On Thursday, February 25, 2016, the U.S. Department of Labor proposed new rules to implement Executive Order 13706, which requires certain federal contractors to provide qualifying employees with at least seven days of paid sick leave each year, including paid leave for family care. These new rules are scheduled to go into effect by September 30, 2016, and employers who contract with the federal government should prepare for their implementation now. Noncompliance could result in suspension of federal payments or even termination of a federal contract.

The new rules generally apply to any employer who contracts with the federal government, whether pursuant to a prime contract or a subcontract, provided that the contract is either: (1) covered by the Davis-Bacon Act (DBA); (2) covered by the Service Contract Act (SCA); or (3) a contract in connection with federal property or lands and related to offering services for federal employees, their dependents or the general public. A contract is covered by the DBA if the contract is in excess of $2,000 and the principal purpose of the contract is for the construction, alteration and/or repair of public buildings or public works. A contract is covered by the SCA if the contract is in excess of $2,500, and the principal purpose of the contract is to provide services in the United States through the use of service employees.

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