President Obama signed a new Executive Order on Monday, requiring federal contractors to grant paid sick leave to their workers beginning in 2017.  The Order is expected to affect 300,000 employees, all of whom will receive one hour of paid leave for every 30 hours worked, up to seven days each year.  Accrued leave may be used for absences due to illness, as well as time off related to domestic violence, sexual assault, stalking and to care for family members.

The Executive Order is modeled after the Healthy Families Act—a bill that would require all employers with 15 or more employees to grant annual paid sick leave.  President Obama announced his Executive Order at a Labor Day breakfast and rally in Boston where he simultaneously called on Congress to pass the Healthy Families Act.  Lawmakers, however, acknowledge the bill is unlikely to become law, as critics oppose the bill’s cost implications.

The Executive Order is the President’s means to achieve a similar end without congressional approval—even though it will affect only federal contractors and their employees.  According to the Order, the Department of Labor must implement the regulation by September 30, 2016, and the regulation will only apply to contracts initiated on or after January 1, 2017.

If you have any questions regarding these issues, please contact your labor and employment counsel at Smith, Gambrell & Russell, LLP.

This client alert is intended to inform clients and other interested parties about legal matters of current interest and is not intended as legal advice.