Captial dome and flag - smallPaid sick leave is coming from all sides. States are passing laws, most recently Oregon, going into effect January 1, 2016. Cities are passing ordinances, as we have recently seen in Emeryville, CA and Pittsburgh, PA. Even counties are getting in on this action- case in point: Montgomery County, Maryland. Not to be outdone, the executive branch issued an executive order on Labor Day that applies to federal contracts solicited or awarded after 2016, requiring federal contractors to provide paid sick leave to employees beginning January 2017. The leave can be used for:

  • an employee’s diagnosis and care for a mental or physical injury, illness or condition
  • caring for a child, parent, spouse, domestic partner or other very closely associated individual who has a mental or physical injury, illness or condition
  • certain absences related to domestic violence, sexual assault, or stalking

Federal contractors must allow employees to accrue one hour for every 30 worked, up to a maximum of 56 hours or 7 days. The accrual must carryover from one year to the next. The executive order does not require a federal contractor employer to pay out the accrued sick leave upon job separation, but the employer must reinstate the paid sick time if an employee is rehired within 12 months of a job separation.

It is estimated that this order could impact approximately 300,000 employees.  Obama announced the order during a Labor Day speech at a Boston breakfast, where he also encouraged Congress to pass the Healthy Families Act, which requires up to seven days of paid sick leave for all employers with more than 15 employees.  The proposed Act hasn’t gained traction in Congress, despite the fact that it was first introduced in 2005.  While Obama’s Executive Order could be a signal of more action on the federal level, gaining Congressional consensus on the Healthy Families Act remains a longshot. More likely than not, we will continue to see municipalities leading the charge and crafting local solutions to this issue.

The pace of sick leave legislation on the state, city, county and now federal levels can lead to confusion for employers. At Reed Group, our in-house legal team follows all leave legislation developments closely, ensuring that our clients benefit from the most up to date and compliant leave administration services and software. Sound good? For more information, and help developing a proactive plan for dealing with complicated leave issues, please feel free to contact us.


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