Yesterday’s Advisor explored proposed DOL rules concerning paid sick leave for federal contractors. Today we provide more on that topic, maximum accrual, carryover, reinstatement, and payment for unused leave as well as existing leave policies.
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Maximum accrual, carryover, reinstatement, and payment for unused leave
The notice of proposed rulemaking (NPRM) provides that contractors may limit the amount of paid sick leave employees may accrue to 56 hours each year and must permit employees to carry over accrued, unused paid sick leave from 1 year to the next. The Department of Labor (DOL) also proposes to allow contractors to limit the amount of paid sick leave employees have accrued to 56 hours at any point in time.
Under the proposal, contractors will be required to reinstate employees’ accrued, unused paid sick leave if the employees are rehired by the same contractor or a successor contractor within 12 months after a job separation. Contractors will not be required to pay employees for accrued, unused paid sick leave at the time of a job separation (“cash-out”).
In addition, under the NPRM, contractors must account for the use of paid sick leave in increments of no greater than 1 hour and must provide employees using paid sick leave with the same pay and benefits they would receive if they hadn’t used the leave.
Existing leave policies
According to the DOL, a contractor’s existing paid time off (PTO) policy (if provided in addition to the fulfillment of the McNamara-O’Hara Service Contract Act or the Davis-Bacon Act obligations, if applicable) will satisfy the requirements of the Executive Order (EO) and the proposed regulations if the PTO:
- Is made available to all employees covered by the EO and proposed regulations;
- Can be used for at least all of the same purposes as paid sick leave;
- Is provided in a manner and an amount sufficient to comply with the rules and restrictions regarding the accrual of paid sick leave described in the proposed regulations;
- Is provided pursuant to policies sufficient to comply with the rules and restrictions regarding use of paid sick leave, requests for leave, and certification and documentation, at least with respect to any PTO used for the required purposes; and
- Is protected by the prohibitions against interference, discrimination, recordkeeping violations, and waiver of rights described in the proposed regulations, at least with respect to any PTO used for the required purposes.
In other words, under the NPRM, a contractor may use its PTO policy to satisfy its obligations under the EO, but only if the policy complies with EO’s requirements, as described above.
If, for example, a contractor does not permit an employee to use the PTO for reasons related to domestic violence, sexual assault, or stalking, its PTO policy would not satisfy its obligations under the EO.
In that case, the contractor could choose to amend its paid time off policy to include this reason for leave or could provide paid sick leave in addition to PTO. That PTO may be used for additional purposes, such as vacation, does not disqualify a PTO policy from satisfying the obligations under the EO provided that the PTO policy satisfies all the requirements summarized above and set forth in more detail in the proposed rule.
BLR®—Business & Legal Resources will be following this development closely and reporting on any developments in upcoming articles.
Contractors that want to know more about the proposed paid sick leave rule can go to DOL’s NPRM website.