Davis-Bacon Act (Federal Prevailing Wage)

Computer stethescopeOn March 11, 2016, the US DOL WHD extended the comment period through April 12, 2016 for its Notice of Proposed Rulemaking implementing Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors.
First published on February 25, 2016, the proposed rule seeks to implement the Executive Order signed by President Obama on September 7, 2015.  The proposed rule requires employers who enter into federal covered contracts (such as those prevailing wage jobs under the Davis-Bacon Act) to provide covered employees with up to 7 days of paid sick leave per year, including paid leave for family care.   

The proposed rule is anticipated to affect over 828,000 employees and would apply to new contracts and renewed contracts from solicitations issued on or after January 1, 2017 – or awarded thereafter.  Specifically, the rule would put many new burdens on employers with respect to paid sick leave.  Under the proposed rule, employees must accrue at least 1 hour of paid sick leave for every 30 hours worked in connection with a covered contracts – calculated at the end of each workweek.  Or, covered contractors can provide an employee with at least 56 hours of paid sick leave at the beginning of each accrual year (administratively easier).  In addition, the proposed rule mandates that employees must be informed in writing at least once a month regarding their amount of accrued paid sick leave.

Under the proposed rule, employers can limit the amount of paid sick leave to 56 hours per year, or may allow employees to carry over accrued, unused leave to the following year (and to cap it to 56 hours at any one point in time).  If terminated employers are not required to pay out unused sick time, however, if the employee is rehired withing 12 months, the employer must reinstate the employee’s unused paid sick time.

What will employees be able to use it for?  Among the usual suspects – actually being sick – they can also use it for caring for other family members who need care, as well as domestic violence, sexual assault, or stalking (if time away is for illness, injury, counseling, relocation, legal action, etc.).  Paid sick leave must be in increments of no more than 1 hour, and employees must be paid the same pay and benefits they would have received if they haven’t been used (this is where it is going to get tricky when an employee works on multiple sites, perhaps with different (or no) prevailing wage rates during a single week or even day).  In short – nothing has been finalized yet, but federal contractors should know that it is likely coming this year, and to prepare for policies and procedures to handle the same in 2017.  For example, the use of paid time off (PTO) may be a consideration for employers currently providing vacation plus sick leave.  Stay tuned!