Despite Some Relief from DOL, Federal Contractor Paid Sick Leave Mandate is Here to Stay

Employment Law

Although President Trump has reversed many of the executive orders signed by his predecessor, EO 13706, which requires federal contractors to provide paid sick leave, remains in place.  This week, the Labor Department granted some relief to employers by lowering the mandatory fringe benefit rate for certain federal contracts, which will help offset part of the Order’s cost.  Under EO 13706, federal contractors are required to provide employees up to 56 hours of paid leave sick leave each year, but the cost of this benefit may not be credited toward meeting the Service Contract Act's (SCA) hourly health and welfare fringe benefit requirement.  However, the Department of Labor recently announced that it has created an alternative SCA health and welfare fringe benefit rate for employees performing work on contracts covered by EO 13706 that will save contractors $582 per year for full-time non-exempt employees.  While this is welcome news, federal contractors will continue to face the administrative difficulties of working the EO's paid sick leave requirements into their existing paid leave benefit programs.