Overview
This section defines the scope of Executive Order 13706 regarding paid sick leave, specifying that it applies to federal service and construction contracts performed within the United States. It identifies both the types of contracts and the specific categories of employees entitled to these benefits.
Key Rules
- Contractual Scope: The rules apply to contracts covered by the Service Contract Labor Standards (SCLS) and the Wage Rate Requirements (Construction) statute (formerly the Davis-Bacon Act).
- Geographic Limitation: Requirements only apply to work performed within the United States; for contracts with mixed locations, the rules apply exclusively to the portion performed domestically.
- Employee Coverage: Coverage extends to employees working "on or in connection with" a covered contract.
- Wage Law Interaction: The subpart applies to employees whose wages are governed by the SCLS, Wage Rate Requirements (Construction), or the Fair Labor Standards Act (FLSA).
- Exemption Inclusion: Employees who are exempt from FLSA minimum wage and overtime provisions (such as executive, administrative, or professional employees) are still covered by these paid sick leave requirements.
Practical Implications
- Contractors must implement systems to track hours and performance locations for all staff—including salaried, exempt employees—to ensure accurate paid sick leave accrual and compliance.
- Prime contractors must ensure that these requirements flow down to subcontractors who are providing labor for covered service or construction activities within the United States.