On September 29, the Department of Labor issued final regulations implementing President Obama’s Executive Order requiring federal contractors to provide paid sick leave for their employees. DOL estimates that the rule will impact up to 1.15 million employees who receive no or only limited sick leave benefits at present.

The new rule takes effect January 1, 2017. It will require affected contractors to provide at least 56 hours paid sick leave per year. The final rule makes several modifications from the proposed regulation, allowing contractors to use multiemployer plans to provide sick leave benefits, and grandfathering in some collective bargaining agreements with differing entitlements.

Despite the number of affected employees cited by DOL, this rule is expected to have limited impact on federal contractors. The vast majority already provide sick leave benefits well in excess of those mandated under the Executive Order. Contractors with more limited sick leave benefits should prepare to modify their terms by the beginning of next year.