Using Existing PTO Policies to Comply with the Requirements of E.O. 13706 – Paid Sick Leave for Federal Contractors

Can my company’s PTO policy be used to meet the Paid Sick Leave requirement? 


In short, YES! But before we break it down, let’s go over some history to broaden our understanding and dive in deep! 

E.O. 13706 was signed on September 7th, 2015, and requires certain federal contractors to provide covered employees with up to 56 hours or seven (7) days of PSL annually, including paid leave allowing for family care. 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.  

This E.O. is important for contractors, as Paid Sick Leave is made available to all employees working “on or in connection with” a covered contract– including executive, administrative, professional and computer employees that are otherwise exempt under 29 CFR 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. 13706? 


Proper Recordkeeping 


First, if a contractor policy already provides more than 56 hours, they can either treat all leave as E.O. PSL OR they can choose to only treat 56 hours as E.O. PSL (if they keep records of leave taken for E.O. PSL qualifying purposes). These purposes include 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 as a result 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 30 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 the full amount of PSL (56 hours) at the beginning of each accrual year. Additionally, PSL carries over from on 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.  

A contractor shall make and maintain records related to leave accrual, requests and usage. Records must 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. 


Proper Accounting 


Furthermore, PSL usage must be accounted for in increments of no less 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 arisen.  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 to provide medical documentation for absences related to personal injury/illness in order to validate the need for PSL to the employee. 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.  


Proper Process 


Although an employee shall make a good faith effort to provide a reasonable estimate of the length of the requested absence from work, a contractor must permit the employee to return to work earlier or continue to use available PSL for longer than anticipated. 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. The contractor is also required to 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).  


To sum it all up, it is important for contractors to understand the effects of recordkeeping, accounting, and process implementation in carrying out their obligations to provide PSL to their contract workforce. We understand how complex it can get!

But we also understand how meeting the obligation can be strategically managed to ensure your company is compliant, communicating clearly to employees, prepared for any audits or investigations, and protect your company’s bottom line! 

Should your company or team need further guidance on managing E.O. 13706 on their contracts, please email for further guidance. We are here to provide “Peace of Mind”!