rule, "health care provider" is defined as any practitioner who is licensed or certified under Federal or State law to provide the health-related service in question or any practitioner recognized by an employer or the employer's group health plan. The term includes, but is not limited to, doctors of medicine or osteopathy, podiatrists, dentists, psychologists, optometrists, chiropractors, nurse practitioners, registered nurses, licensed practical nurses, nurse-midwives, clinical social workers, physician assistants, physical therapists, and Christian Science Practitioners listed with the First Church of Christ, Scientist in Boston, Massachusetts. This definition is intended to be broad and inclusive.

6. Q. Can an employee use paid sick leave at any time when he or she is scheduled to perform work for a Federal contractor?

Under the Final Rule, contractors are only required to allow employees to use paid sick leave at times the employees would be working on one of the four types of covered contracts described above. For example, if an employee works on an SCA-covered contract for security services for 30 hours each workweek and works for the same contractor on a private contract for security services an additional 30 hours each workweek, the contractor would only be required to allow that employee to use paid sick leave during the 30 hours the employee works on the SCA-covered contract. This does not prohibit a contractor from permitting employees to use paid sick leave during time they would have been performing non-covered work. A contractor may choose to do so, and would not be penalized for doing so; specifically, if a contractor has a more generous policy regarding when employees may use paid sick leave than is necessary under the Final Rule such that an employee could use all 56 hours of his accrued paid sick leave during a period when he was working exclusively on a private contract, the contractor is not obligated to provide any additional paid sick leave for use during time the employee spends performing work on or in connection with covered contracts.

7. Q. Who is an individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship?

Under the Final Rule, this term means any person with whom the employee has a significant personal bond that is or is like a family relationship, regardless of biological or legal relationship. It includes such relationships as grandparent and grandchild, brother- and sister-in-law, fiancé and fiancée, cousin, and aunt and uncle. It could also include, for example, an individual who was a foster child in the same home in which the employee was a foster child for several years and with whom the employee has maintained a sibling-like relationship; a friend of the family in whose home the employee lived while she was in high school and whom the employee therefore considers to be like a mother or aunt to her; or an elderly neighbor with whom the employee has regularly shared meals and to whom the employee has provided unpaid caregiving assistance for the past five years and whom the employee therefore considers to be like a grandfather to her.

8. Q. Does an employee have to find a replacement worker in order to use paid sick leave?

No. A contractor may not make an employee's use of paid sick leave contingent on the employee's finding a replacement worker to cover any work time to be missed.

9. Q. What amounts of paid sick leave could an employee use, or would an employee have to use, when she needs to take leave?

A contractor may not limit an employee's use of accrued paid sick leave over the course of a year other than on the basis of how much paid sick leave an employee has available for use. The contractor also may not limit the amount of leave an employee can use at one time other than on the basis of how much paid sick leave an employee has available for use.

A contractor must allow employees to use paid sick leave in increments of no greater than one hour. For example, if an employee needs to be an hour late for work because of a doctor's appointment, her contractor would have to permit her to use only one hour of leave (rather than, for example, a full day). If an employee needs to be a half an hour late for work because of the doctor's appointment, the contractor could choose either to require the employee to take one hour of leave, allowing the employee to be absent for the full hour or to waive its increment of leave policy in order to return an employee to work—in this example, by putting the employee to work immediately after she returns from the appointment—in which case the contractor would be required to treat the employee as having used no more than the amount of leave the employee actually used, half an hour.

If it is physically impossible for an employee using paid sick leave to commence or end work during a shift, such as if a flight attendant is scheduled to work aboard an airplane, and no equivalent position is available, the employer may require the employee to use sick leave to cover the entire period that the employee is forced to be absent.

10. Q. How does an employee request leave?

Employees can request paid sick leave by any oral or written method, including in person, by phone, via email, or with a note reasonably calculated to provide timely notice of the employee's intent to take leave.

11. Q. What information must be contained in the request to use paid sick leave?

The request must contain enough information for a contractor to determine whether the absence would be a proper use of paid sick leave. The contractor may ask questions narrowly tailored to making that determination. The request for leave does not need to contain extensive or detailed information about the reason for the leave and a contractor may not require such information. The employee does not need to specify all symptoms or details of the need for leave, nor does the employee's request need to include a specific reference to the EO or part 13 or even use the words "sick leave" or "paid sick leave."

The request for leave should provide an estimate of the timing and amount of leave needed. A request to use paid sick leave is acceptable if the employee directs it to the appropriate personnel under a contractor's policy or, in the absence of a formal policy, any personnel who typically receive requests for other types of leave on behalf of the contractor, such as a supervisor or human resources department staff.

12. Q. How far in advance does an employee have to request leave?

If the need to use paid sick leave is foreseeable, the employee's request must be made at least seven calendar days in advance. If the need for leave is not foreseeable, the employee must make the request for leave as soon as is practicable.

13. Q. When may a contractor deny an employee's request to use paid sick leave?

Denial of a request to use paid sick leave is appropriate if, for example, the employee did not provide sufficient information about the need for paid sick leave; the reason given is not consistent with the uses of paid sick leave described in the Final Rule; the employee did not indicate when the need would arise; the employee has not accrued, and will not have accrued by the date of leave anticipated in the request, a sufficient amount of paid sick leave to cover the request (in which case, if the employee will have any paid sick leave available for use, generally only a partial denial is appropriate); or the request is to use paid sick leave during time the employee is scheduled to be performing non-covered work.

14. Q. How does a contractor communicate approval or denial of a request to use paid sick leave?

A contractor may communicate its grant of a request to use paid sick leave either orally or in writing. A contractor must communicate any denial of a request to use paid sick leave in writing (including electronically, if the contractor customarily corresponds with or makes information available to its employees by such means), with an explanation for the denial.

If a denial is based on insufficient information provided in the request, the contractor must allow the employee to submit a new, corrected request. If the denial is based on an employee's request to use paid sick leave during time she is scheduled to be performing non-covered work, the denial must be supported by records adequately segregating the employee's time spent on covered and non-covered contracts.

15. Q. What if allowing a worker to take leave will create a hardship for my business? Can I ask a worker to postpone leave if it isn't an emergency?

No, a contractor may not make the use of leave contingent on finding a replacement worker or fulfilling operational needs. However, a contractor may deny a request for leave if the employee did not request leave at least seven days in advance for leave that was foreseeable, or as soon as practicable if the need for leave was not foreseeable.

16. Q. Why can't an employer count the same leave for both SCA/DBA and EO?

Statutory requirements prohibit an employer from counting the paid sick leave required by the EO toward fulfilling its SCA or DBA obligations. The SCA and DBA both provide that fringe benefits furnished to employees in compliance with their requirements do not include any benefits "required by Federal, State, or local law." Thus, no benefit required by any other Federal law or by any State or local law, such as unemployment compensation, workers' compensation, or social security, is a fringe benefit for purposes of the SCA or DBA. Similarly, because paid sick leave provided in accordance with the EO and the Final Rule is required by law, such paid sick leave cannot count toward the fulfillment of SCA or DBA obligations.

17. Q. How long does a contractor have to respond to a request to use paid sick leave?

Under the Final Rule, a contractor would have to respond to any request to use paid sick leave as soon as is practicable after the request is made. The determination of when it is practicable for a contractor to provide a response will take into account the individual facts and circumstances; it should in many circumstances be practicable for the contractor to respond to a request immediately or within a few hours. In some instances, such as if it is unclear at the time of the request whether the employee will be working on or in connection with a covered or non-covered contract at the time for which paid sick leave is requested, as soon as practicable could mean within a day or no longer than within a few days.

18. Q. May an employer require certification or documentation to verify the need to use paid sick leave?

A contractor may require certification issued by a health care provider – or other documentation if the leave is related to domestic violence, sexual assault, or stalking – to verify the need for paid sick leave only if the employee is absent for three or more consecutive full workdays and only if the employee received notice of the requirement to provide certification or documentation before returning to work.

19. Q. Will the verification information an employee provides to his or her employer be kept private?

Contractors are prohibited from disclosing any verification information related to, and they are required to maintain confidentiality about, domestic abuse, sexual assault, or stalking, unless the employee consents or when disclosure is required by law. Confidentiality requirements likewise apply to records created by or provided to a contractor relating to medical histories.

20. Q. What type of certification or documentation is sufficient?

Certification issued by a health care provider is any type of written document created or signed by a health care provider (or by a representative of the health care provider) that contains information verifying that the physical or mental illness, injury, medical condition, or need for diagnosis, care, or preventive care exists. For example, a note from a hospital nurse stating that an employee needed to have surgery and would need at least three days to recover before returning to work would meet the definition, as would a note from an employee's parent's doctor stating that the parent is in need of daily caretaking.

Documentation related to domestic violence, sexual assault, or stalking may come from any person involved in providing or assisting with the care, counseling, relocation, assistance of a victim services organization, or related legal action, which would include a health care provider, counselor, employee of the victim services organization, attorney, clergy, family member, or close friend. Self-certification is also permitted. For example, the documentation could consist of a note from a social worker at a victim services organization stating that the employee received services from the organization related to being a victim of domestic violence and moved to a new home for reasons related to the domestic violence, as well as a receipt from a moving company or a note from a landlord that indicates the date(s) of the move. The certification need not name the perpetrator of the domestic violence, the nature of the acts that constitute domestic violence, the addresses of the old or new homes, or any other details beyond those sufficient to make clear that the time was used for a purpose that justifies the use of paid sick leave.

21. Q. When would a worker have to provide documentation related to the paid sick leave use if the contractor requires it, and when would the contractor have to respond?

A contractor may require the employee to provide certification or documentation within 30 days of the date the leave begins. If the contractor does not receive certification or documentation from an employee, the contractor may, within 10 calendar days of the deadline for receiving the certification or documentation, retroactively deny the employee's request to use paid sick leave.

Under the Final Rule, if the employee provides certification or documentation but the submission is insufficient to verify the employee's need for paid sick leave, the contractor must notify the employee of the deficiency and allow the employee at least 5 days to provide new or supplemental certification. If after the 5 or more days allowed for resubmission the employee has either provided no new or supplemental certification or documentation or the new certification or documentation is still insufficient to verify the employee's need for paid sick leave, the contractor may, within 10 calendar days of the employee's deadline for providing sufficient certification or documentation, retroactively deny the employee's request to use paid sick leave.

22. Q. May a contractor contact a health care provider regarding certification?

The Final Rule permits a contractor to contact the health care provider or other individual who created or signed any certification or documentation only for purposes of authenticating the document or clarifying its contents. The contractor would not be permitted to request additional details about the medical or other condition referenced, seek a second opinion, or otherwise question the substance of the certification.

23. Q. Who could make the contact with the health care provider regarding certification?

A human resources professional, a leave administrator, or a management official should make contact with the health care provider or other individual who created or signed the certification or documentation. The employee's direct supervisor may not contact the employee's health care provider unless there is no other appropriate individual who can do so.

24. Q. What is the status of pay and benefits while an employee is on paid sick leave?

A contractor must provide to an employee using paid sick leave the same regular pay and benefits the employee would have received had the employee not used paid sick leave. The employer, however, does not have to allow the employee to accrue additional paid sick leave under the EO, while the employee is using paid sick leave.

25. Q. May an employee use paid sick leave provided in accordance with EO 13706 for time to travel to and from a location where the employee will receive medical examination or treatment, including travel to another state?

Yes. The leave required under EO 13706 includes time spent traveling to and from the location where an employee will receive medical examination or treatment.

INTERACTION WITH OTHER LAWS AND PAID TIME OFF

1. Q. What if another law or union collective bargaining agreement requires employers to provide more leave than is required under EO 13706?

Nothing in the EO or the Final Rule excuses noncompliance with or supersedes any applicable Federal or State law, any applicable law or municipal ordinance, or a collective bargaining agreement requiring greater paid sick leave or leave rights than those established under the EO.

2. Q. How do the EO's requirements interact with state or local paid sick time laws?

A contractor's compliance with a State or local law does not excuse the contractor from compliance with EO 13706 or the regulations. A contractor could satisfy its obligations under the EO by providing paid sick time that fulfills the requirements of a State or local law as long as the paid sick time is accrued and may be used in a manner that meets or exceeds the requirements of the EO and the Final Rule.

3. Q. How do the EO's requirements interact with the SCA and DBA?

Paid sick leave required by the EO and the Final Rule is in addition to a contractor's obligations under the SCA and DBA. A contractor may not receive credit toward its prevailing wage or fringe benefit obligations under those Acts for any paid sick leave provided in satisfaction of the requirements of the EO.

If a contractor chooses to provide more paid sick time than is required by the EO, that additional paid sick time could count toward SCA or DBA obligations if it complies with the requirements under those statutes.

4. Q. Will the Service Contract Act (SCA) health and welfare benefit rate be adjusted now that contractors must provide paid sick leave in addition to fulfilling their SCA obligations?

Yes. When the WHD issues an All Agency Memorandum (AAM) announcing its regular, annual update to the nationwide SCA health and welfare benefit rate, the AAM will also announce a health and welfare benefit rate specifically for hours when a Federal contractor's service employees are performing work on SCA-covered contracts also covered by EO 13706. This rate will be lower than the regular nationwide rate because these employers will be providing employees with paid sick leave required by the EO in addition to health and welfare benefits under the SCA. On July 25, 2017, the WHD issued AAM 225, available at https://sam.gov/content/wage-determinations/resources/all-agency-memos, which announced that effective August 1, 2017, the regular nationwide SCA health and welfare benefit rate would be $4.41 per hour and the SCA health and welfare benefit rate for work to which EO 13706 applies would be $4.13 per hour.

5. Q. If a Federal contractor provides paid sick time to its employees on a contract that is not covered by EO 13706, can it pay those employees the Service Contract Act (SCA) health and welfare benefit rate applicable to contracts covered by the EO?

No. A contractor may use the SCA health and welfare benefit rate designated for work on contracts to which EO 13706 applies only with respect to work as to which the contractor is obligated by EO 13706 to provide access to paid sick leave. For work to which EO 13706 does not apply, the contractor is not obligated to provide employees with paid sick leave in accordance with the EO and therefore is not entitled to a reduction in the SCA health and welfare fringe benefit rate. (Any paid sick time a contractor provides even though it is not required by EO 13706 can, however, count toward SCA obligations if it is provided in compliance with SCA requirements.) Therefore, if a contractor has SCA-covered contracts to which EO 13706 does not apply (for example, because they are not "new contracts" under the EO), the contractor must use the regular nationwide SCA health and welfare fringe benefit rate as to time service employees are performing on those contracts regardless of whether EO 13706, and the lower SCA health and welfare rate, apply to some of the contractor's employees' other hours worked.

6. Q. How do the EO's requirements interact with the FMLA?

A contractor's obligations under the EO and Final Rule have no effect on its obligations to comply with, or ability to act pursuant to, the FMLA. Paid sick leave may be substituted for (that is, may run concurrently with) unpaid FMLA leave under the same conditions as other paid time off pursuant to FMLA regulations. For time off that is designated as FMLA leave and for which an employee uses paid sick leave, all notices and certifications that satisfy the FMLA's regulatory requirements would satisfy the request for leave and certification requirements of the Final Rule.

7. Q. How do the EO's requirements interact with a contractor's existing paid time off (PTO) policy?

A contractor's existing PTO policy can fulfill the paid sick leave requirements of the EO as long as it provides employees with at least the same rights and benefits that the Final Rule requires if the employee chooses to use that PTO for the purposes covered by the EO. In other words, if a contractor provides 56 hours of PTO that meets the requirements described in the Order and the Final Rule but employees can use the leave for any purpose, the contractor does not have to provide separate paid sick leave even if an employee uses all of the time for vacation or any other non-sick leave purpose.

The Final Rule also addresses PTO policies that provide more than 56 hours of leave: a contractor may choose to either (1) provide all PTO used for the purposes described in the Final Rule in compliance with the rule's requirements or (2) track, and make and maintain records reflecting, the amount of PTO an employee uses for the purposes required by the EO, in which case the contractor need only provide up to 56 hours of PTO with all of the EO's protections, such as documentation, certification, and recordkeeping, for each accrual year.

The key to compliance with the Order and the Final Rule is that employers with paid time off policies provide access to no less than 56 hours of paid leave under the required conditions, and that any such leave used for the purposes required by the EO is covered by the relevant protections, such as documentation, certification, and recordkeeping as required under part 13.

PROTECTIONS FOR EMPLOYEES

1. Q. Are there prohibitions against retaliation or discrimination included in the Final Rule?

Under the Final Rule, a contractor may not in any manner interfere with an employee's accrual or use of paid sick leave as required by the EO or Final Rule.

Additionally, a contractor may not discharge or in any other manner discriminate against an employee for: (1) using, or attempting to use, paid sick leave as provided for under the EO and Final Rule; (2) filing any complaint, initiating any proceeding, or otherwise asserting any right or claim under the EO and Final Rule; (3) cooperating in any investigation or testifying in any proceeding under the EO and Final Rule; or (4) informing any other person about his or her rights under the EO and Final Rule.

OBLIGATIONS OF CONTRACTING AGENCIES, DOL, AND CONTRACTORS

1. Q. Are there requirements for contracting agencies under this Final Rule?

Yes. Contracting agencies must ensure that a clause regarding the paid sick leave requirements is inserted into covered contracts. Depending on the type of contract, this clause will be the one included in the Department's Final Rule or one issued by the Federal Acquisition Regulatory Council. Contracting agencies must also assist the Department of Labor in enforcing the obligations of contractors, such as by withholding funds from contractors that violate the EO's requirements.

2. Q. What are the requirements for the Department of Labor under this Final Rule?

The Department will put notices online and on DBA and SCA wage determinations of the requirement to provide paid sick leave under the EO and the Final Rule. It will also notify contractors when it asks a contracting agency to withhold funds based on alleged violations of the EO and the Final Rule and is the agency responsible for enforcement of the EO.

3. Q. What are the requirements placed on contractors under this Final Rule?

Contractors with covered contracts must comply with the paid sick leave requirements. They must also insert a clause regarding those requirements into any covered lower-tier contracts and ensure that lower-tier contractors comply with them.

Contractors will be required to make and maintain records for purposes of the EO and the Final Rule. These include:

copies of notifications to employees of the amount of paid sick leave accrued;
denials of employees' requests to use paid sick leave;
dates and amounts of paid sick leave employees use; and
other records showing the tracking of employees' accrual and use of paid sick leave.

Contractors must keep employees' medical records, as well as records relating to domestic violence, sexual assault, and stalking, separate from other records and confidential.

Additionally, contractors are required to provide notice to employees of the paid sick leave requirements.

4. Q. How will these regulations work for the construction industry, in which employees change employers frequently?

Paid sick leave accrual and use requirements apply by contractor. Since an employee can accrue 1 hour of paid sick leave for every 30 hours worked for that contractor, if an employee only works for a contractor for a short time, she will only have the resulting amount of accrued leave available for use while working for that contractor. If the employee continues to work for the contractor on a different covered contract, however, the employee's accrued leave will carry over to work on the new contract.

In addition, in response to comments, the Final Rule permits contractors to fulfill their obligations under the Executive Order jointly with other contractors—that is, as though all of the contractors are a single contractor—through a multiemployer plan that provides paid sick leave in compliance with the rules and requirements of the Order and the Final Rule.

5. Q. May an employer provide benefits through contributions to a multi-employer plan?

Yes. The Department recognizes that in some industries, employees work on a short-term basis for numerous employers that provide employee benefits by contributing to multiemployer plans negotiated pursuant to CBAs. The Final Rule includes a new provision providing that a contractor may fulfill its obligations under the Order jointly with other contractors—as though all of the contractors are a single contractor for purposes of the EO—through a multiemployer plan that provides paid sick leave in compliance with the requirements of the EO. The new provision also provides that regardless of what functions the plan performs, each contractor remains responsible for any violation of the EO that occurs during its employment of the employee.

ENFORCEMENT

1. Q. How will the EO and regulations be enforced?

The Department of Labor is responsible for enforcement of the EO. Procedures for the Department's handling of complaints as well as other steps in the enforcement process are set out in the Final Rule. These procedures are largely identical to those adopted in the Final Rule implementing the Minimum Wage EO.

The Final Rule also describes remedies available for violations of the Final Rule's prohibitions on interference with the accrual or use of paid sick leave or discrimination for an exercise or attempted exercise of rights under the EO or regulations. These include monetary damages, liquidated damages, and equitable relief. Contractors may also be subject to debarment.

IMPACTS

1. Q. How many employees will receive additional paid sick leave under the Final Rule?

It will take an estimated five years for coverage under the Final Rule to fully phase in because it only applies to "new contracts." The Department estimated that when the Final Rule has been fully implemented, about 1,150,600 employees will receive additional paid sick leave. This estimate includes approximately 593,800 employees who currently receive no paid sick leave and 556,800 employees who receive some paid sick leave but would be entitled to receive additional paid sick leave as a result of the Final Rule.