E.O. 13706: Aligning PTO Policies for Federal Contractors

On September 30, 2016, the U.S. Department of Labor published a final rule to implement Executive Order (E.O.) 13706, Establishing Paid Sick Leave (PSL) for Federal Contractors.

Understanding E.O. 13706: Paid Sick Leave for Federal Contractors

E.O. 13706 was signed on September 7, 2015, and requires parties that enter into covered contracts with the federal government to provide covered employees with up to seven days of PSL annually, including paid leave allowing for family care.  

This particular E.O. is important for contractors, as it is made available to all employees working “on or in connection with” the contract- including executive, administrative, professional and computer employees that are otherwise exempt under 29 CF$ 541.  

With many employers already offering some form of PTO to their employees, what should federal contractors do if they wish to use existing PTO policies to comply with the requirements of E.O. 12706? 

Complying with E.O. 13706: Key Considerations

First, if a contractor policy already provides more than 56 hours, they can either treat all leave as EO PSL OR they can choose to only treat 56 hours as EO PSL if they keep records of leave taken for EO PSL qualifying purposes.  

These purposes include a recovering from a physical or mental illness, injury, or medical condition; obtaining diagnosis, care, or preventative care from a health care provider; or if related to those two purposes because of domestic violence, sexual assault, stalking, to obtain counseling, seek relocation, seek assistance from a victim services organization, or take related legal action. 

Under E.O. 13706, employees must accrue at least 1 hour of PSL for every 20 hours worked up to 56 hours per year, and employees must be notified in writing at least each pay period or each month (whichever is shorter) of the calculated hours they have accrued thus far. Alternatively, a contractor may provide an employee with the full amount of PSL (56 hours) at the beginning of each accrual year. Additionally, PSL carries over from one accrual year to the next. However, hours carried over from the previous accrual year shall not count toward any limit the contractor sets on annual accrual.  

Furthermore, PSL must be accounted for in relatively precise measurements- usage must be accounted for in increments of no greater than 1 hour, and the amount of PSL used may not exceed the hours an employee would have worked if the need for leave had not risen. An employee using PSL must receive the same regular pay and benefits he/she would have received had the employee not been absent from work, and use of PSL may not be made contingent on the employee finding a replacement worker to cover any work time to be missed.  

Employers may request the employee provide medical documentation for absences related to personal injury/illness to dispense PSL to them. However, a contractor may not require an employee to provide extensive or detailed information about the need to be absent from work or the employee’s family or family-like relationship with an individual for whom the employee is requesting to care.  

Although an employee shall make a good faith effort to supply a reasonable estimate of the length of the requested absence from work, a contractor shall permit the employee to return to work earlier or continue to use available PSL for longer than anticipated. The contractor shall maintain the confidentiality of any medical or other personal information contained in an employee’s request to use leave as required by § 13.25(d).  

If the need for leave is foreseeable, the employee’s request must be made at least 7 calendar days in advance. If the employee is unable to, the request shall be made as soon as is practicable. A contractor may communicate its approval of a request to use PSL either orally or in writing. However, a contractor must communicate its denial of a request to use PSL in writing with an explanation as to why. 

In terms of recordkeeping, a contractor shall make and keep records related to leave accrual, requests and usage. Records shall be made available to authorized representatives of the Wage and Hour Division for inspection, copying, and transcription if needed- and a contractor may not discharge or in any other manner discriminate against employees for exercising their right to request and use this sick leave. 

Should employers need further guidance on managing E.O. 13706 on their contracts, please email trust@onsigroup.com for further guidance.