Paid Sick Leave will be Condition of Payment on Government Contracts

President Obama has issued an executive order establishing paid sick leave for federal contractors. Upon implementation, government agencies will place a requirement in U.S. government contracts that contractors and subcontractors must allow employees to earn up to 7 days or more of paid sick leave annually, including for family care.

The order does not mention it but there will be implications for whistleblowers because of it. If federal contractors and subcontractors do not abide by the policy when it becomes a part of their government contracts, they will be subject to liability under the False Claims Act. As provided by the law, there will be potential penalties for each false claim submitted to the government as well as treble damages. The law provides for rewards to eligible whistleblowers reporting violations of the law like this one in a range of 15 to 30 percent of the monetary recovery by the U.S. Government.

The regulation requires implementation on contracts entered into after January 1, 2017. However, it is possible that individual government agencies will begin adding it to their contracts earlier than the date set forth in the order.

The new policy was announced on Labor Day. It provides for one hour of leave for every 30 hours of work for up to seven paid sick days a year. It is expected to impact employer policies affecting around 300,000 workers. Several states and even more municipalities have previously passed laws requiring businesses to offer their employees paid sick leave.

The use of the government’s purse strings on contracts to encourage implementation by businesses has been an increasingly popular way to effect change. For example, the Congressional Budget for FY2015 required that no federal funds be provided to entities requiring employees to sign confidentiality agreements prohibiting or restricting reporting waste or fraud to the U.S. Government.

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