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Government contractors must comply with two new employment rules on January 1, 2017

In 2017, government contractors must comply with two new requirements for their employees: an increased minimum wage rate and paid sick leave.

On September 20, 2016, the U.S. Department of Labor (DOL) announced that the minimum wage for government contractors will be increased to $10.15 an hour for 2017, up from $10.10 an hour during 2016. (The minimum wage for non-government contractors remains at $7.25 an hour.)

On September 29, 2016, DOL announced the final rule about how employees of government contractors must be given 7 days (56 hours) of paid sick leave annually.

Here is a summary of the key points of the final rule:

  • The rule becomes effective on November 29, 2016 and applies to federal contracts issued after December 31, 2016.
  • The rule primarily applies to contractors governed by the Davis-Bacon Act (construction) and the Service Contract Act.
  • Under the rule, each employee must accrue at least 1 hour of paid sick leave for every 30 hours worked on a covered contract.
  • Salaried employees (those exempted from the Fair Labor Standards Act because they are executive, administrative, or professional employees) are assumed to work 40 hours a week for calculating the accrual.
  • Employees must be informed, in writing, of their right to the paid sick leave, how much they have accrued, and how much has been used. (An electronic system can be used for this purpose.)
  • Employees may use paid sick leave for the following purposes:
    1. Physical or mental illness, injuries, or other medical conditions.
    2. Obtaining diagnosis, care, or preventative care from a healthcare provider.
    3. Caring for an employee’s child, parent, spouse, domestic partner, other blood relative, or person who has a relationship with the employee that is equivalent to a family relationship.
    4. Responding to domestic violence, sexual assault, or stalking.
  • A paid time off (PTO) system can be used instead of the accrual system.
  • The rule has extensive record-keeping requirements.
  • Contractors are not required to pay for unused sick leave when employees are terminated.
  • Contractors may not require employees to find replacement workers when the employees are absent on sick leave.

Contractors should begin to review the sick-leave requirements right away so that they are prepared to implement the required record keeping that will begin on January 1, 2017.

See these earlier posts about employment rule:

Items on this web page are general in nature. They cannot—and should not—replace consultation with a competent legal professional. Nothing on this web page should be considered rendering legal advice.

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