Department of Labor Issues Final Rule on Paid Sick Leave for Federal Contractors

Jeff Roberts & Associates, PLLC

President Obama signed into law, the Executive Order 13706 on the 7th of September, 2015 which mandates companies to offer their employees sick leave. The details of this obligation were finally released last week by the U.S. Department of labor and will be binding on all contracts issued for January 1, 2017.

The rule as well as the commentary that comes with it isn’t exactly short and straightforward, however, it’s vitals were highlighted in key points. Basically, federal contractors must offer its workers one hour for every 30 hours of work. This will sum up to about 56 hours every year. This period is meant to allow workers take a break to cater to their physical and mental health. Based on the worker’s discretion, he/she could make use of it to take care of a loved one or to deal with other personal issues such as relocating, legal action, domestic violence an so on.

Sick leave of up to 56 hours can be rolled over in to the following year, however, the employers are not under any obligation to pay when the contract or employment is terminated. This law doesn’t stop or affect any of the benefits accruable to a staff based on the state or local laws. Therefore, as an employer, it is advisable you go through the laws binding your type of organization in any locality you find yourself before engaging the services of workers. A perfect example would be the states that mandate contractor employers to reinstate the paid leave of any employer that gets hired before a year of termination. Except, the employee isn’t owed in this regard.

This law implies that without having to provide a doctor’s report or any other proof of illness, an employee can take 2 consecutive days off from work. This, alongside the broad application to “close relationships” in addition to “family,” has to become more conscious of employee abuse of this system. This is also an issue for bosses that have workers that work on non-federal works in addition to that of Federal. It is also an issue for employees who handle administrative duties and not so much for those working on federal contracts directly.

There is a clause in the rule that prohibits any form of limitation or interference on the part of the employer when an employee wishes to exercise this right. Suspension from federal contracting for up to 36 months and in extreme cases, disbarment are the consequences of violating this law.

DOL releases new overtime regulations

The Fair Labor Standards Act overtime regulation was issued on the 17 of May 2016 by the U.S. Department of Labor. This law allows employees who aren’t earning extra for working beyond 40 hours a week to start doing so.

Prior to this time, one has to earn a minimum of $455 per week to be eligible for professional, administrative or executive exempt. However, the new law mandates that a worker needs to earn a minimum of $913 per week before they can be exempted from this overtime pay. The law also mandates an automatic increase with a certain percentage every 3 years. This was designed to create a general wage increase around the country.

These regulations will take effect from the first of December 2016 and based on the estimation of the Department of Labor, over 4.2 million employees who don’t currently receive will start receiving by December 2016. Employers are the ones who will get affected the most. Existing positions will have to be evaluated while the payroll cost will massively increase, and if they don’t want the effect of this law on their business, they may have to employ more people to avoid existing workers accruing overtime wages. Either way, they have to pay more. The employees that never had to record their time of entry and exit from the workplace will now have to as a result of the overtime pay. If you have questions regarding employment law, please call Jeff Roberts & Associates, PLLC at (615) 205-0904.

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