United States Government

Memorandum

FORM G-115f (1-92)

Railroad Retirement Board

November 16, 2015

L-2015-53

TO

FROM

The Board

Karl T. Blank J

General Counsel

SUBJECT : Executive Order - Establishing Paid Sick Leave for Federal 

Contractors

This memorandum is to provide a brief analysis ofthe Executive Order -

Establishing Paid Sick Leave for Federal Contractors (“Order”), which President

Obama ordered on September 7, 2015. The Order provides that Federal

Contractors must annually provide its employees with at least seven (7) days of

paid sick leave, which includes paid leave for allowing for family care. Based on

my review ofthe Order, the Board must comply with the governing provisions of

the Order. The Order will apply to all covered contracts where the solicitation for

such contract has been issued or the contract has been awarded outside the 

solicitation process by the Railroad Retirement Board on or after January 1, 2017.

A discussion ofthe Order is set forth below.

The Order applies to a new contract or contract-like instrument ifit is a

procurement for services or construction; a contract covered by the Service

Contract Act; a contract for concessions including any excluded by Department of

Labor regulations (29 CFR 4.133(b)); or a contract entered into with the Federal 

government in connection with Federal property or lands and related to offering

services to Federal employees, their dependents or the general public. The Order 

applies ifthe wages of employees under such contract are governed by the DavisBacon Act, the Service Contract Act, or the Fair Labor Standards Act.1 However,

1 The Davis-Bacon and Related Acts (40 U.S.C. Chapter 31, subchapter IV), apply to

contractors and subcontractors performing on federally funded or assisted contracts in excess of

$2,000 for the construction, alteration, or repair (including painting and decorating) of public 

buildings or public works. Davis-Bacon Act and Related Act contractors and subcontractors
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the order does not apply to grants, contracts and agreements with and grants to

Indian Tribes under the Indian Self-Determination and Education Assistance Act,

or any contracts expressly excluded by the regulations set forth in the governing

provisions ofthe Order.

The Order, which applies to all executive departments and agencies ofthe Federal 

Government, provides that work performed by parties that contract with the

Federal Government are entitled to accrue at least 7 days of paid sick leave

annually, including paid leave that qualifies as leave to care for a family member. 

Employees employed by federal contractors must request any paid sick leave either 

in writing or orally at least 7 calendar days in advance or as soon as is practicable.

The Order further states that all new contracts that become effective on or after 

January 1,2017, must include a clause specifying that all paid employees, in the 

performance ofthe contract or any subcontract, shall earn not less than 2 hour of

paid sick leave for every 30 hours worked. Furthermore, a contract employee can 

accrue a maximum of 56 hours each year. With respect to the type of leave,

contract employees may use paid sick leave for,

i. physical or mental illness, injury, or medical condition;

ii. obtaining diagnosis, care, or preventative care from a health care provider;

iii. caring for a child, a parent, a spouse, a domestic partner, or any other 

individual related by blood or affinity whose close association with the

employee is the equivalent of a family relationship who has any ofthe

buildings or public works. Davis-Bacon Act and Related Act contractors and subcontractors 

must pay their laborers and mechanics employed under the contract no less than the locally

prevailing wages and fringe benefits for corresponding work on similar projects in the area. The 

Davis-Bacon Act directs the Department of Labor to determine such locally prevailing wage

rates.

The Service Contract Act otherwise known as the McNamara-0’Hara Service Contract Act (41

U.S.C. Chapter 67) requires contractors and subcontractors performing services on prime 

contracts in excess of $2,500 to pay service employees in various classes no less than the wage 

rates and fringe benefits found prevailing in the locality, or the rates (including prospective 

increases) contained in a predecessor contractor's collective bargaining agreement. The

Department of Labor issues wage determinations on a contract-by-contract basis in response to

specific requests from contracting agencies. These determinations are incorporated into the

contract.

The Federal Labor Standards Act of 1938 (29 U.S.C.§§ 201-219) establishes minimum wage, 

overtime pay, recordkeeping, and youth employment standards affecting employees in the

private sector and in Federal, State, and local governments.
3

iv.

conditions or needs for diagnosis, care or preventative care described in (i) 

or (ii); or

domestic violence, sexual assault or stalking.

The Order further provides that all paid sick leave accrued under this Order shall

carry over from one (1) year to the next and shall be reinstated for employees

rehired by a covered contractor within 12 months after a job separation. However,

a Federal contractor is not required to make any financial payments to its

employees upon separation for any unused accrued sick leave. Equally important,

Federal Contractors are prohibited from requiring its employees who use paid sick

leave to find-a replacement to cover any work missed or discriminate against its

employee for taking paid sick leave. Paid sick leave required by the Order is in

addition to a contractor’s obligation under the Service Contract Act and the Davis 

Bacon Act. Further, contractors may not receive credit toward their prevailing

wage or fringe benefit obligations under those Acts for any paid sick leave

provided in satisfaction ofthe requirement ofthe Order.

It should also be noted that a contractor may only require certification for paid sick

leave for employee absences ofthree (3) or more consecutive workdays and 

documentation must be provided no later than 30 days form the first day of leave.2

Section 3 ofthe Order requires the Secretary ofLabor to issue regulations to carry 

out the Order by September 30, 2016. Within 60 days ofthe issuance of

regulations, the Order requires the Federal Acquisition Regulatory Council to issue

regulations in the Federal Acquisition Regulation to provide for inclusion in

Federal procurement solicitations and contracts subject to the Order. With respect

to action required by the Board, within 60 days ofthe Secretary’s issuance of

regulations, the Board must take steps to exercise any applicable authority to

ensure that contracts entered into after January 1, 2017 is consistent with the 

requirements set forth in section 2 ofthe Order. With respect to enforcement of

the Order the Secretary ofLabor is authorized to investigate potential violations of

the Order. The Order states if any provision ofthe Order or application of a

provision ofthe Order to a person or circumstance is held to be invalid, the

‘ Documentation may be required ifthree (3) or more consecutive days of paid sick leave is used 

for domestic violence, sexual assault, or stalking but the documentation shall provide the

minimum necessary information and the contractor shall not disclose any verification

information and maintain confidentiality about the domestic violence, sexual assault, or stalking

unless the employee consents or disclosure is required by law.
remainder ofthe Order and the application ofthe provisions ofsuch to any person 

or circumstance shall not be affected.

As explained above, effective with covered contracts where the solicitation for

such contract has been issued, or the contract has been awarded outside the

solicitation process, on or after January 1,2017, the Board must take the

appropriate action to comply with the Order. A copy ofthe Executive Order -

Establishing Paid Sick Leave for Federal Contractors is attached.

cc: Inspector General

Executive Committee

Assistant General Counsel

Director of Office ofLegislative Affairs