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Paid sick leave for federal contractors puts firms in regulatory bind


An executive order signed by President Barack Obama that requires federal contractors to offer paid sick leave to workers could create complications for large firms that must comply with a growing number of different jurisdictions' paid sick leave rules, say experts.

Under the executive order signed by the president on Monday — Labor Day — workers for federal contractors will receive one hour of paid sick leave for every 30 hours worked beginning in 2017. The order affects about 300,000 workers, according to a fact sheet issued Monday by the White House.

In the fact sheet, President Obama also called upon Congress to pass the Healthy Families Act — H.R. 932 — which would require all businesses with 15 or more employees to offer up to seven paid sick days each year.

Marc A. Koonin, an associate with law firm Sedgwick L.L.P. in San Francisco, said the larger issue in terms of employer liability is that various state and local municipalities have paid sick leave laws that are not uniform.

According to a July report by the Washington-based National Partnership for Women & Families, paid sick days are, or will soon be, in place in 23 jurisdictions across the country, including four states — Connecticut, California, Massachusetts and Oregon — the District of Columbia and 18 localities.

“When you have multiple sets of rules, some at the municipal level and some at the state level and some if you're doing (federal) contracts, if you're doing federal contracts you're more likely to make a mistake because the rules don't necessarily mesh,” Mr. Koonin said.

The hodgepodge of laws “absolutely does make it difficult to comply and … harder to have one policy that fits all the jurisdictions in which you work,” said Christopher B. Kaczmarek, a shareholder with law firm Littler Mendelson P.C. in Boston.

Mr. Kaczmarek also said the executive order “creates, actually, a greater obligation in terms of how much leave an employer can accrue than is required by a lot of states.” In Massachusetts, for example, “employees are required to be able to accrue up to 40 hours of sick time. This provides for 56 hours,” or up to seven days of sick leave vs. five, “which is a significant increase, certainly,” he said.

President Obama also announced this week that the U.S. Department of Labor will publish a final rule, based on an executive order issued in April 2014, that prohibits federal contractors from discriminating against employees and job applicants who discuss their compensation.

The fact sheet said the rule encourages pay transparency and makes it “easier for workers to recognize pay discrimination and seek appropriate remedies.”

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