Detailed Overview of Executive Orders Scott W. Kezman 757-624-3008 swkezman@kaufcan.com

Executive Order 13706 “Establishing Paid Sick Leave for Federal Contractors” Applies to: Contracts entered into after January 1, 2017 that are: Procurement contracts for services or construction; Contracts for services covered by the Service Contract Act; Contracts for concessions, including any concessions contracts excluded by Department of Labor regulations at 29 CFR 4.133(b); and, Contracts in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public.   AND workers must be covered by the FLSA, SCA or DBA. Applies to subcontracts of these types of contracts!

What is a new contract? Contracts with the Federal Government that result from solicitations issued on or after January 1, 2017, or that are awarded outside the solicitation process on or after January 1, 2017. A contract that is entered into prior to January 1, 2017, will constitute a new contract if, through bilateral negotiation, on or after January 1, 2017: (1) the contract is renewed; (2) the contract is extended, unless the extension is made pursuant to a term in the contract as of December 31, 2016, providing for a short-term limited extension; or (3) the contract is amended pursuant to a modification that is outside the scope of the contract. The definition of “new contract” does not include the unilateral exercise of a pre-negotiated option to renew an existing contract by the Federal Government.

Accrual of Sick Leave: Contractors must permit employees to earn at least 1 hour of paid sick leave for every 30 hours worked. In addition, contractors cannot limit accrual of paid sick leave to less than 56 hours per year. Although any unused but accrued paid sick leave does not need to be paid upon termination, contractors must permit employees to carry forward paid sick leave from year to year. If an employer is rehired within 12 months after job separation, the employee’s prior paid sick leave bank must be reinstated. Ex. If employee carries over 16 hours from prior year, must be allowed to accrue an additional 40 hours. Accrual then stops. If employee then uses sick leave, accrual starts again and continues until either employee accrues an additional 16 hours or again reaches 56 hours.

Use of Paid Sick Leave: An employee may use paid sick leave for: Physical or mental illness, injury, or medical condition; Obtaining diagnosis, care, or preventive care from a health care provider; Caring for a child, parent, spouse, 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 above; Domestic violence, sexual assault, or stalking if the time is to obtain counseling, seek relocation, seek assistance from a victim services organization, take legal action (including preparation for or participation in any related civil or criminal legal proceeding) or to assist any individual in paragraph 3 with the activities described in this paragraph.   Contractors may not require employees to find a replacement to cover their work before taking paid sick leave. Employees should give an oral or written request when taking paid sick leave at least 7 calendar days in advance if the need is foreseeable, and in all other cases, give notice “as is practicable.” If an employee is absent on paid sick leave for three or more consecutive workdays and the absence is not due to domestic violence, sexual assault or stalking, the contractor may request certification from a health care provider with the minimum necessary information establishing a need for the employee to be absent from work for that length of time.

How do the EO’s requirements interact with a contractor’s existing paid time off (PTO) policies? A contractor’s existing paid time off (PTO) policy (if provided in addition to the fulfillment of SCA or DBA obligations, if applicable) will satisfy the requirements of the Executive Order if the paid time off: Is made available to all employees covered by the EO; Can be used for at least all of the same purposes as paid sick leave; Is provided in a manner and an amount sufficient to comply with the rules and restrictions regarding the accrual of paid sick leave; Is provided pursuant to policies sufficient to comply with the rules and restrictions regarding use of paid sick leave, requests for leave, and certification and documentation, at least with respect to any paid time off used for the required purposes; and Is protected by the prohibitions against interference, discrimination, recordkeeping violations, and waiver of rights described in the proposed regulations, at least with respect to any paid time off used for the required purposes. In other words, a contractor may use its paid time off policy to satisfy its obligations under the EO, but only if the policy complies with the EO’s requirements of the Executive Order as described. If, for example, a contractor does not permit an employee to use the paid time off for reasons related to domestic violence, sexual assault, or stalking, its paid time off policy would not satisfy its obligations under the EO. In that case, the contractor could choose to amend its paid time off policy to include this reason for leave or could provide paid sick leave in addition to paid time off. That paid time off may be used for additional purposes, such as vacation, does not disqualify a paid time off policy from satisfying the obligations under the EO, provided that the paid time off policy satisfies all the requirements summarized above. What if I have employees covered by a wage determination?

Executive Order 13672 “Amendment to EO 11246 Equal Employment Opportunity” This Executive Order specifically prohibits discrimination of employees and applicants on the basis of sexual orientation and gender identity. Contractors should amend their Equal Employment Opportunity clause accordingly.

Executive Order 13665 “Non-retaliation for Disclosure of Compensation Information” Contractors are prohibited from discharging or discriminating against employees who inquire about, discuss or disclose their compensation or compensation of other employees or applicants. This rule excludes employees who have access to the compensation information of employees or applicants through their essential job functions and make the disclosure to an individual who would not otherwise have access to the information. This rule does not apply to disclosure in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or consistent with a legal duty to furnish information. Contractors must incorporate this nondiscrimination provision into existing handbooks, and contractors must disseminate the nondiscrimination provision to employees and job applicants via an electronic notice or by posting a copy of the provision in a conspicuous place available to employees and applicants.

Executive Order 13658 “Establishing a Minimum Wage of $10 Executive Order 13658 “Establishing a Minimum Wage of $10.20/hour for 2017 for Federal Contractors” This Executive Order applies to workers whose wages are covered by the FLSA, SCA or DBA, and the contracts: Are for the procurement of services or construction; Are covered by the SCA; Are concession contracts; or Are contracts in connection with federal property or lands and related to offering services for federal employees, their dependents or the general public.   For contracts covered by the SCA or DBA, the contract must meet the minimum threshold amount then specified in the particular statute, and for contracts covered by the FLSA, the contract must meet the micro-purchase threshold (currently $3,000). This Executive Order applies to “new contracts” issued on or after January 1, 2015, or a contract awarded outside of the solicitation process on or after January 1, 2015. A contract is considered “new” even if it was entered into before January 1, 2015, if the contract is renewed, extended (unless extended pursuant to a term as of December 31, 2014 providing for short-term limited extension), or the contract is amended pursuant to a modification that is outside the scope of the contract. Applies to subcontracts, as well.

Any worker covered by the FLSA, SCA or DBA is entitled to the minimum wage pursuant to this Executive Order. The only exclusion is that any FLSA-covered worker performing “ancillary” work in connection with a covered contract for less than 20 percent of his or her hours in given workweek will not be entitled to minimum wage. However, if the employee performs any work directly related to the contract (i.e., specifically called for by the contract), the employee is entitled to the minimum wage for all his hours worked no matter how little time he actually spent performing the work. This Executive Order also covers tipped employees who must be paid a cash wage of at least $6.80 per hour, and they must receive tips amounting to at least the difference between the cash wage paid and the minimum wage. The Secretary of Labor establishes the minimum wage annually effective January 1, and it will be published at least 90 days before the new minimum wage is to take effect.

Executive Order 13496 “Notification of Employee Rights Under Federal Labor Laws” This Executive Order requires contractors to give notice to their employees of their rights under the National Labor Relations Act. The contractor must: Post the required employee notice so that it is prominent and readily seen by employees; Post the required notice electronically where they customarily place other electronic notices if they communicate with employees electronically; and Insert provisions in their subcontracts requiring subcontractors to comply with the above posting requirements as well.   The size, form and content of the notice are prescribed by the Secretary of Labor and cannot be altered by contractors or subcontractors. This EO tends to come and go depending on whether there is a Democratic or Republican President…

Executive Order 13494 “Economy in Government Contracting” This Executive Order prohibits contractors from seeking reimbursement for expenses incurred while attempting to influence employees to exercise or not to exercise the right to organize and bargain collectively. Examples include: preparing and distributing materials; hiring or consulting legal counsel or consultants on these matters; holding meetings; and, planning or documenting activities by managers, supervisors or union representatives during work hours, if these activities relate to influencing employees on their collective bargaining rights. However, contractors may still use federal funds to “maintain satisfactory relations between the contractor and its employees,” including costs of labor-management committees, employee publications, and other related activities.

Executive Order 13495 “Nondisplacement of Qualified Workers Under Service Contracts” This Executive Order requires contractors to give workers who would otherwise lose their jobs as a result of completion or expiration of a contract a “right of first refusal” for continued employment with the successor contractor. The right of first refusal must be held open for at least ten days. The right of first refusal excludes employees: Who are exempt from SCA-coverage because they operate in a bona fide executive, administrative or professional capacity; Who remain employed by the predecessor contractor; Failed to perform suitably on the job; or, Were hired by the predecessor contractor to work on federal and nonfederal service contracts as part of a single job. In addition, successor contractors may retrain their own employees in lieu of predecessor employees if the successor employees have worked for more than 3 months with the contractor and they would otherwise face layoff or discharge. The head of the contracting department or agency may exempt a particular contract, subcontract or class of contracts from this Executive Order if he finds that its application would not serve the purposes of the Order or would impair the ability of the government to procure services economically and efficiently. A contractor must include provisions in subcontracts restating this requirement, and the contractor must take such action against the subcontract as is necessary to enforce these requirements.

H. R. 1180 – Working Families Flexibility Act of 2017 (Rep H.R. 1180 – Working Families Flexibility Act of 2017 (Rep. Roby, R-AL, and 17 cosponsors)

Passed House on May 4, 2017. The Trump Administration supports H.R. 1180, the Working Families Flexibility Act of 2017. H.R. 1180 would amend the Fair Labor Standards Act to allow private-sector employers to give their employees the choice to receive paid time off instead of cash payments for each hour of time for which overtime compensation would otherwise be required. The bill would extend to private-sector workers a choice that public-sector employees have long enjoyed. The White House has stated that if H.R. 1180 were presented to the President in its current form, his advisors would recommend that he sign the bill into law.

Compensatory Time Off for Private Employees General Rule – An employee may receive, in accordance with this subsection and in lieu of monetary overtime compensation, compensatory time off at a rate not less than one and one-half hours for each hour of employment for which overtime compensation is required by this section.

Conditions - An employer may provide compensatory time to employees under paragraph (1) only if such time is provided in accordance with: Applicable provisions of a collective bargaining agreement between the employer and the labor organization that has been certified or recognized as the representative of the employees under applicable law; or In the case of an employee who is not represented by a labor organization that has been certified or recognized as the representative of such employee under applicable law, an agreement arrived at between the employer and employee before the performance of the work and affirmed by a written or otherwise verifiable record: in which the employer has offered and the employee has chosen to receive compensatory time in lieu of monetary overtime compensation; and entered into knowingly and voluntarily by such employee and not as a condition of employment. No employee may receive or agree to receive compensatory time off under this subsection unless the employee has worked at least 1,000 hours for the employee’s employer during a period of continuous employment with the employer in the 12-month period before the date of agreement or receipt of compensatory time off.

Hour Limit – Maximum Hours – An employee may accrue not more than 160 hours of compensatory time. Compensation date – Not later than January 31 of each calendar year, the employee’s employer shall provide monetary compensation for any unused compensatory time off accrued during the preceding calendar year that was not used prior to December 31 of the preceding year at either the employee’s regular rate of pay at the time the compensatory time is accrued or at the time the employee receives payment for such hours, whichever is greater. Excess of 80 hours – The employer may provide monetary compensation for an employee’s unused compensatory time in excess of 80 hours at any time after giving the employee at least 30 days notice. Such compensation shall be provided at either the employee’s regular rate of pay at the time the compensatory time is accrued or at the time the employee receives payment for such hours, whichever is greater.

D. Policy – Except where a collective bargaining agreement provides otherwise, an employer that has adopted a policy offering compensatory time to employees may discontinue such policy upon giving employees 30 days notice. E. Written request – An employee may withdraw an agreement to accept compensatory time at any time. An employee may also request in writing that monetary compensation be provided, at any time, for all compensatory time accrued that has not yet been used. Within 30 days of receiving the written request, the employer shall provide the employee the monetary compensation due either at the employee’s regular rate of pay at the time the compensatory time is accrued or at the time the employee receives payment for such time, whichever is greater.

Private employer actions – An employer that provides compensatory time to an employee shall not directly or indirectly intimidate, threaten, or coerce or attempt to intimidate, threaten, or coerce any employee for the purpose of – Interfering with such employee’s rights to request or not request compensatory time off in lieu of payment of monetary overtime compensation for overtime hours; or Requiring any employee to use such compensatory time.

Termination of employment – An employee who has accrued compensatory time off authorized to be provided under paragraph (1) shall, upon the voluntary or involuntary termination of employment, be paid for the unused compensatory time in accordance with paragraph (6).

Use of time – An employee – who has accrued compensatory time off authorized to be provided under paragraph (1); and who has requested the use of such compensatory time, shall be permitted by the employee’s employer to use such time within a reasonable period after making the request if the use of the compensatory time does not unduly disrupt the operations of the employer.

Remedies An employer that violates this section shall be liable to the employee affected in the amount of the rate of compensation for each hour of compensatory time accrued by the employee and in an additional equal amount as liquidated damages reduced by the amount of such rate of compensation for each hour of compensatory time used by such employee.