President Obama Signs Executive Order on Labor Day Requiring Contractors to Pay for Sick Leave
Hundreds of thousands of American workers could become newly eligible for paid sick leave after President Barack Obama signs an executive order Monday forcing companies who contract with the federal government to provide the benefit to their employees.
The Labor Day announcement comes after a set of similar orders requiring federal contractors to boost paychecks and conditions for their workers, including expanding overtime compensation, banning discrimination based on sexual orientation and raising workers’ minimum wage.
Obama has pushed Congress to extend those new rules across the entire private sector, but met resistance from Republicans in Congress. Similar opposition was expected to the paid sick leave rule.
The proposed rule change Obama plans to announce Monday in Boston would require firms receiving government contracts to provide an hour of paid sick leave for every thirty hours an employee works, up to seven paid sick days per year.
The order would affect 300,000 American workers who currently aren’t eligible for any paid sick leave, the White House said, adding an unknown additional number of workers would be granted additional sick time.
The new rule was expected to have the greatest effect among low-wage workers, who are less likely to currently receive paid sick leave.
Obama has made improving labor conditions a priority, though his power to expand benefits like paid sick leave and overtime pay to all Americans is limited.
Only Congress could pass laws requiring all employers to provide their workers paid sick leave or pay them higher wages.
Republicans who control Capitol Hill oppose such steps, saying they will raise the costs of doing business and make products and services more expensive.
Instead, Obama has issued orders requiring the federal government, and the many companies who receive federal contracts, to abide by the new labor rules.
But the impact of his actions is dwarfed by the potential effect of new laws; for example, the order he’ll sign Monday expands paid sick leave to only 300,000 of the estimated 44 million American workers currently without access to the benefit.
Opponents claim Obama has overstepped his legal authority, and groups like the U.S. Chamber of Commerce have threatened lawsuits over the President’s use of executive actions to set contracting rules.
Administration officials Sunday characterized expanding access to paid sick leave as bringing American working norms into line with those of other developed nations.
“The United States is the only country where the issue of a federal paid leave law has become a partisan issue,” said Labor Secretary Thomas Perez, labeling current rules stuck in the “Leave it to Beaver era.”
“Regrettably here, it’s become a partisan issue. Certain Republicans have said we can’t afford to do this,” he said. “This is really remarkable when you view this issue of paid leave through the global lens. The Republican Party is really out of step with conservative governments around the world.”
The White House said it hadn’t quantified how much the new rules would cost businesses with federal contacts, claiming instead that higher worker retention rates would offset having to pay for the new benefit.
The new rules would affect government contracts beginning in 2017, allowing companies competing for government work to incorporate the additional costs into their bids.
Cecelia Munoz, the director of the White House Domestic Policy Council, said the rule would not prompt additional federal spending.
“The benefits with respect to businesses will more than offset the costs and ultimately make them, as employers, more productive and more efficient and therefore more valued to the taxpayer,” Munoz said.