Federal Acquisition Regulation; Paid Sick Leave for Federal Contractors, 91627-91636 [2016-30090]

Agencies

• DEPARTMENT OF DEFENSE
• General Services Administration
• National Aeronautics and Space Administration

[Federal Register Volume 81, Number 242 (Friday, December 16, 2016)]
[Rules and Regulations]
[Pages 91627-91636]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-30090]



[[Page 91627]]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1, 11, 22, and 52

[FAC 2005-93; FAR Case 2017-001, Item I; Docket No. 2017-0001; Sequence 
No. 1]
RIN 9000-AN27


Federal Acquisition Regulation; Paid Sick Leave for Federal 
Contractors

AGENCY: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule.

-----------------------------------------------------------------------

SUMMARY: DoD, GSA, and NASA are issuing an interim rule amending the 
Federal Acquisition Regulation (FAR) to implement the Executive Order, 
Establishing Paid Sick Leave for Federal Contractors, and a final rule 
issued by the Department of Labor.

DATES: Effective: January 1, 2017.
    Applicability:
     This rule applies to solicitations issued on or after 
January 1, 2017, and resultant contracts.
     Applicability of the clause at 52.222-62, Paid Sick Leave 
Under Executive Order 13706, to existing contracts is as follows--
    (1) Contracting officers shall include the clause in bilateral 
modifications extending the contract when such modifications are 
individually or cumulatively longer than six months.
    (2) In accordance with FAR 1.108(d)(3), contracting officers are 
strongly encouraged to include the clause in existing indefinite-
delivery indefinite-quantity contracts, if the remaining ordering 
period extends at least six months and the amount of remaining work or 
number of orders expected is substantial.
    Comment date: Interested parties should submit written comments to 
the Regulatory Secretariat Division at one of the addresses shown below 
on or before February 14, 2017 to be considered in the formation of the 
final rule.

ADDRESSES: Submit comments identified by FAC 2005-93, FAR Case 2017-001 
by any of the following methods:
     Regulations.gov: https://www.regulations.gov. Submit 
comments via the Federal eRulemaking portal by entering ``FAR Case 
2017-001'' under the heading ``Enter Keyword or ID'' and selecting 
``Search''. Select the link ``Submit a Comment'' that corresponds with 
``FAR Case 2017-001''. Follow the instructions provided at the ``Submit 
a Comment'' screen. Please include your name, company name (if any), 
and ``FAR Case 2017-001'' on your attached document.
     Mail: General Services Administration, Regulatory 
Secretariat Division, ATTN: Ms. Flowers, 1800 F Street NW., 2nd Floor, 
Washington, DC 20405-0001.
    Instructions: Please submit comments only and cite ``FAC 2005-93, 
FAR Case 2017-001'' in all correspondence related to this case. All 
comments received will be posted without change to https://www.regulations.gov, including any personal and/or business 
confidential information provided.

FOR FURTHER INFORMATION CONTACT: Ms. Zenaida Delgado, Procurement 
Analyst, at 202-969-7207 for clarification of content. For information 
pertaining to status or publication schedules, contact the Regulatory 
Secretariat Division at 202-501-4755. Please cite FAC 2005-93, FAR Case 
2017-001.

SUPPLEMENTARY INFORMATION: 

I. Background

    This interim rule revises the FAR to implement Executive Order 
(E.O.) 13706, Establishing Paid Sick Leave for Federal Contractors. The 
E.O. was signed September 7, 2015, and published in the Federal 
Register at 80 FR 54697 on September 10, 2015. The E.O. seeks to 
increase efficiency and cost savings in the work performed by parties 
who contract with the Federal Government by ensuring that employees on 
those contracts can earn up to 7 days or more of paid sick leave 
annually, including paid sick leave for family care. The E.O. directed 
the Department of Labor (DOL) to issue regulations by September 30, 
2016, and for the FAR Council to issue regulations within 60 days of 
the DOL regulations.
    The Wage and Hour Division of DOL published a final rule in the 
Federal Register at 81 FR 67598, on September 30, 2016, also entitled 
``Establishing Paid Sick Leave for Federal Contractors,'' which added a 
new part 13 to title 29 Code of Federal Regulation (CFR). The DOL rule 
applies to FAR acquisitions (as described in FAR 1.104) that are 
covered by the Service Contract Labor Standards statute or the Wage 
Rate Requirements (Construction) statute, and also applies to contracts 
for concessions, and to contracts entered into with the Federal 
Government in connection with Federal property or lands and related to 
offering services for Federal employees, their dependents, or the 
general public, even if such contracts are not governed by the FAR. 
Although the DOL rule covers both FAR-based contracts, and non-FAR-
based contracts and contract-like instruments, this interim rule only 
applies to FAR-based contracts.

II. Discussion and Analysis

    FAR implementation of the DOL rule by DoD, GSA, and NASA is 
discussed below, as well as those instances where the FAR rule differs 
from the DOL rule, and the rationale for those differences.

A. FAR Subpart 22.21, Paid Sick Leave for Federal Contractors

    1. Definitions (22.2101).
    a. Employee. The DOL definition of ``employee'' (29 CFR 13.2) is 
incorporated at FAR 22.2101, updating the statutory references to 
reflect the recodification of titles 40 and 41 of the United States 
Code (see FAR 1.110).
    b. New contract. The term ``new contract'' is defined in 29 CFR 
13.2, Definitions. The FAR rule does not adopt this definition because 
not all the elements of the definition apply to or are consistent with 
FAR principles. When FAR rules apply to existing contracts, application 
is addressed in the Effective Date/Applicability section of the 
preamble, not in the CFR, and treatment of bilateral modifications to 
existing contracts is also addressed in the Applicability section at 
the beginning of the preamble. See the discussion in Section II.A.3. 
below. In discussing treatment of existing contracts, DOL stated in the 
preamble of its rule, ``if the parties bilaterally negotiate a 
modification that is outside the scope of the contract, the agency will 
be required to create a new contract, triggering solicitation and/or 
justification requirements, and thus such a modification after January 
1, 2017, will constitute a `new contract' subject to the Executive 
Order's paid sick leave requirements.'' We understand this to refer to 
the long-standing requirement for any out-of-scope modification to be 
addressed as a new procurement and conducted in accordance with the 
requirements of FAR part 6, Competition Requirements.
    c. United States. The DOL regulations at 29 CFR 13.2 define 
``United States'' in a geographic sense consistent with the basic FAR 
definition of ``United States'' in FAR 2.101 (i.e., the 50 states and 
the District of Columbia). Therefore, this definition is not included 
at FAR 22.2101, but is included in the clause at FAR 52.222-62.
    d. Other definitions. The definitions from the DOL rule for 
``accrual year,'' ``multiemployer plan,'' and ``paid sick

[[Page 91628]]

leave'' were added in full text at FAR 22.2101. The definitions for 
``health care provider'' and ``certification issued by a health care 
provider'' are incorporated by reference from 29 CFR 13.2.
    2. Policy (FAR 22.2102).
    a. FAR 22.2102(a) states the policy of E.O. 13706, which requires 
contractors to allow all employees performing work on or in connection 
with a contract covered by the E.O. to accrue and use paid sick leave 
in accordance with E.O. 13706 and 29 CFR part 13.
    b. FAR 22.2102(b) and (c) address interaction with other laws and 
paid time off policies (29 CFR 13.5(f)).
    3. Applicability (FAR 22.2103). This section provides applicability 
of FAR subpart 22.21 to contracts that are covered by the Service 
Contract Labor Standards statute or the Wage Rate Requirements 
(Construction) statute, and are performed in whole or in part in the 
United States; and to employees performing on or in connection with 
such contracts whose wages are governed by the Wage Rate Requirements 
(Construction) statute, the Service Contract Labor Standards statute, 
or the Fair Labor Standards Act, including employees who qualify for an 
exemption from the Fair Labor Standards Act's minimum wage and overtime 
provisions (29 CFR 13.3).
    4. Exclusions (FAR 22.2104). This section delineates exclusions for 
certain employees from the general applicability in accordance with 29 
CFR 13.4(e) and (f). It also clarifies that an option renewal of 
contracts that do not contain the 52.222-62 clause will not trigger 
automatic application of the clause.
    5. Paid sick leave for Federal contractors and subcontractors (FAR 
22.2105). This section provides information regarding some of the basic 
paid sick leave requirements in accordance with 29 CFR 13.5.
    6. Prohibited acts (FAR 22.2106). This section addresses the 
prohibited acts set forth at 29 CFR 13.6 (i.e., interference, 
discrimination, and failure to make and maintain or to make available 
required records, or any other failure to comply with 29 CFR 13.25).
    7. Waiver of rights (FAR 22.2107). This section states that an 
employee cannot waive, nor can a contractor induce an employee to 
waive, rights under E.O. 13706 and 29 CFR part 13 (29 CFR 13.7).
    8. Multiemployer plans or other funds, plans, or programs (FAR 
22.2108). This section explains how contractors may fulfill their 
obligations through a multiemployer plan or through other funds, plans, 
or programs (29 CFR 13.8).
    9. Enforcement (FAR 22.2109). This section provides information on 
enforcement authority, filing complaints, reporting and investigating 
complaints, remedies and sanctions, and retroactive inclusion of the 
contract clause when an agency fails to include the clause in a 
contract to which E.O. 13706 applies (29 CFR 13.11, 13.41, and 13.44).
    10. Clause prescription (FAR 22.2110). The prescription for use of 
the clause at FAR 52.222-62 is consistent with the applicability 
specified in FAR 22.2103 (29 CFR 13.3). The prescription requires use 
of the clause when a contract includes 52.222-6, Construction Wage Rate 
Requirements, ($2,000 threshold), or 52.222-41, Service Contract Labor 
Standards, ($2,500 threshold) and performance is in whole or in part in 
the United States.

B. FAR Clause 52.222-62 Paid Sick Leave Under Executive Order 13706

    FAR clause 52.222-62 is substantially based on, and accomplishes 
the same purposes as, the clause provided in the DOL regulations at 
appendix A to 29 CFR part 13--Contract Clause, which is required for 
use in contracts, contract-like instruments, and solicitations to which 
E.O. 13706 applies, except for procurements subject to the FAR. For 
contracts subject to the FAR, the clause at FAR 52.222-62 must be used.
     In FAR 52.222-62(a), all definitions are based on 29 CFR 
13.2. The definitions for ``employee,'' ``multiemployer plan,'' and 
``paid sick leave'' are the same as at 22.2101. The definition of 
``United States'' (i.e., the 50 States and the District of Columbia) is 
also included in full text in the clause, for clarity. Definitions for 
``child,'' ``domestic partner,'' ``domestic violence,'' ``individual 
related by blood or affinity whose close association with the employee 
is the equivalent of a family relationship,'' ``parent,'' ``sexual 
assault,'' ``spouse,'' and ``stalking'' are incorporated by reference 
from 29 CFR 13.2.
     In FAR 52.222-62(b), the statement is added that, if the 
contract is not performed wholly within the United States the clause 
applies only with respect to that part of the contract that is 
performed within the United States (29 CFR 13.3(c)).
     In FAR 52.222-62(f), the term ``contract suspension'' in 
the heading is changed to ``payment suspension,'' to be consistent with 
the text of the paragraph.
     Paragraph (h) in the DOL clause, which addresses flowdown 
to subcontracts, is revised slightly and moved to be the last paragraph 
of FAR 52.222-62, consistent with FAR drafting conventions. The 
requirement to include the substance of the clause allows only for 
ministerial changes to the clause. The substance of the clause will be 
consistent with the requirements of the clause, and will not permit 
substantive changes such as to the rights and responsibilities of the 
parties.
     Paragraph (i) of the DOL clause, ``Certification of 
Eligibility'' is not included in the FAR clause 52.222-62. This 
paragraph duplicates coverage in paragraph (p) of FAR clause 52.222-41, 
Service Contract Labor Standards, for service and 52.222-15, 
Certification of Eligibility, for construction contracts. 41 U.S.C. 
1304 discourages adding certifications to the FAR.
     Paragraph (k) of the DOL clause, Waiver, is not included 
in the FAR clause 52.222-62, although it is included at FAR 22.2107. 
The FAR clause requirements become contract requirements, which 
likewise cannot be waived, thus separate inclusion is unnecessary.

C. Conforming Changes

    1. References to the Office of Management and Budget (OMB) 
clearances for the information collection requirements on the DOL final 
rule are added at FAR 1.106. The FAR rule does not add any burdens 
beyond those already approved by the Office of Information and 
Regulatory Affairs in OMB in connection with the DOL final rule on Paid 
Sick Leave.
    2. FAR 11.500, Scope, in FAR subpart 11.5, Liquidated Damages, is 
modified to exclude application to liquidated damages related to paid 
sick leave for Federal contractors (FAR subpart 22.21).
    3. FAR 22.403-4, Department of Labor regulations involving 
construction, is moved to the end of the section, renumbered as 22.403-
6, and updated with references to parts 10 and 13, which implement 
E.O.s 13658 and 13706. New sections 22.403-5 and 22.1002-6 are added, 
citing E.O. 13706 and referencing the new paid sick leave subpart and 
clause.
    4. The FAR clause at 52.212-5, Contract Terms and Conditions 
Required to Implement Statutes or Executive Orders--Commercial Items, 
is revised to include 52.222-62, Paid Sick Leave Under Executive Order 
13706.
    5. The FAR clause at 52.213-4, Terms and Conditions--Simplified 
Acquisitions (Other than Commercial Items), is revised to include 
52.222-62, Paid Sick Leave Under Executive Order 13706.
    6. The FAR clause at 52.244-6, Subcontracts for Commercial Items, 
is revised to address flowdown in clause

[[Page 91629]]

52.222-55, Minimum Wages under Executive Order 13658, and to include 
52.222-62, Paid Sick Leave Under Executive Order 13706.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold (SAT) and for Commercial Items, Including Commercially 
Available Off-the-Shelf (COTS) Items

    This rule implements E.O. 13706, which does not exempt contracts at 
or below the SAT or contracts for the acquisition of commercial items. 
The rule applies to contracts that are covered by the Service Contract 
Labor Standards statute or the Wage Rate Requirements (Construction) 
statute, and meet or exceed the thresholds specified in those statutes. 
However, since these statutes do not apply to contracts for acquisition 
of supplies, the rule does not cover acquisitions of COTS items.

IV. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is a significant regulatory action and, therefore, was subject to 
review under Section 6(b) of E.O. 12866, Regulatory Planning and 
Review, dated September 30, 1993. This rule is not a major rule under 5 
U.S.C. 804.
    E.O. 13706, Establishing Paid Sick Leave for Federal Contractors, 
directed the Department of Labor (DOL) and the FAR Council to 
sequentially issue implementing regulations. In the preamble of its 
final rule (81 FR 67598, September 30, 2016), DOL's Wage and Hour 
Division published a regulatory impact analysis that included estimates 
of some major impacts, including transfers and compliance costs, 
associated with the overall implementation of the E.O. The DOL 
quantitative estimates are summarized in Table A.

         Table A--E.O.-Wide Affected Employees and Selected Categories of Regulatory Costs and Transfers
                                                   [Millions]
----------------------------------------------------------------------------------------------------------------
                                                                                         Annualized   Annualized
                                              Year 1     Year 2     Year 5    Year 10       (3%)         (7%)
----------------------------------------------------------------------------------------------------------------
Affected employees........................       0.22       0.45       1.15       1.20  ...........  ...........
Direct employer costs, including                 $125        $11        $17        $11          $25          $27
 regulatory familiarization,
 administration, and initial and recurring
 implementation...........................
Transfers from employers to employees.....         86        176        457        497          364          350
----------------------------------------------------------------------------------------------------------------

    Due to these impacts, the Office of Management and Budget 
designated the DOL rule as economically significant and major. Because 
we determine that the effects of the completed DOL rule are part of the 
baseline for the FAR's implementing rule at issue here, the incremental 
effects of this FAR rule itself are not economically significant. More 
information on the source of these impacts estimates are discussed 
below.
    For FAR-based contracts, the E.O.'s paid sick leave requirements 
apply ``to covered contracts where the solicitation for such contract 
has been issued, or the contract has been awarded outside the 
solicitation process, on or after . . . January 1, 2017, consistent 
with the effective date for the action taken by the Federal Acquisition 
Regulatory Council.''
    Of the entities with employees potentially affected by the E.O., 
DOL estimated that 91,878 are prime contractors (with contracts subject 
to the FAR and listed at USASpending.gov) and 24,352 are 
subcontractors. DOL assumed that regulatory familiarization and initial 
implementation costs are to be incurred per contractor, with per-
contractor labor costs as shown in DOL Table 9. As noted in DOL's 
analysis, it is necessary to capture regulatory familiarization and 
implementation costs incurred by entities that do not yet hold federal 
contracts but will be awarded contracts in the future. As regards FAR-
based contracts, these costs are attributable to this interim final 
rule; however, the associated entities are omitted from the entity-
count estimates derived from USASpending.gov, thus contributing to a 
tendency toward underestimation in the cost totals.
    DOL assumes that recurring implementation and administration costs, 
along with transfers from employers to employees, are a function of the 
number of affected employees. DOL's Table 3 shows industry-specific 
estimates of total affected employees and of affected employees working 
on Federal contracts (as opposed to working for entities operating on 
federal property). The contract-work percentages derived from Table 3 
are applied to the employee estimates in DOL Table 8, yielding an 
estimate that the FAR rule's recurring implementation and 
administration costs are 84 percent of the E.O.-wide costs in those 
categories, and to the transfer estimates in DOL Table 13, yielding an 
estimate that the FAR rule's transfer impacts are 86 percent of the 
E.O.-wide transfer impacts. DOL estimates that the effects grow over 
time according to the pattern shown in DOL Tables 8, 11, and 14.

V. Regulatory Flexibility Act

    The DOL final rule included a Regulatory Flexibility Analysis, 
which concluded that the DOL rule will not have a significant impact on 
a substantial number of small entities within the meaning of the 
Regulatory Flexibility Act, 5 U.S.C. 601, et seq. DoD, GSA, and NASA 
have prepared an Initial Regulatory Flexibility Analysis (IRFA) of the 
FAR rule, which is summarized as follows:

    This rule is necessary to implement Executive Order (E.O.) 
13706, Establishing Paid Sick Leave for Federal Contractors, dated 
September 7, 2015, and associated Department of Labor (DOL) 
regulatory requirements at 29 CFR part 13.
    The objective of this rule is to allow employees under covered 
contracts to accrue and use paid sick leave in accordance with E.O. 
13706 and 29 CFR part 13.
    This rule applies to contracts and subcontracts at all tiers 
covered by the Service Contract Labor Standards statute, or the Wage 
Rate Requirements (Construction) statute, which require performance 
in whole or in part within the United States. For procurement 
contracts where employees' wages are governed by the Fair Labor 
Standards Act, this rule applies when the contract exceeds the 
micro-purchase threshold, as defined in FAR 2.101. When performance 
is in part within and in part outside the United States, the rule 
applies to the part of the contract or subcontract performed within 
the United States. Data available through the Federal Procurement

[[Page 91630]]

Data System (FPDS) for Fiscal Year 2015, reveals contracts were 
awarded to 18,874 unique small business vendors for services, which 
contained the FAR clause at 52.222-41, Service Contract Labor 
Standards. Additionally, contracts were awarded to 6,753 unique 
small business vendors for construction, which contained the FAR 
clause at 52.222-6, Construction Wage Rate Requirements, for a total 
of 25,627 unique small businesses.
    The DOL final rule identifies records to be kept by all firms, 
including small entities (29 CFR 13.25). Some records are already 
required under the Fair Labor Standards Act, Service Contract Labor 
Standards statute, the Wage Rate Requirements (Construction) 
statute, and their governing regulations. DOL noted in their final 
rule (81 FR 67598 at 67669) that OMB has assigned control number 
1235-0029 for the new recordkeeping requirements related to paid 
sick leave. The information collection requirement under 1235-0029 
includes recordkeeping and regulatory familiarization.
    Regarding initial implementation, DOL assumed firms that need to 
create a sick leave policy will each spend 10 hours of time 
developing this policy, regardless of the number of employees, and 
firms with a program in place will spend one hour, regardless of the 
number of employees. DOL also stated in its final rule that 
``Transfers from small contractors and costs to small contractors in 
Year 1 are less than 0.02 percent of revenues on average and are no 
more than 0.17 percent in any industry''. Therefore, DOL believes 
its final rule will not have a significant impact on small 
businesses. The rule does not duplicate, overlap, or conflict with 
any other Federal rules.
    There are no known significant alternatives to the rule that 
would meet the requirements of the E.O. and DOL regulation and 
minimize any significant economic impact of the rule on small 
entities. In its final rule, DOL introduced several changes and 
clarifications that may ease the compliance burden. For instance, 
DOL provided greater detail and clarity about how companies with 
paid time off policies can use those policies to satisfy their 
obligations under the E.O. In addition, if a collective bargaining 
agreement (CBA) ratified before September 30, 2016, applies to an 
employee's work performed on or in connection with a covered 
contract and provides at least 56 hours of paid sick time each year, 
the employee will be exempted from the requirements of the E.O. and 
29 CFR part 13 until CBA termination or January 1, 2020, whichever 
is earlier.
    The rule was also modified to allow employers to meet the 
requirements of this rule through multiemployer plans or other 
funds, plans, or programs. This may ease the burden for those 
employers in industries with transitory or mobile workforces.

    The Regulatory Secretariat Division has submitted a copy of the 
IRFA to the Chief Counsel for Advocacy of the Small Business 
Administration. A copy of the IRFA may be obtained from the Regulatory 
Secretariat Division. DoD, GSA and NASA invite comments from small 
business concerns and other interested parties on the expected impact 
of this rule on small entities.
    DoD, GSA, and NASA will also consider comments from small entities 
concerning the existing regulations in subparts affected by the rule in 
accordance with 5 U.S.C. 610. Interested parties must submit such 
comments separately and should cite 5 U.S.C. 610 (FAR Case 2017-001), 
in correspondence.

VI. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. Chapter 35) does apply; 
however, these changes to the FAR do not impose additional information 
collection requirements to the paperwork burden previously approved for 
the DOL regulations under OMB Control Numbers 1235-0018, Records to be 
kept by Employers--Fair Labor Standards Act, and 1235-0021, Employment 
Information Form. OMB assigned control number 1235-0029 for the new 
recordkeeping requirements related to paid sick leave, Government 
Contractor Paid Sick Leave (see 81 FR 67669).

VII. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense (DoD), the Administrator of General Services (GSA), and the 
Administrator of the National Aeronautics and Space Administration 
(NASA) that urgent and compelling reasons exist to promulgate this 
interim rule without prior opportunity for public comment. Section 7 of 
Executive Order (E.O.) 13706 entitled ``Establishing Paid Sick Leave 
for Federal Contractors'' requires that the order shall apply to 
covered contracts where the solicitation for such contracts has been 
issued on or after January 1, 2017. In addition, section 3 of the order 
directs the FAR Council to issue this regulation after the DOL issues 
its own regulations implementing the order. The DOL issued those 
regulations on September 30, 2016. Thus, it is necessary to publish an 
interim FAR rule in order to meet the specified applicability date of 
January 1, 2017.
    However, pursuant to 41 U.S.C. 1707 and FAR 1.501-3(b), DoD, GSA, 
and NASA will consider public comments received in response to this 
interim rule in the formation of the final rule.

List of Subjects in 48 CFR Parts 1, 11, 22, and 52

    Government procurement.

    Dated: December 9, 2016.
William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of 
Acquisition Policy, Office of Government-wide Policy.
    Therefore, DoD, GSA, and NASA are amending 48 CFR parts 1, 11, 22, 
and 52 as set forth below:

0
1. The authority citation for 48 CFR parts 1, 11, 22, and 52 continues 
to read as follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 
U.S.C. 20113.

PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM


1.106   [Amended]

0
2. Amend section 1.106 by adding to the table, in numerical sequence, 
FAR segment ``52.222-62'' and its corresponding OMB Control No. ``1235-
0018, 1235-0021, 1235-0029''.

PART 11--DESCRIBING AGENCY NEEDS

0
3. Revise section 11.500 to read as follows:


11.500   Scope.

    (a) This subpart prescribes policies and procedures for using 
liquidated damages clauses in solicitations and contracts for supplies, 
services, research and development, and construction.
    (b) This subpart does not apply to liquidated damages--
    (1) For subcontracting plans (see 19.705-7);
    (2) Related to the Contract Work Hours and Safety Standards statute 
(see subpart 22.3); or
    (3) Related to paid sick leave for Federal contractors (see subpart 
22.21).

PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

0
4. Amend section 22.403 by revising the section heading to read as 
follows:


22.403   Statutory, Executive order, and regulatory requirements.


22.403-4   [Removed]

0
5. Remove section 22.403-4.


22.403-5   [Redesignated as section 22.403-4]

0
6. Redesignate section 22.403-5 as section 22.403-4.

0
7. Add a new section 22.403-5 to read as follows:


22.403-5   Executive Order 13706.

    Executive Order 13706 establishes paid sick leave for employees of 
certain Federal contractors. See subpart 22.21

[[Page 91631]]

and the clause at 52.222-62, Paid Sick Leave under Executive Order 
13706.

0
8. Add section 22.403-6 to read as follows:


22.403-6   Department of Labor regulations involving construction.

    (a) Under the statutes and Executive orders referred to in 22.403 
and Reorganization Plan No. 14 of 1950 (3 CFR 1949-53 Comp., p. 1007), 
the Secretary of Labor has issued regulations in title 29, subtitle A, 
Code of Federal Regulations, prescribing standards and procedures to be 
observed by the Department of Labor and the Federal contracting 
agencies. Those standards and procedures applicable to contracts 
involving construction are implemented in this subpart.
    (b) The Department of Labor regulations include--
    (1) Part 1, relating to Construction Wage Rate Requirements statute 
minimum wage rates;
    (2) Part 3, relating to the Copeland (Anti-Kickback) Act and 
requirements for submission of weekly statements of compliance and the 
preservation and inspection of weekly payroll records;
    (3) Part 5, relating to enforcement of the--
    (i) Construction Wage Rate Requirements statute;
    (ii) Contract Work Hours and Safety Standards statute; and
    (iii) Copeland (Anti-Kickback) Act;
    (4) Part 6, relating to rules of practice for appealing the 
findings of the Administrator, Wage and Hour Division, in enforcement 
cases under the various labor statutes, and by which Administrative Law 
Judge hearings are held;
    (5) Part 7, relating to rules of practice by which contractors and 
other interested parties may appeal to the Department of Labor 
Administrative Review Board, decisions issued by the Administrator, 
Wage and Hour Division, or administrative law judges under the various 
labor statutes;
    (6) Part 10, relating to establishing a minimum wage for Federal 
contractors; and
    (7) Part 13, relating to establishing paid sick leave for Federal 
contractors.
    (c) Refer all questions relating to the application and 
interpretation of wage determinations (including the classifications 
therein) and the interpretation of the Department of Labor regulations 
in this subsection to the Administrator, Wage and Hour Division.

0
9. Amend section 22.1002 by revising the section heading to read as 
follows:


22.1002   Statutory and Executive order requirements.

0
10. Add section 22.1002-6 to read as follows:


22.1002-6   Executive Order 13706.

    Executive Order 13706 establishes paid sick leave for employees of 
certain Federal contractors. See subpart 22.21 and the clause at 
52.222-62, Paid Sick Leave under Executive Order 13706.

0
11. Add subpart 22.21 to read as follows:
Subpart 22.21--Establishing Paid Sick Leave for Federal Contractors
Sec.
22.2100 Scope of subpart.
22.2101 Definitions.
22.2102 Policy.
22.2103 Applicability.
22.2104 Exclusions.
22.2105 Paid sick leave for Federal contractors and subcontractors.
22.2106 Prohibited acts.
22.2107 Waiver of rights.
22.2108 Multiemployer plans or other funds, plans, or programs.
22.2109 Enforcement of Executive Order 13706 paid sick leave 
requirements.
22.2110 Contract clause.

Subpart 22.21--Establishing Paid Sick Leave for Federal Contractors


22.2100   Scope of subpart.

    This subpart prescribes policies and procedures to implement E.O. 
13706, Establishing Paid Sick Leave for Federal Contractors, dated 
September 7, 2015, and Department of Labor implementing regulations at 
29 CFR part 13.


22.2101   Definitions.

    As used in this subpart (in accordance with 29 CFR 13.2)--
    Accrual year means the 12-month period during which a contractor 
may limit an employee's accrual of paid sick leave to no less than 56 
hours (see 29 CFR 13.5(b)(1)).
    Certification issued by a health care provider has the meaning 
given in 29 CFR 13.2.
    Employee--
    (1)(i) Means any person engaged in performing work on or in 
connection with a contract covered by E.O. 13706; and
    (A) Whose wages under such contract are governed by the Service 
Contract Labor Standards statute (41 U.S.C. chapter 67), the Wage Rate 
Requirements (Construction) statute (40 U.S.C. chapter 31, subchapter 
IV), or the Fair Labor Standards Act (29 U.S.C. chapter 8);
    (B) Including employees who qualify for an exemption from the Fair 
Labor Standards Act's minimum wage and overtime provisions; and
    (C) Regardless of the contractual relationship alleged to exist 
between the individual and the employer; and
    (ii) Includes any person performing work on or in connection with 
the contract and individually registered in a bona fide apprenticeship 
or training program registered with the Department of Labor's 
Employment and Training Administration, Office of Apprenticeship, or 
with a State Apprenticeship Agency recognized by the Office of 
Apprenticeship.
    (2)(i) An employee performs on a contract if the employee directly 
performs the specific services called for by the contract; and
    (ii) An employee performs in connection with a contract if the 
employee's work activities are necessary to the performance of a 
contract but are not the specific services called for by the contract.
    Health care provider has the meaning given in 29 CFR 13.2.
    Multiemployer plan means a plan to which more than one employer is 
required to contribute and which is maintained pursuant to one or more 
collective bargaining agreements between one or more employee 
organizations and more than one employer.
    Paid sick leave means compensated absence from employment that is 
required by E.O. 13706 and 29 CFR part 13.


22.2102   Policy.

    (a) The Government shall require contractors to allow employees 
performing work on or in connection with a contract covered by E.O. 
13706 to accrue and use paid sick leave in accordance with the E.O. and 
29 CFR part 13.
    (b) Interaction with other laws. Nothing in E.O. 13706 or 29 CFR 
part 13 shall excuse noncompliance with or supersede any applicable 
Federal or State law, any applicable law or municipal ordinance, or a 
collective bargaining agreement requiring greater paid sick leave or 
leave rights than those established under E.O. 13706 and 29 CFR part 
13. For additional details regarding interaction with the Service 
Contract Labor Standards statute, the Wage Rate Requirements 
(Construction) statute, the Family and Medical Leave Act, and State and 
local paid sick time laws, see 29 CFR 13.5(f)(2) through (4).
    (c) Interaction with paid time off policies. In accordance with 29 
CFR 13.5(f)(5)(i), the paid sick leave requirements of E.O. 13706 and 
29 CFR part 13 may be satisfied by a contractor's voluntary paid time 
off policy, whether provided pursuant to a

[[Page 91632]]

collective bargaining agreement or otherwise, where the voluntary paid 
time off policy meets or exceeds the requirements. For additional 
details regarding paid time off policies, see 29 CFR 13.5(f)(5)(ii) and 
(iii).
    (d) Unless otherwise provided in this subpart, compliance is the 
responsibility of the contractor, and enforcement is the responsibility 
of the Department of Labor.


22.2103   Applicability.

    This subpart applies to--
    (a) Contracts that--
    (1) Are covered by the Service Contract Labor Standards statute (41 
U.S.C. chapter 67, formerly known as the Service Contract Act, subpart 
22.10), or the Wage Rate Requirements (Construction) statute (40 U.S.C. 
chapter 31, Subchapter IV, formerly known as the Davis-Bacon Act, 
subpart 22.4); and
    (2) Require performance in whole or in part within the United 
States. When performance is in part within and in part outside the 
United States, this subpart applies to the part of the contract that is 
performed within the United States; and
    (b) Employees performing on or in connection with such contracts 
whose wages are governed by the Service Contract Labor Standards 
statute, the Wage Rate Requirements (Construction) statute, or the Fair 
Labor Standards Act, including employees who qualify for an exemption 
from the Fair Labor Standards Act's minimum wage and overtime 
provisions.


22.2104   Exclusions.

    The following are excluded from coverage under this subpart:
    (a) Employees performing in connection with contracts covered by 
the E.O. for less than 20 percent of their work hours in a given 
workweek. This exclusion is inapplicable to employees performing on 
contracts covered by the E.O., i.e., those employees directly engaged 
in performing the specific work called for by the contract, at any 
point during the workweek (see 29 CFR 13.4(e)).
    (b) Until the earlier of the date the agreement terminates or 
January 1, 2020, employees whose covered work is governed by a 
collective bargaining agreement ratified before September 30, 2016, 
that--
    (1) Already provides 56 hours (or 7 days, if the agreement refers 
to days rather than hours) of paid sick time (or paid time off that may 
be used for reasons related to sickness or health care) each year; or
    (2) Provides less than 56 hours (or 7 days, if the agreement refers 
to days rather than hours) of paid sick time (or paid time off that may 
be used for reasons related to sickness or health care) each year, 
provided that each year the contractor provides covered employees with 
the difference between 56 hours (or 7 days) and the amount provided 
under the existing agreement in accordance with 29 CFR 13.4(f).
    (c) The Government's unilateral exercise of a pre-negotiated option 
to renew an existing contract that does not contain the clause at 
52.222-62 will not automatically trigger the application of that 
clause. (See definition of ``new contract'' at 29 CFR 13.2).


22.2105   Paid sick leave for Federal contractors and subcontractors.

    In accordance with 29 CFR 13.5, and by operation of the clause at 
52.222-62, Paid Sick Leave Under Executive Order 13706, the following 
contractor requirements apply:
    (a) Accrual. (1) Contractors are required to permit an employee to 
accrue not less than 1 hour of paid sick leave for every 30 hours 
worked on or in connection with a contract covered by the E.O. (see 29 
CFR 13.5(a)(1)).
    (2) Contractors are required to inform each employee, in writing, 
of the amount of paid sick leave the employee has accrued but not used 
no less than once each pay period or each month, whichever interval is 
shorter, as well as upon a separation from employment and upon 
reinstatement of paid sick leave, pursuant to 29 CFR 13.5(b)(4) (see 29 
CFR 13.5(a)(2)).
    (3) Contractors may choose to provide employees with at least 56 
hours of paid sick leave at the beginning of each accrual year rather 
than allowing the employee to accrue such leave based on hours worked 
over time (see 29 CFR 13.5(a)(3)).
    (b) Maximum accrual, carryover, reinstatement, and payment for 
unused leave. (1) Contractors may limit the amount of paid sick leave 
employees are permitted to accrue to not less than 56 hours in each 
accrual year (see 29 CFR 13.5(b)(1)).
    (2) Paid sick leave shall carry over from one accrual year to the 
next. Paid sick leave carried over from the previous accrual year shall 
not count toward any limit the contractor sets on annual accrual (see 
29 CFR 13.5(b)(2)).
    (3) Contractors may limit the amount of paid sick leave an employee 
is permitted to have available for use at any point to not less than 56 
hours (see 29 CFR 13.5(b)(3)).
    (4) Contractors are required to reinstate paid sick leave for 
employees only when rehired by the same contractor within 12 months 
after a job separation (see 29 CFR 13.5(b)(4)).
    (5) Nothing in E.O. 13706 or 29 CFR part 13 requires contractors to 
make a financial payment to an employee for accrued paid sick leave 
that has not been used upon a separation from employment. If a 
contractor nevertheless makes such a payment in an amount equal to or 
greater than the value of the pay and benefits the employee would have 
received pursuant to 29 CFR 13.5(c)(3) had the employee used the paid 
sick leave, the contractor is relieved of the obligation to reinstate 
an employee's accrued paid sick leave upon rehiring the employee within 
12 months of the separation pursuant to 29 CFR 13.5(b)(4) (see 29 CFR 
13.5(b)(5)).
    (c) Use. Contractors are required to permit an employee to use paid 
sick leave in accordance with 29 CFR 13.5(c).
    (d) Request for paid sick leave. Contractors are required to permit 
an employee to use any or all of the employee's available paid sick 
leave upon the oral or written request of an employee that includes 
information sufficient to inform the contractor that the employee is 
seeking to be absent from work for a purpose described in 29 CFR 
13.5(c) and, to the extent reasonably feasible, the anticipated 
duration of the leave (see 29 CFR 13.5(d)).
    (e) Certification or documentation for leave of 3 or more 
consecutive full workdays. Contractors may require certification issued 
by a health care provider to verify the need for paid sick leave used 
for a purpose described in 29 CFR 13.5(c)(1)(i), (ii), or (iii), or 
documentation from an appropriate individual or organization to verify 
the need for paid sick leave used for a purpose described in 29 CFR 
13.5(c)(1)(iv), only if the employee is absent for 3 or more 
consecutive full workdays (see 29 CFR 13.5(e)).


22.2106   Prohibited acts.

    In accordance with 29 CFR 13.6, and by operation of the clause at 
52.222-62, Paid Sick Leave Under Executive Order 13706, a contractor 
may not--
    (a) Interfere with an employee's accrual or use of paid sick leave 
as required by E.O. 13706 or 29 CFR part 13 (see 29 CFR 13.6(a));
    (b) Discharge or in any other manner discriminate against any 
employee for--
    (1) Using, or attempting to use, paid sick leave as provided for 
under E.O. 13706 and 29 CFR part 13;
    (2) Filing any complaint, initiating any proceeding, or otherwise 
asserting any right or claim under E.O. 13706 or 29 CFR part 13;

[[Page 91633]]

    (3) Cooperating in any investigation or testifying in any 
proceeding under E.O. 13706 or 29 CFR part 13; or
    (4) Informing any other person about his or her rights under E.O. 
13706 or 29 CFR part 13 (see 29 CFR 13.6(b)); or
    (c) Fail to make and maintain or to make available to authorized 
representatives of the Wage and Hour Division records for inspection, 
copying, and transcription as required by 29 CFR 13.25, or otherwise 
fail to comply with the requirements of 29 CFR 13.25 (see 29 CFR 
13.6(c)).


22.2107   Waiver of rights.

    Employees cannot waive, nor may contractors induce employees to 
waive, their rights under E.O. 13706 or 29 CFR part 13 (see 29 CFR 
13.7).


22.2108   Multiemployer plans or other funds, plans, or programs.

    Contractors may fulfill their obligations under E.O. 13706 and 29 
CFR part 13 jointly with other contractors through a multiemployer 
plan, or may fulfill their obligations through an individual fund, 
plan, or program (see 29 CFR 13.8).


22.2109   Enforcement of Executive Order 13706 paid sick leave 
requirements.

    (a) Authority. Section 4 of the E.O. grants to the Secretary of 
Labor the authority for investigating potential violations of, and 
obtaining compliance with, the E.O. The Secretary of Labor, in 
promulgating the implementing regulations required by section 3 of the 
E.O., has assigned this authority to the Administrator of the Wage and 
Hour Division. Contracting agencies do not have authority to conduct 
compliance investigations under 29 CFR part 13 as implemented in this 
subpart. This does not limit the contracting officer's authority to 
otherwise enforce the terms and conditions of the contract.
    (b) Complaints. (1) Complaints are filed with the Administrator of 
the Wage and Hour Division and may be brought by any person (including 
the employee), entity, or organization that believes a violation of 
this subpart has occurred.
    (2) The identity of any individual who makes a written or oral 
statement as a complaint or in the course of an investigation, as well 
as portions of the statement which would reveal the individual's 
identity, shall not be disclosed in any manner to anyone other than 
Federal officials without the prior consent of the individual, unless 
otherwise authorized by law.
    (3) If the contracting agency receives a complaint or is notified 
that the Administrator of the Wage and Hour Division has received a 
complaint, the contracting officer shall report, within 14 days, to the 
Department of Labor, Wage and Hour Division, Office of Government 
Contracts, 200 Constitution Avenue NW., Room S3006, Washington, DC 
20210, all of the following information that is available without 
conducting an investigation:
    (i) The complaint or description of the alleged violation.
    (ii) Available statements by the employee, contractor, or any other 
person regarding the alleged violation.
    (iii) Evidence that clause 52.222-62, Paid Sick Leave Under 
Executive Order 13706, was included in the contract.
    (iv) Information concerning known settlement negotiations between 
the parties, if applicable.
    (v) Any other relevant facts known to the contracting officer or 
other information requested by the Wage and Hour Division.
    (c) Investigations. Complaints will be investigated by the 
Administrator of the Wage and Hour Division, if warranted, in 
accordance with the procedures in 29 CFR 13.43.
    (d) Remedies and sanctions--(1) Withholding or suspending payment. 
The contracting officer shall, upon his or her own action or upon 
written request of the Administrator of the Wage and Hour Division--
    (i)(A) Withhold or cause to be withheld from the contractor under 
the contract covered by the E.O. or any other Federal contract with the 
same contractor, so much of the accrued payments or advances as may be 
considered necessary to pay employees the full amount owed to 
compensate for any violation of E.O. 13706 or 29 CFR part 13; and
    (B) In the event of any such violation, the contracting agency may, 
after authorization or by direction of the Administrator of the Wage 
and Hour Division and written notification to the contractor, take 
action to cause suspension of any further payment, advance, or 
guarantee of funds until such violations have ceased; or
    (ii) Take action to cause suspension of any further payment, 
advance, or guarantee of funds to a contractor that has failed to make 
available for inspection, copying, and transcription any of the records 
identified in 29 CFR 13.25.
    (2) Civil actions to recover greater underpayments than those 
withheld. (i) If the payments withheld under 29 CFR 13.11(c) are 
insufficient to reimburse all monetary relief due, or if there are no 
payments to withhold, the Department of Labor, following a final order 
of the Secretary of Labor, may bring an action against the contractor 
in any court of competent jurisdiction to recover the remaining amount.
    (ii) The Department of Labor shall, to the extent possible, pay any 
sums it recovers in this manner directly to the employees who suffered 
the violation(s) of 29 CFR 13.6(a) or (b).
    (iii) Any sum not paid to an employee because of inability to do so 
within 3 years shall be transferred into the Treasury of the United 
States as miscellaneous receipts.
    (3) Termination. Contracting officers may consider the failure of a 
contractor to comply with the requirements of E.O. 13706 or 29 CFR part 
13 as grounds for termination for default or cause.
    (4) Debarment. (i) The Department of Labor may initiate debarment 
proceedings under 29 CFR 13.44(d) and 29 CFR 13.52 whenever a 
contractor is found to have disregarded its obligations under E.O. 
13706 or 29 CFR part 13.
    (ii) Contracting officers shall consider notifying the agency 
suspending and debarring official in accordance with agency procedures 
when a contractor commits significant violations of contract terms and 
conditions related to this subpart (see subpart 9.4).
    (5) Remedies for interference. (i) When the Administrator of the 
Wage and Hour Division determines that a contractor has interfered with 
an employee's accrual or use of paid sick leave in violation of 29 CFR 
13.6(a), the Administrator of the Wage and Hour Division will notify 
the contractor and the relevant contracting agency of the interference 
and request that the contractor remedy the violation.
    (ii) If the contractor does not remedy the violation, the 
Administrator of the Wage and Hour Division shall direct the contractor 
to provide any appropriate relief to the affected employee(s) in the 
investigative findings letter issued pursuant to 29 CFR 13.51. Such 
relief may include--
    (A) Any pay and/or benefits denied or lost by reason of the 
violation;
    (B) Other actual monetary losses sustained as a direct result of 
the violation; or
    (C) Appropriate equitable or other relief.
    (iii) Payment of liquidated damages in an amount equaling any 
monetary relief may also be directed unless such amount is reduced by 
the Administrator of the Wage and Hour Division because the violation 
was in good faith and the contractor had reasonable grounds for 
believing it had not violated the E.O. or 29 CFR part 13.
    (iv) The Administrator of the Wage and Hour Division may 
additionally direct that payments due on the contract

[[Page 91634]]

or any other contract between the contractor and the Federal Government 
be withheld as may be necessary to provide any appropriate monetary 
relief. Upon the final order of the Secretary of Labor that monetary 
relief is due, the Administrator of the Wage and Hour Division may 
direct the relevant contracting agency to transfer the withheld funds 
to the Department of Labor for disbursement.
    (6) Remedies for discrimination. (i) When the Administrator of the 
Wage and Hour Division determines that a contractor has discriminated 
against an employee in violation of 29 CFR 13.6(b), the Administrator 
of the Wage and Hour Division will notify the contractor and the 
relevant contracting agency of the discrimination and request that the 
contractor remedy the violation.
    (ii) If the contractor does not remedy the violation, the 
Administrator of the Wage and Hour Division shall direct the contractor 
to provide appropriate relief to the affected employee(s) in the 
investigative findings letter issued pursuant to 29 CFR 13.51. Such 
relief may include, but is not limited to--
    (A) Employment;
    (B) Reinstatement;
    (C) Promotion; and
    (D) Restoration of leave, or lost pay and/or benefits.
    (iii) Payment of liquidated damages in an amount equaling any 
monetary relief may also be directed unless such amount is reduced by 
the Administrator of the Wage and Hour Division because the violation 
was in good faith and the contractor had reasonable grounds for 
believing the contractor had not violated the E.O. or 29 CFR part 13.
    (iv) The Administrator of the Wage and Hour Division may 
additionally direct that payments due on the contract or any other 
contract between the contractor and the Federal Government be withheld 
as may be necessary to provide any appropriate monetary relief. Upon 
the final order of the Secretary of Labor that monetary relief is due, 
the Administrator of the Wage and Hour Division may direct the relevant 
contracting agency to transfer the withheld funds to the Department of 
Labor for disbursement.
    (7) Recordkeeping. When a contractor fails to make, maintain, or 
protect records; or produce records when requested by authorized 
representatives of the Administrator of the Wage and Hour Division, or 
otherwise comply with the requirements of 29 CFR 13.25 in violation of 
29 CFR 13.6(c), the Administrator of the Wage and Hour Division will 
request that the contractor remedy the violation. If the contractor 
fails to produce required records upon request, the contracting officer 
shall, upon his or her own action or upon direction of an authorized 
representative of the Department of Labor, take such action as may be 
necessary to cause suspension of any further payment, advance, or 
guarantee of funds on the contract until such time as the violations 
are discontinued.
    (e) Inclusion of contract clause. If a contracting agency fails to 
include the clause at FAR 52.222-62 in a contract to which the E.O. 
applies, the contracting officer, on his or her own initiative or 
within 15 days of notification by an authorized representative of the 
Department of Labor, shall incorporate the contract clause in the 
contract retroactive to commencement of performance under the contract 
through the exercise of any and all authority that may be needed 
(including, where necessary, its authority to negotiate or amend, its 
authority to pay any necessary additional costs, and its authority 
under any contract provision authorizing changes, cancellation, and 
termination).


22.2110   Contract clause.

    Insert the clause at 52.222-62, Paid Sick Leave Under Executive 
Order 13706, in solicitations and contracts that include the clause at 
52.222-6, Construction Wage Rate Requirements, or 52.222-41, Service 
Contract Labor Standards, where work is to be performed, in whole or in 
part, in the United States (the 50 States and the District of 
Columbia).

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
12. Amend section 52.212-5 by--
0
a. Revising the date of the clause;
0
 b. Redesignating paragraphs (c)(9) and (10) as paragraphs (c)(10) and 
(11), respectively;
0
 c. Adding a new paragraph (c)(9);
0
 d. Redesignating paragraphs (e)(1)(xviii) through (xx) as paragraphs 
(e)(1)(xix) through (xxi), respectively;
0
e. Adding a new paragraph (e)(1)(xviii); and
0
f. In Alternate II:
0
i. Revising the date of the alternate;
0
ii. Redesignating paragraphs (e)(1)(ii)(R) and (S) as paragraphs 
(e)(1)(ii)(S) and (T), respectively; and
0
iii. Adding a new paragraph (e)(1)(ii)(R).
    The revisions and additions read as follows:


52.212-5   Contract Terms and Conditions Required to Implement Statutes 
or Executive Orders--Commercial Items.

* * * * *

Contract Terms and Conditions Required To Implement Statutes or 
Executive Orders--Commercial Items (JAN 2017)

* * * * *
    (c) * * *
    _ (9) 52.222-62, Paid Sick Leave Under Executive Order 13706 (JAN 
2017) (E.O. 13706).
* * * * *
    (e)(1) * * *
    (xviii) 52.222-62 Paid Sick Leave Under Executive Order 13706 (JAN 
2017) (E.O. 13706).
* * * * *
    Alternate II (JAN 2017). * * *
* * * * *
    (e)(1) * * *
    (ii) * * *
    (R) 52.222-62 Paid Sick Leave Under Executive Order 13706 (JAN 
2017) (E.O. 13706).
* * * * *

0
13. Amend section 52.213-4 by--
0
 a. Revising the date of the clause and paragraph (a)(2)(viii);
0
 b. Redesignating paragraphs (b)(1)(x) through (xx) as paragraphs 
(b)(1)(xi) through (xxi), respectively; and
0
c. Adding a new paragraph (b)(1)(x).
    The revisions and addition read as follows:


52.213-4  Terms and Conditions--Simplified Acquisitions (Other than 
Commercial Items).

* * * * *

Terms and Conditions--Simplified Acquisitions (Other than Commercial 
Items) (JAN 2017)

    (a) * * *
    (2) * * *
    (viii) 52.244-6, Subcontracts for Commercial Items (JAN 2017).
    (b) * * *
    (1) * * *
    (x) 52.222-62, Paid Sick Leave Under Executive Order 13706 (JAN 
2017) (E.O. 13706) (Applies when 52.222-6 or 52.222-41 are in the 
contract and performance in whole or in part is in the United States 
(the 50 States and the District of Columbia.))
* * * * *

0
14. Add section 52.222-62 to read as follows:


52.222-62   Paid Sick Leave Under Executive Order 13706.

    As prescribed at 22.2110, insert the following clause:

Paid Sick Leave Under Executive Order 13706 (JAN 2017)

    (a) Definitions. As used in this clause (in accordance with 29 
CFR 13.2)--

[[Page 91635]]

    Child, domestic partner, and domestic violence have the meaning 
given in 29 CFR 13.2.
    Employee--(1)(i) Means any person engaged in performing work on 
or in connection with a contract covered by Executive Order (E.O.) 
13706; and
    (A) Whose wages under such contract are governed by the Service 
Contract Labor Standards statute (41 U.S.C. chapter 67), the Wage 
Rate Requirements (Construction) statute (40 U.S.C. chapter 31, 
subchapter IV), or the Fair Labor Standards Act (29 U.S.C. chapter 
8);
    (B) Including employees who qualify for an exemption from the 
Fair Labor Standards Act's minimum wage and overtime provisions;
    (C) Regardless of the contractual relationship alleged to exist 
between the individual and the employer; and
    (ii) Includes any person performing work on or in connection 
with the contract and individually registered in a bona fide 
apprenticeship or training program registered with the Department of 
Labor's Employment and Training Administration, Office of 
Apprenticeship, or with a State Apprenticeship Agency recognized by 
the Office of Apprenticeship.
    (2)(i) An employee performs ``on'' a contract if the employee 
directly performs the specific services called for by the contract; 
and
    (ii) An employee performs ``in connection with'' a contract if 
the employee's work activities are necessary to the performance of a 
contract but are not the specific services called for by the 
contract.
    Individual related by blood or affinity whose close association 
with the employee is the equivalent of a family relationship has the 
meaning given in 29 CFR 13.2.
    Multiemployer plan means a plan to which more than one employer 
is required to contribute and which is maintained pursuant to one or 
more collective bargaining agreements between one or more employee 
organizations and more than one employer.
    Paid sick leave means compensated absence from employment that 
is required by E.O. 13706 and 29 CFR part 13.
    Parent, sexual assault, spouse, and stalking have the meaning 
given in 29 CFR 13.2.
    United States means the 50 States and the District of Columbia.
    (b) Executive Order 13706. (1) This contract is subject to E.O. 
13706 and the regulations issued by the Secretary of Labor in 29 CFR 
part 13 pursuant to the E.O.
    (2) If this contract is not performed wholly within the United 
States, this clause only applies with respect to that part of the 
contract that is performed within the United States.
    (c) Paid sick leave. The Contractor shall--
    (1) Permit each employee engaged in performing work on or in 
connection with this contract to earn not less than 1 hour of paid 
sick leave for every 30 hours worked;
    (2) Allow accrual and use of paid sick leave as required by E.O. 
13706 and 29 CFR part 13;
    (3) Comply with the accrual, use, and other requirements set 
forth in 29 CFR 13.5 and 13.6, which are incorporated by reference 
in this contract;
    (4) Provide paid sick leave to all employees when due free and 
clear and without subsequent deduction (except as otherwise provided 
by 29 CFR 13.24), rebate, or kickback on any account;
    (5) Provide pay and benefits for paid sick leave used no later 
than one pay period following the end of the regular pay period in 
which the paid sick leave was taken; and
    (6) Be responsible for the compliance by any subcontractor with 
the requirements of E.O. 13706, 29 CFR part 13, and this clause.
    (d) Contractors may fulfill their obligations under E.O. 13706 
and 29 CFR part 13 jointly with other contractors through a 
multiemployer plan, or may fulfill their obligations through an 
individual fund, plan, or program (see 29 CFR 13.8).
    (e) Withholding. The Contracting Officer will, upon his or her 
own action or upon written request of an authorized representative 
of the Department of Labor, withhold or cause to be withheld from 
the Contractor under this or any other Federal contract with the 
same Contractor, so much of the accrued payments or advances as may 
be considered necessary to pay employees the full amount owed to 
compensate for any violation of the requirements of E.O. 13706, 29 
CFR part 13, or this clause, including--
    (1) Any pay and/or benefits denied or lost by reason of the 
violation;
    (2) Other actual monetary losses sustained as a direct result of 
the violation; and
    (3) Liquidated damages.
    (f) Payment suspension/contract termination/contractor 
debarment. (1) In the event of a failure to comply with E.O. 13706, 
29 CFR part 13, or this clause, the contracting agency may, on its 
own action or after authorization or by direction of the Department 
of Labor and written notification to the Contractor take action to 
cause suspension of any further payment, advance, or guarantee of 
funds until such violations have ceased.
    (2) Any failure to comply with the requirements of this clause 
may be grounds for termination for default or cause.
    (3) A breach of the contract clause may be grounds for debarment 
as a contractor and subcontractor as provided in 29 CFR 13.52.
    (g) The paid sick leave required by E.O. 13706, 29 CFR part 13, 
and this clause is in addition to the Contractor's obligations under 
the Service Contract Labor Standards statute and Wage Rate 
Requirements (Construction) statute, and the Contractor may not 
receive credit toward its prevailing wage or fringe benefit 
obligations under those Acts for any paid sick leave provided in 
satisfaction of the requirements of E.O. 13706 and 29 CFR part 13.
    (h) Nothing in E.O. 13706 or 29 CFR part 13 shall excuse 
noncompliance with or supersede any applicable Federal or State law, 
any applicable law or municipal ordinance, or a collective 
bargaining agreement requiring greater paid sick leave or leave 
rights than those established under E.O. 13706 and 29 CFR part 13.
    (i) Recordkeeping. (1) The Contractor shall make and maintain, 
for no less than three (3) years from the completion of the work on 
the contract, records containing the following information for each 
employee, which the Contractor shall make available upon request for 
inspection, copying, and transcription by authorized representatives 
of the Administrator of the Wage and Hour Division of the Department 
of Labor:
    (i) Name, address, and social security number of each employee.
    (ii) The employee's occupation(s) or classification(s).
    (iii) The rate or rates of wages paid (including all pay and 
benefits provided).
    (iv) The number of daily and weekly hours worked.
    (v) Any deductions made.
    (vi) The total wages paid (including all pay and benefits 
provided) each pay period.
    (vii) A copy of notifications to employees of the amount of paid 
sick leave the employee has accrued, as required under 29 CFR 
13.5(a)(2).
    (viii) A copy of employees' requests to use paid sick leave, if 
in writing, or, if not in writing, any other records reflecting such 
employee requests.
    (ix) Dates and amounts of paid sick leave taken by employees 
(unless the Contractor's paid time off policy satisfies the 
requirements of E.O. 13706 and 29 CFR part 13 as described in 29 CFR 
13.5(f)(5), leave shall be designated in records as paid sick leave 
pursuant to E.O. 13706).
    (x) A copy of any written responses to employees' requests to 
use paid sick leave, including explanations for any denials of such 
requests, as required under 29 CFR 13.5(d)(3).
    (xi) Any records reflecting the certification and documentation 
the Contractor may require an employee to provide under 29 CFR 
13.5(e), including copies of any certification or documentation 
provided by an employee.
    (xii) Any other records showing any tracking of or calculations 
related to an employee's accrual or use of paid sick leave.
    (xiii) The relevant contract.
    (xiv) The regular pay and benefits provided to an employee for 
each use of paid sick leave.
    (xv) Any financial payment made for unused paid sick leave upon 
a separation from employment intended, pursuant to 29 CFR 
13.5(b)(5), to relieve the Contractor from the obligation to 
reinstate such paid sick leave as otherwise required by 29 CFR 
13.5(b)(4).
    (2)(i) If the Contractor wishes to distinguish between an 
employee's covered and noncovered work, the Contractor shall keep 
records or other proof reflecting such distinctions. Only if the 
Contractor adequately segregates the employee's time will time spent 
on noncovered work be excluded from hours worked counted toward the 
accrual of paid sick leave. Similarly, only if the Contractor 
adequately segregates the employee's time may the Contractor 
properly refuse an employee's request to use paid sick leave on the 
ground that the employee was scheduled to perform noncovered work 
during the time he or she asked to use paid sick leave.
    (ii) If the Contractor estimates covered hours worked by an 
employee who performs work in connection with contracts covered by 
the E.O. pursuant to 29 CFR 13.5(a)(1)(i) or (iii), the Contractor 
shall keep records or

[[Page 91636]]

other proof of the verifiable information on which such estimates 
are reasonably based. Only if the Contractor relies on an estimate 
that is reasonable and based on verifiable information will an 
employee's time spent in connection with noncovered work be excluded 
from hours worked counted toward the accrual of paid sick leave. If 
the Contractor estimates the amount of time an employee spends 
performing in connection with contracts covered by the E.O., the 
Contractor shall permit the employee to use his or her paid sick 
leave during any work time for the Contractor.
    (3) In the event the Contractor is not obligated by the Service 
Contract Labor Standards statute, the Wage Rate Requirements 
(Construction) statute, or the Fair Labor Standards Act to keep 
records of an employee's hours worked, such as because the employee 
is exempt from the Fair Labor Standards Act's minimum wage and 
overtime requirements, and the Contractor chooses to use the 
assumption permitted by 29 CFR 13.5(a)(1)(iii), the Contractor is 
excused from the requirement in paragraph (i)(1)(iv) of this clause 
and 29 CFR 13.25(a)(4) to keep records of the employee's number of 
daily and weekly hours worked.
    (4)(i) Records relating to medical histories or domestic 
violence, sexual assault, or stalking, created for purposes of E.O. 
13706, whether of an employee or an employee's child, parent, 
spouse, domestic partner, or other individual related by blood or 
affinity whose close association with the employee is the equivalent 
of a family relationship, shall be maintained as confidential 
records in separate files/records from the usual personnel files.
    (ii) If the confidentiality requirements of the Genetic 
Information Nondiscrimination Act of 2008 (GINA), section 503 of the 
Rehabilitation Act of 1973, and/or the Americans with Disabilities 
Act (ADA) apply to records or documents created to comply with the 
recordkeeping requirements in this contract clause, the records and 
documents shall also be maintained in compliance with the 
confidentiality requirements of the GINA, section 503 of the 
Rehabilitation Act of 1973, and/or ADA as described in 29 CFR 
1635.9, 41 CFR 60-741.23(d), and 29 CFR 1630.14(c)(1), respectively.
    (iii) The Contractor shall not disclose any documentation used 
to verify the need to use 3 or more consecutive days of paid sick 
leave for the purposes listed in 29 CFR 13.5(c)(1)(iv) (as described 
in 29 CFR 13.5(e)(1)(ii)) and shall maintain confidentiality about 
any domestic abuse, sexual assault, or stalking, unless the employee 
consents or when disclosure is required by law.
    (5) The Contractor shall permit authorized representatives of 
the Wage and Hour Division to conduct interviews with employees at 
the worksite during normal working hours.
    (6) Nothing in this contract clause limits or otherwise modifies 
the Contractor's recordkeeping obligations, if any, under the 
Service Contract Labor Standards statute, the Wage Rate Requirements 
(Construction) statute, the Fair Labor Standards Act, the Family and 
Medical Leave Act, E.O. 13658, their respective implementing 
regulations, or any other applicable law.
    (j) Interference/discrimination. (1) The Contractor shall not in 
any manner interfere with an employee's accrual or use of paid sick 
leave as required by E.O. 13706 or 29 CFR part 13. Interference 
includes, but is not limited to--
    (i) Miscalculating the amount of paid sick leave an employee has 
accrued;
    (ii) Denying or unreasonably delaying a response to a proper 
request to use paid sick leave;
    (iii) Discouraging an employee from using paid sick leave;
    (iv) Reducing an employee's accrued paid sick leave by more than 
the amount of such leave used;
    (v) Transferring an employee to work on contracts not covered by 
the E.O. to prevent the accrual or use of paid sick leave;
    (vi) Disclosing confidential information contained in 
certification or other documentation provided to verify the need to 
use paid sick leave; or
    (vii) Making the use of paid sick leave contingent on the 
employee's finding a replacement worker or the fulfillment of the 
Contractor's operational needs.
    (2) The Contractor shall not discharge or in any other manner 
discriminate against any employee for--
    (i) Using, or attempting to use, paid sick leave as provided for 
under E.O. 13706 and 29 CFR part 13;
    (ii) Filing any complaint, initiating any proceeding, or 
otherwise asserting any right or claim under E.O. 13706 and 29 CFR 
part 13;
    (iii) Cooperating in any investigation or testifying in any 
proceeding under E.O. 13706 and 29 CFR part 13; or
    (iv) Informing any other person about his or her rights under 
E.O. 13706 and 29 CFR part 13.
    (k) Notice. The Contractor shall notify all employees performing 
work on or in connection with a contract covered by the E.O. of the 
paid sick leave requirements of E.O. 13706, 29 CFR part 13, and this 
clause by posting a notice provided by the Department of Labor in a 
prominent and accessible place at the worksite so it may be readily 
seen by employees. Contractors that customarily post notices to 
employees electronically may post the notice electronically, 
provided such electronic posting is displayed prominently on any Web 
site that is maintained by the Contractor, whether external or 
internal, and customarily used for notices to employees about terms 
and conditions of employment.
    (l) Disputes concerning labor standards. Disputes related to the 
application of E.O. 13706 to this contract shall not be subject to 
the general disputes clause of the contract. Such disputes shall be 
resolved in accordance with the procedures of the Department of 
Labor set forth in 29 CFR part 13. Disputes within the meaning of 
this contract clause include disputes between the Contractor (or any 
of its subcontractors) and the contracting agency, the Department of 
Labor, or the employees or their representatives.
    (m) Subcontracts. The Contractor shall insert the substance of 
this clause, including this paragraph (m), in all subcontracts, 
regardless of dollar value, that are subject to the Service Contract 
Labor Standards statute or the Wage Rate Requirements (Construction) 
statute, and are to be performed in whole or in part in the United 
States.


(End of clause)

0
15. Amend section 52.244-6 by--
0
 a. Revising the date of the clause and paragraph (c)(1)(xii);
0
b. Redesignating paragraphs (c)(1)(xv) through (xvii) as paragraphs 
(c)(1)(xvi) through (xviii), respectively; and
0
c. Adding a new paragraph (c)(1)(xv).
    The revisions and addition read as follows:


52.244-6  Subcontracts for Commercial Items.

* * * * *

Subcontracts for Commercial Items (JAN 2017)

* * * * *
    (c)(1) * * *
    (xii) 52.222-55, Minimum Wages under Executive Order 13658 (DEC 
2015), if flowdown is required in accordance with paragraph (k) of 
FAR clause 52.222-55.
* * * * *
    (xv) 52.222-62, Paid Sick Leave Under Executive Order 13706 (JAN 
2017) (E.O. 13706), if flowdown is required in accordance with 
paragraph (m) of FAR clause 52.222-62.
* * * * *

[FR Doc. 2016-30090 Filed 12-15-16; 8:45 am]
 BILLING CODE 6820-EP-P