September 10, 2015 - Compliance

New Executive Order Establishes Sick Leave for Federal Contractors

compliance-600On September 7, 2015, President Obama signed an Executive Order requiring that federal contractors and their subcontractors permit their employees to earn up to 56 hours (or seven days) of paid sick leave each year.  The new paid sick leave requirements are in addition to existing obligations under the Service Contract Act and Davis-Bacon Act.

The Order directs the Secretary of Labor to issue implementing regulations no later than September 30, 2016, and directs the FAR Council to issue implementing regulations within 60 days thereafter.  The Order applies to all federal procurement solicitations, contracts, and “contract-like instruments” issued or awarded on or after January 1, 2017.

The Order specifies that the requirement is “a condition of payment,” which some courts have found are magic words triggering the application of the implied certification doctrine under the False Claims Act.  Consequently, it is important that contractors review the Order and ensure that their internal policies are in compliance with the new requirement.

A copy of the Executive Order is available here.