Jump to content
The Wifcon Forums and Blogs

Sign in to follow this  
Vern Edwards

Executive Order on Paid Sick Leave

Recommended Posts

Have you read the Sick Leave executive ordert? What do you think? FCR says it will be "costly." Note the requirement to flow down to subcontractors. What's a subcontractor?

Share this post


Link to post
Share on other sites

Interesting. The accumulated sick leave carries over from one year to the next, but there is nothing in the E.O. that creates a non-forfeitable right to the accumulated sick leave. (Did I miss something?) If there is no right then the sick leave is lost upon termination (but must be reinstated in certain circumstances). If there is no non-forfeitable right then the cost of the sick leave is recognized when it is used, not when it is earned. If the employee doesn't use the sick leave, there is no cost to be recognized for government accounting purposes.

What may be "costly" is the need to develop a tracking mechanism for the sick leave. That said, I'm guessing that the contractors most likely to be affected are the smaller ones, the ones who don't publish quarterly financial statements to the SEC. If I'm right, then the tracking mechanism can be as simple as an Excel spreadsheet. Or even 3x5 cards. Whatever works.

As for Vern's question, "What's a subcontractor?" the answer is simple. For purposes of complying with the E.O., a subcontractor is an entity to which the prime contract requirement is flowed-down. :-)

Hope this helps.

Share this post


Link to post
Share on other sites
Guest jrt132

here_2_help:

Looks like the leave must be accumulated from year to year. Check section 2 paragraph (d). It also appears one can keep their sick time if they move from one covered contractor to another. That will be very interesting.

JRT

Share this post


Link to post
Share on other sites
Guest jrt132

There is also no discussion regarding definitions for sick time compared to paid time off (PTO). Does PTO count as sick time?

Share this post


Link to post
Share on other sites

jrt132,

Here is 2(d) in its entirety--

"Paid sick leave accrued under this order shall carry over from 1 year to the next and shall be reinstated for employees rehired by a covered contractor within 12 months after a job separation."

I interpret that to mean that sick leave accumulates and crosses fiscal years. However, I do NOT interpret that to mean that the accumulated sick leave is portable. The language uses the terms "reinstated" and "rehired" which strongly implies the employees are coming back to the same contractor they left. I alluded to this circumstance in my original post. The only right to the accumulated sick leave upon termination/separation is that the accumulated balance is reinstated upon a rehire action within 12 months from the original separation date. Otherwise, the accumulated sick leave is lost at termination/separation.

I think I got the accounting treatment right in my original post.

To your question "is there a difference between PTO and sick leave" the answer is "it depends on the policies of the contractor". Many contractors combine sick leave and vacation (annual leave) into a single PTO benefit, which is fine ... but now that approach carries a bit more risk. I'm guessing many contractors affected by this E.O. will be looking at that decision, and may decide to split the benefits into the individual components. We'll have to see.

H2H

Share this post


Link to post
Share on other sites

How do you think this will effect current service contracts? Increased REAs?

Share this post


Link to post
Share on other sites

One thing I found interesting was the non-retaliation provision. I know many government agencies have taken action against employees for what they call sick leave abuse. This usually happens when an employee shows a pattern of taking sick leave on a Monday when they are too hung over to come to work or Friday when they want to get an early start on the weekend.

Share this post


Link to post
Share on other sites
Guest jrt132

Here:

I agree regarding re-hiring. The intent is likely to apply to being re-hired by the same contractor, but the paragraph is poorly written. The paragraph says the leave is reinstated if rehired by a covered contractor not the same covered contractor.

The PTO vs sick time may hurt the employees. I was just discussing this with a counterpart in California. The company we work for just reduced PTO and moved the hours into sick time in response to a similar initiative California.

Josh

Share this post


Link to post
Share on other sites

leo1102,

Is there any reason to think this E.O. will apply retroactively to contracts already awarded?

H2H

Share this post


Link to post
Share on other sites

Based on its plain language, the new policy will apply to all contracts, whatever the dollar value, for both commercial items and noncommercial items. It will apply to contracts for supplies, services, construction, and everything else. It will apply to all employees, hourly and salaried, professional, administrative, clerical, and other.

There is no indication that the new policy may or will be applied to contracts already awarded, but a decision will have to be made whether to apply it to options not yet exercised in order to treat all employees equitably. How will it work for employees working under two contracts, one covered and one not?

The biggest problem may well be with subcontractors at the various tiers, especially subcontractors under contracts for commercial items. And what about companies that have both government and nongovernment contracts but that do not provide paid sick leave? How are they supposed to handle this? Do some of their employees get the benefit while some don't? How many companies will this affect? Will Congress fund the new policy?

Disputes will not be subject to the Contract Disputes Act, but to enforcement by the Secretary of Labor. What kind of enforcement action can the Secretary take? Withholding of payment? Fines? Suspension and debarment?

The decision to issue this order was well-intentioned, but hasty, poorly thought out and, I think, unconstitutional. Had Congress proposed to put this policy into effect through legislation, the public would have had the opportunity to provide comments to their representatives. The president has simply ordered this, without seeking public comment or giving the public the opportunity to comment. Is this the way our government is supposed to work?

See Anderson, "Executive Orders "The Very Definition of Tyranny,' and the Congressional Solution, The Separation of Powers Restoration Act," Hastings Constitutional Law Quarterly, Spring 2002 (29 HSTCLQ 589).

Share this post


Link to post
Share on other sites

Vern - Thank you for the comprehensive response - I was thinking many of the same things - there are many unclear issues especially when reading the order with eyes wide open.

Share this post


Link to post
Share on other sites

Had Congress proposed to put this policy into effect through legislation, the public would have had the opportunity to provide comments to their representatives. The president has simply ordered this, without seeking public comment or giving the public the opportunity to comment. Is this the way our government is supposed to work?

Well the EO has been issued. We are going to have to wait and see what DOL issues to implement the EO and then what the FAR Councils issue - I believe it states something to that effect in the EO in section 3. The public will have an opportunity to provide comment for both the DOL and FAR Councils actions. I am also not sure about applying any new FAR policy changes to existing actions - see FAR 1.108 (d).

Don't like the EO fine - write up your comments and submit them to Regulations.gov when the DOL and FAR Federal Register Notices are published. I'm going to wait until the end of the process and after I have had an opportunity to read the final implementing regulations.

Share this post


Link to post
Share on other sites

policyguy:

By all means, wait for the final rule. That's how we get so many crappy rules, people wait for the axe to fall, then they hold their heads in their laps and complain.

All:

Policy applies to something. A well-written policy order is clear about that to which the policy applies, as opposed to how that application is to be implemented.

When DOL and the FAR councils publish implementing regulations, they will reject comments that object to the policy and its targets as opposed to its implementation.

Can the implementation limit the application of the policy in ways not expressly authorized by the E.O.? For instance, can the Secretary of Labor limit its application to contracts for other than commercial items? Can the FAR councils? Can they limit flowdown? Can they apply a dollar threshold? Those are questions that should have been considered before the policy was issued. They might have been considered had the president sought public comments. The E.O. does not provide for those limitations, and I don't think the DOL and the councils can set limits on their own initiative with policy authorization.

But the legislative process in this country has become so screwed up, who knows who can do what? It has become a free-for-all.

Share this post


Link to post
Share on other sites

I read the EO to apply to contracts for services, construction and various concession and other contracts related to Federal Lands and that the sCA and Davis Bacon Act thresholds will apply. It also mentioned the FLSA Also will apply to new contracts or contract like instruments after Dec 2016. I'm not clear whether contracts solicited prior to 2017, but but after the issuance of DOL implementing regulations, will be affected. I didn't see where supply contracts were covered per se.

Share this post


Link to post
Share on other sites

Joel:

I think you're right about supply contracts and the SCA and DBA thresholds. It's in Section 6.

I don't see any exemption for commercial items. Do you?

Share this post


Link to post
Share on other sites

policyguy:

By all means, wait for the final rule. That's how we get so many crappy rules, people wait for the axe to fall, then they hold their heads in their laps and complain.

Where's the concern over E.O. 13658, Establishing a Minimum Wage for Contractors? Same type of E.O. same process to be followed.

There is no sense in wasting time and energy on something that will take a year or more to come into the acquisition regulations. Additionally this will cross into a new Administration. Executive Orders can and have been rescinded. But for the time being there is nothing much we can do now.

Time and energy is probably better off being spent on getting ready for a lapse in appropriation (again!) and not raising the debt limit than this E.O.

Share this post


Link to post
Share on other sites

Joel:

I think you're right about supply contracts and the SCA and DBA thresholds. It's in Section 6.

I don't see any exemption for commercial items. Do you?

Vern, if its a commercial service, I think that the EO will be applicable. I don't think that it will apply to COTS item or other supply type commercial items.

Share this post


Link to post
Share on other sites

policyguy:

You're a policy guy. Right? Well, I'm discussing policy. If you don't want to discuss this policy, just drop out. You don't need to keep coming back here saying that I'm stirring a tempest in a teapot. Go solve your routine problems. No one burst into your office to talk about this.

You have bigger problems. Right? Because if the people in your agency haven't figured out how to deal with lapses in appropriations by now, you need to put someone in charge of operations who knows what he or she is doing. Lapsed appropriations is not a new problem. It's almost routine. You should have had contingency plans and agreements in place a couple of months ago for your ongoing service contracts.

Why don't you start a new thread and ask people to tell you what to do and how to do it?

Share this post


Link to post
Share on other sites

Have you read the Sick Leave executive ordert? What do you think? FCR says it will be "costly." Note the requirement to flow down to subcontractors. What's a subcontractor?

I think that the EO is "impractical" to put it nicely and especially onerous for firms which don't work exclusively on federal government contracts or for those performing intermittent fed services or short term construction projects.

It will increase costs for firms who must also compete for other than fed business opportunities. Many construction subcontractor's and trades persons work short term on a wide range of projects and for many different primes in private as well as public work. H2H's analysis of how the additional costs should be accounted for and what happens if employees are or aren't rehired by the same firm are indicative of the possible waste and additional costs to the employer and/or the Government. A great many construction workers are "travelers", who move between projects and various employers.

The statements that this EO will promote efficiency, economy and cost savings are nonsense, in my opinion.

Share this post


Link to post
Share on other sites
Guest
This topic is now closed to further replies.
Sign in to follow this  

×