Paid Sick Leave for Federal Contractors and Subcontractors: US

This Paid Sick Leave for Federal Contractors and Subcontractors policy applies to employees who work on or in connection with certain covered federal contracts and is designed to comply with Executive Order 13706 and its implementing regulations, which require covered contractors to provide paid sick leave that accrues based on hours worked and can be used for an employee's own health needs, to care for family members (including close relationships like family), and for certain needs related to domestic violence, sexual assault, or stalking. These rules can apply even when your organization already offers PTO or sick time.

The History Behind Paid Sick Leave for Federal Contractors and Subcontractors Policies in the US

Presidents have used executive orders for decades to shape contractor pay and workplace rules, and courts have generally allowed that approach when it ties back to economy and efficiency in contracting. That history matters because it set the legal precedent for a contractor-specific sick leave requirement without waiting for Congress to pass a nationwide Paid Sick Leave law.

President Obama signed Executive Order 13706 in 2015 after years of state and local paid sick leave laws, plus a growing expectation that paid time off should cover basic health needs. The Department of Labor then issued final rules in 2016 (implemented through the Federal Acquisition Regulation and DOL regulations) that required covered contractors and subcontractors to let workers accrue at least one hour of paid sick leave for every 30 hours worked, up to 56 hours per year, with carryover and anti-retaliation protections. Agencies also had to build the requirement into solicitations and contracts.

Contractor paid sick leave has also been shaped by the practical reality of compliance audits and enforcement. The DOL's Wage and Hour Division can investigate, require remedies, and coordinate with contracting agencies, so employers realized that a written policy and clean timekeeping practices reduce contract risk. We also see a steady trend in federal contracting toward benefit floors (think minimum wage and paid leave), so many employers treat EO 13706 compliance as a baseline and then harmonize it with broader PTO plans to avoid running two conflicting systems.

Which Law is this Paid Sick Leave for Federal Contractors and Subcontractors Policy Meant to Comply With?

If you create and distribute a Paid Sick Leave for Federal Contractors and Subcontractors Policy for your US-based employees, it's in an effort to comply with the US's Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors (as implemented by the U.S. Department of Labor's regulations at 29 CFR Part 13 and the Federal Acquisition Regulation clause at FAR 52.222-62).

How to Write a US-Specific Paid Sick Leave for Federal Contractors and Subcontractors Policy

• Start with "why" and introduce the concept, explain that certain employees working on covered federal contract work may receive paid sick leave that is separate from other leave, and that the more generous benefit applies when both could cover the same situation.
• Define when paid sick leave starts accruing for covered work.
• Explain how paid sick leave accrues and the maximum amount employees can accrue and hold at one time.
• List the permitted reasons employees may use paid sick leave, including the employee's health needs, family care, and needs related to domestic violence, sexual assault, or stalking.
• Describe the notice expectations for requesting leave and your organization's right to request documentation for longer absences.
• Explain documentation standards, including acceptable types, confidentiality, and that documentation should not require detailed medical or situational information.
• State how employees may use accrued time, including the increments allowed.
• Explain how paid sick leave is paid, including the pay rate basis and how paid sick time interacts with overtime calculations.
• Define the annual usage cap and how your organization defines the 12-month year for this benefit.
• Address carryover rules, separation treatment (no payout), and reinstatement of previously accrued leave for eligible rehires.
• Commit to providing employees visibility into their accrued and unused balances at key points.
• Include non-retaliation and non-interference protections, including that employees will not be required to find coverage for their absence.

When to Include this Policy in Your Employee Handbook

If you have employees in US and you don't have a similar policy that's available for all US employees, you should include this policy in your employee handbook for US-based employees. 

52.222-62 Paid Sick Leave Under Executive Order 13706 (k) states: 

Notice. The Contractor shall notify all employees performing work on or in connection with a contract covered by the E.O. of the paid sick leave requirements of E.O. 13706, 29 CFR Part 13, and this clause by posting a notice provided by the Department of Labor in a prominent and accessible place at the worksite so it may be readily seen by employees. Contractors that customarily post notices to employees electronically may post the notice electronically, provided such electronic posting is displayed prominently on any website that is maintained by the Contractor, whether external or internal, and customarily used for notices to employees about terms and conditions of employment.

Your employee handbook is a great place to post information in addition to any official posters.

Other Considerations

The law applies to US employers who have at least 1 employee in the US.

Exceptions

None.