Costs & Benefits: Paid Sick Leave For Federal Contractors

By: Jake Clabaugh, WIPP Government Relations 

Federal contractors have been hit with a bevy of new regulations over the past few months – everything from increased reporting of labor and safety violations, a raise in minimum wages and increases in mandatory overtime pay. The next shoe will drop in January 2017, when ALL Federal contractors, primes and subs, will have to provide paid sick leave benefits to workers. The Department of Labor (DOL) proposed rules that would implement this change last month.

Contracts issued January 1, 2017 will require all Federal contractors to give employees 1 hour of paid sick leave per 30 hours worked. This rule will only apply to time spent on Federal contracts, so if an employee performs some work for a private sector client, those hours would not count toward sick leave accrual. Additionally, earned sick leave will carry over from one year to the next.

Why just contractors? The President issued an Executive Order to make the change. Like other new regulations pertaining to contractors, the President can make these decisions for his workforce. Congress has been unable to decide if or how to move forward on these issues so the President decided to act on his own. As the Commander in Chief, he can determine procurement policy – including requirements for contractors – without Congress having to pass a law. 

While WIPP members support worker benefits in practice, we don’t believe that the DOL gave enough consideration to how this rule will affect small businesses. Without an exception for small businesses, the vast majority of women-owned business will be compelled to provide the same benefits as multi-billion dollar firms.

WIPP’s comments to DOL on the proposed rule can be read in full here.