What Providers with VA Contracts Need to Know about the Paid Sick Leave Executive Order

Members | January 22, 2017 | by Peter Notarstefano

On Sept. 7, 2015, President Obama issued Executive Order 13706 (EO 13706), which requires that all government contractors and their subcontractors provide their employees working on the contract paid sick leave. While Medicare and Medicaid-certified providers do not constitute government contractors, providers with VA contracts are covered by EO 13706 through the Contract Services Act of 1965. 

On Sept. 7, 2015, President Obama issued Executive Order 13706 (EO 13706), which requires that all government contractors and their subcontractors provide their employees working on the contract paid sick leave. While Medicare and Medicaid-certified providers do not constitute government contractors, providers with VA contracts are covered by EO 13706 through the Contract Services Act of 1965. 

Specifics of EO 13706 and its proposed implementing regulation

  • Employees must be afforded not less than one hour of paid leave for every 30 hours worked, to be calculated at the end of each workweek. 
    • A contractor has the option of providing an employee with at least 56 hours of paid sick leave at the beginning of each accrual year rather than allowing the employee to accrue the leave based on hours worked.
    • All covered contractors would be required to inform employees in writing of the amount of paid sick leave they have accrued no less than monthly and at other times.
    • A contractor will not be required to pay an employee for accrued, unused paid sick leave at the time of a job separation; however, if the employee is rehired by the same contractor or a successor contractor within 12 months after job separation, the contractor will be required to reinstate the employee’s accrued, unused paid sick leave.
     
  • Contractors may not set a limit on the total accrual of paid sick leave per year, or at any point in time, at less than 56 hours, and unused hours carry over from one year to the next.
  • Leave earned may be used by an employee for any absence resulting from one of the following:
    • physical or mental illness, injury, or medical condition;
    • obtaining diagnosis, care, or preventive care from a health care provider;
    • 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 of the conditions or needs for diagnosis, care, or preventive care described in the preceding two bullets or is otherwise in need of care; or
    • domestic violence, sexual assault, or stalking, if the time absent from work is for the purposes otherwise described in the first two bullets, to obtain additional counseling, to seek relocation, to seek assistance from a victim services organization, to take related legal action, including preparation for or participation in any related civil or criminal legal proceeding, or to assist an individual related to the employee as described in the immediately preceding bullet in engaging in any of these activities.
     
  • The use of paid sick leave cannot be made contingent on the requesting employee finding a replacement to cover any work time to be missed. 

The paid sick leave requirement applies to contracts entered into after January 1, 2017.  Renewals of VA contracts within a 5-year contract cycle do not constitute new contracts. For example, if a VA contract was entered into on January 1, 2016, that agreement could be renewed each January 1 until it expired on December 31, 2020 without an obligation to provide paid sick leave.  A new contract with the VA would be required January 1, 2021 which would include the paid sick leave requirement.  

LeadingAge urges all members with VA contracts to review those contracts, the provisions of EO 13706 and regulations implementing the Executive Order with benefits and legal counsel.