Overview
Subpart 22.21 implements Executive Order 13706, requiring federal contractors to provide paid sick leave to employees performing work on or in connection with covered service or construction contracts. It outlines the specific accrual rates, permissible uses for leave, and the enforcement mechanisms managed by the Department of Labor (DOL).
Key Rules
- Accrual Rate: Employees must accrue at least 1 hour of paid sick leave for every 30 hours worked on or in connection with a covered contract, with a minimum annual cap allowed at 56 hours.
- Carryover and Reinstatement: Accrued sick leave must carry over from one year to the next. If an employee is rehired by the same contractor within 12 months of separation, their accrued leave must be reinstated.
- Usage and Certification: Leave can be used for the employee's own health needs, caring for a family member, or issues related to domestic violence/sexual assault. Contractors can only require a medical certification if the employee is absent for three or more consecutive full workdays.
- Notification: Contractors must inform employees of their accrued leave balance in writing at least once per month or per pay period (whichever is shorter).
- Financial Payouts: Contractors are not required to pay out unused sick leave upon an employee's termination. However, if they choose to pay it out, they are relieved of the obligation to reinstate that leave if the employee is rehired within 12 months.
Responsibilities
- Contracting Officers (COs):
- Must incorporate FAR clause 52.222-62 into all covered solicitations and contracts (SCA and DBA covered).
- Must report any complaints or alleged violations to the DOL Wage and Hour Division within 14 days of receipt.
- Responsible for withholding contract payments or suspending advances at the direction of the DOL to satisfy unpaid leave obligations.
- Contractors:
- Primary responsibility for compliance, including recordkeeping and ensuring subcontractors also comply.
- Prohibited from interfering with leave rights or discriminating against employees who exercise their rights.
- Department of Labor (DOL):
- Maintains exclusive authority to conduct compliance investigations and enforcement actions.
- Determines remedies, including liquidated damages, and may initiate debarment proceedings.
Practical Implications
- Administrative Overhead: Contractors must implement precise tracking systems to differentiate between hours worked "on" a federal contract versus commercial work, especially since accrual is based on actual hours worked.
- PTO Integration: While contractors can use their existing Paid Time Off (PTO) policies to satisfy this requirement, the policy must meet or exceed all EO 13706 requirements (e.g., the 1:30 accrual rate and specific usage protections).
- Cross-Contract Liability: A significant risk exists under 22.2109(d), where the government can withhold funds from any contract held by the same contractor—not just the one where the violation occurred—to satisfy owed leave or damages.
- SCA/DBA Synergy: This subpart functions as a "fringe benefit" overlay. Contractors must ensure that providing this paid sick leave does not result in a reduction of other required wages or fringe benefits mandated by the Service Contract Act or Davis-Bacon Act.