Hunton Employment & Labor Perspectives

President Obama signed an Executive Order on Monday, September 7, requiring federal contractors to provide paid sick leave to their employees, effective January 1, 2017.  The Order  requires federal contractors and their subcontractors to let employees earn at least one hour of paid sick leave for every 30 hours worked, up to 56 hours, or 7 days, of leave.

The new Executive Order is broad in scope.  In addition to typical illnesses of an employee or their direct relatives, the Order covers  individuals “whose close association with the employee is the equivalent of a family relationship.”  The Order also covers absences resulting from illness or injuries related to domestic violence, sexual assault, and stalking.

Announced on Labor Day in Boston, the Order is the latest move in a series of federal and administrative actions increasing burdens on employers.  In August, the National Labor Relations Board issued a ruling broadly redefining who is a joint employer for purposes of the National Labor Relations Act, making it more difficult for companies to enter into contracts without incurring potential liability as an employer.  Likewise, in July, the Department of Labor issued guidance stating that “most workers are employees under the [Fair Labor Standards Act’s] broad definitions,” and proposed a new rule that would greatly expand the number of employees who are eligible for overtime pay.  The Office of Federal Contract Compliance Programs (“OFCCP”) has similarly indicated an intent to expand its jurisdictional reach to entities that do business with federal contractors, under its “single entity” test.

The current legal climate under President Obama and his administration is very pro-employee.  And this is unlikely to be the last initiative we see -- employers should be prepared for additional changes to the landscape in the waning months of this administration.  Changes are brewing at the state level also.  Last year, California and Massachusetts passed legislation requiring employers to provide paid sick leave for their employees.  Indeed, President Obama’s Labor Day executive order is very similar to California’s Healthy Workplaces, Healthy Families Act of 2014, which went into effect on July 1, 2015.