AGC Advocates for Construction Contractors in Rulemaking on Federal Contractor Paid Leave Mandate

April 14, 2016

AGC of America submitted extensive comments on the U.S. Department of Labor (DOL) Wage and Hour Division’s proposed rule implementing Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors, on April 12.

As previously reported, the Executive Order and proposed rule require contractors with direct federal contracts and their subcontractors under such contracts to provide employees working on or in connection with such contracts up to seven days of paid leave annually for sickness and other covered purposes.

In the comment letter, AGC urged DOL not to apply the rule to employees considered “laborers and mechanics” (craftworkers, roughly speaking) under the Davis-Bacon Act (DBA) or to independent contractors.  AGC explained how the paid sick leave mandate is ill-fitting and impractical given project-based, transitory, and seasonal character of construction work and the history of paying craftworkers only for time worked.  AGC also explained how the mandate is inconsistent with the DBA and would increase costs and inefficiency in federal procurement.  If the rule must apply to “laborers and mechanics,” AGC argued, then contractors should be allowed to (a) take credit for the paid leave toward meeting DBA prevailing wage obligations and (b) meet their paid leave obligations by contributing to a benefit trust fund. 

AGC’s comments also addressed problems in the proposed provisions on maximum accrual, carryover, and reinstatement of paid leave.  Various aspects of those provisions are confusing and difficult to apply in the construction industry. 

In addition, AGC raised concerns about:  the insufficient length of time allowed for implementation of the rule; the need for clarity on application of the rule to new task orders under existing indefinite-delivery, indefinite quantity (IDIQ) contracts; the appropriate remedy when a contracting agency fails to include the associated contract clause; the excessive withholding authority granted to contracting officers; and the unwarranted and unworkable vicarious liability imposed on prime and upper-tier contractors for subcontractor noncompliance.

A final rule is expected by September 30, 2016.  AGC will continue to monitor the rulemaking and initiatives to curtail it, and will report on significant developments.

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