Obama’s Executive Order on Paid Sick Leave for Federal Contractors

On Labor Day September 7, 2015 during his meeting with labor leaders in Boston President Obama signed his Executive Order requiring companies that work under contracts with the federal government to extend a paid sick leave to their employees.

Federal contractors’ employees are about 300,000 people. They will get this benefit. But it is still a fraction of our labor market. Most employees in various sectors of the national economy still don’t have it. According to Mr. Obama, right now about 40% of private sector workers, or about 44 million people in the U.S. “don’t have access to paid sick leave.”

Under the terms of the Executive Order the employees of the federal contractors will earn not less than one hour of a paid leave for every thirty hours they worked, which sums up to about 7 or even 8 days per year. Both full time and part time employees will be able to benefit from the new rule.

To be exact it is not just a “sick” leave. Employees can take these paid seven days off to take care of themselves, their family member, or any other individual “related by blood or affinity whose close association with the employee is the equivalent of a family relationship.”

By doing this in the form of executive order President Obama is avoiding a necessity of its discussion and approval by Congress. However, he makes clear that he would like to extend this rule to all employees who work for medium and large companies in the U.S.A.

This new regulation does not provide any additional federal spending. The extra cost to companies should be offset by the benefits of having better workplace environment and improving the health and performance of their employees. This is one more presidential executive action on workers’ wages and benefits. One of the previous similar initiatives – on minimum wage rates and overtime pay to home care workers was recently upheld by the Court of Appeals in Washington, D.C.

This new rule will take effect on January 1, 2017. It is more about Obama’s legacy than an immediate action. However, it’s an important step in the right direction, since most workers don’t have any paid sick leave for now.