Wednesday, September 9, 2015

President Releases Executive Order -- Establishing Paid Sick Leave for Federal Contractors

Dana Halvorson

On September 7, 2015, President Obama released an Executive Order that establishes paid sick leave for federal contractors. Beginning with new contracts in 2017, workers will earn a minimum of one hour of paid sick leave for every 30 hours worked. It is anticipated that this Executive Order will impact approximately 300,000 people working on federal contracts. Pursuant to the Executive Order, the Secretary of Labor is required to promulgate regulations regarding the paid sick leave requirement by September 30, 2016. In addition, contracts would be required to have a flow-down provision for subcontractors. Therefore, the paid sick leave requirement would apply to federal contractors and subcontractors.

As you may know, Medicare (Parts A and B) or Medicaid providers are not considered to be federal contractors. However, if a provider currently has VA patients and a VA contract, they are considered to be a federal contractor. Per the Executive Order, the order applies only to a new contract or contract-like instrument, as defined by the Labor Secretary in the applicable regulations, if it is a contract or contract-like instrument for services covered by the Service Contract Act (among other categories). Since VA contracts are covered by the Service Contract Act, this Executive Order would apply to such contracts. Some of the unanswered questions from this Executive Order will likely be addressed by the interpreting regulations due by September 30, 2016, from the Department of Labor. AHCA continues to work with our Congressional champions on getting VA provider agreements across the finish line, and taking those with VA contracts out of the scope of being deemed a federal contractor. More details on the Executive Order can be found in this White House fact sheet.  

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