Posted on 09/07/2015 3:29:14 AM PDT by markomalley
President Obama is expected to unveil an executive order on Labor Day requiring federal contractors to offer their workers at least seven paid sick days annually, a move he hopes will push the United States into line with other Western countries when it comes to paid-leave laws.
He will also use a speech before the Greater Boston Labor Council on Monday to call on cities, states and the private sector to follow Boston's example and offer employees at least six weeks paid parental leave.
Labor Secretary Thomas Perez told reporters Sunday that attending the G-20 Summit in Ankara, Turkey last week showed him that the U.S. is "far behind … from literally the rest of the world" on the issues of paid sick and paternity leave.
"Countries all over the world have more sensible paid-leave laws," Perez said during a conference call on Sunday.
The House Benghazi Committee's investigation will soon take center stage in American politics. Democratic presidential candidate Hillary Clinton will appear at a hearing held by the committee next month — little more than one year before the presidential election.
Since its formation in 2014, the committee has served as something of a thorn in Clinton's side. The committee first uncovered that Clinton had used personal email and at least one private server as secretary of state. Her public responses to questions about her unusual email arrangement have dogged her presidential campaign, as new revelations have forced her to alter earlier statements made about her exchange of classified information and the security of her
"We are one of just a handful of countries that fail to provide paid maternity leave," Perez said in a Labor Department study released Friday. The study stated that the employers of 40 million working Americans do not offer paid sick leave of any kind, and the administration hopes that starting with federal contractors will encourage the private sector to follow suit.
The executive order requires federal contractors to offer one hour of paid sick leave for every 30 hours worked.
"For paid leave, it is a question of when, not if, for we are still lagging as a nation," Perez said.
Obama will also call on Congress to pass his proposed Healthy Families Act, which would require any business employing more than 15 people to offer up to seven paid sick days a year.
In the Sunday conference call, the president's advisers reiterated that Obama proposed $2 billion in his 2016 budget to encourage states to establish family- and medical-leave programs.
"In most families today, both parents work and have responsibilities caring for their children, aging parents or family members with disabilities," Perez stated in the study. "Yet, the fundamental structure of work has not kept pace with the changing American family … many parents are forced to choose between taking an unpaid day off work—losing much-needed income and potentially threatening their jobs—and sending a sick child who should be home in bed to school."
The Labor Department study argued that costs to businesses' are minimal when they offer increased paid-leave benefits.
After "California and New Jersey enacted their public programs, most businesses reported positive or neutral experiences and few negative effects," the study stated. "In a survey of California employers about the impact of Paid Family Leave on their business, most reported they could cover the work of employees on leave by temporary reassignments, and they did not incur any new hiring or training costs. More than 90 percent saw no evidence of abuse of leave benefits."
Obama is powerless to require federal contractors to provide vacation sick leave time to employees.
What he is able to do is to modify the Federal Acquisition Regulation to add a clause requiring contractors to offer employees that benefit.
News flash: the vast majority of federal contractors already offer their employees a combination of paid annual leave / sick leave or generic "paid time off" anyway.
Contractors will be more than happy to have this FAR clause inserted into the Ts & Cs of future contracts. It won't impact their bottom line in the least bit. It will just increase their revenue.
Generally speaking, services contracts for government contracts are priced based on the following formula:
(([direct labor costs] x [fringe] x [overhead])+[other direct costs]) x [general & administrative] = cost
cost x fee = price
You will note that the cost and price formulas are separated. The reason being that the price formula only directly applies for CPFF service contracts and not for FFP or T&M contracts.
This move will increase the [fringe rate] factor across the board and won't give anybody a competitive advantage.
In other words, a bunch of smoke and mirrors. But "Obama gave..." from his stash will be the headline.
Very few DoD contractors have sick-days offered. Maybe fifteen years ago, it was popular...but most have deleted it. I worked with a company that offered five days a year of sick leave (you maxed out with ten days). One day, they decided to cut the option and gave two more regular days a year of leave in exchange. We were given less than 30 days of notice on this, and everyone took what sick days they had and called in sick (Military bosses were furious over how this was handled).
They have PTO which can be used for either.
And I would wager than when the applicable clause is placed in the FAR, it will count PTO as being compliant with the federal requirement.
Seriously, look at this from the perspective of the Lockheed, Northrop, or whatever: if a federal mandate forces all of your competitors to do the same thing, why do you care about it? You pass the cost on (as increased Fringe) to your customer.
“In other words, a bunch of smoke and mirrors.”
Indeed!
I’ve been a government contractor for many years, and although I can only speak about the reality of the situation in the Baltimore-Washington corridor, here’s how it works here.
Contractors pretty much offer their employees two to three weeks PTO in their benefits packages. Some also offer additional “admin” hours that you can use for training or time needed to re-up your certs. You accrue this time at a fixed number of hours per pay period. It’s your decision whether to use those hours for sick time or vacation time. Once you have banked enough PTO, it’s up to you. I have worked for firms that paid an hourly wage and did not offer PTO, but the wage was set high enough to compensate for it. If you take time off in excess of your leave balance, you either make it up during that pay period or take Leave Without Pay. In all the cases I have heard of, the contractor companies tend to work with their employees to come up with a plan to spread out the impact for their people who end up with a negative leave balance.
Contractors are always looking to poach good people from other companies. Believe me, we all know which companies offer the best benefits packages and what they are. And believe me, we all share that information. Companies who cheap out on the PTO will soon find themselves crying for bodies to fill the seats.
See how it works? The market has pretty much ensured that sick time is not a huge fat hairy problem for the contractors here. I can’t think of a firm that doesn’t have a short-term disability option in their package - even for hourly employees - if one’s health situation requires more than the paltry seven days per year that Mr. Obama champions.
Caveat - this is my experience in 30 years of government contracting in this geographic area. I know that anecdotes do not equal data, and there are individual cases outside this norm, but that’s how it works here and now. It is NOT a problem that the feds need to fix.
I get a couple of weeks of time off for illness every year. The catch? I can only use 2 or 3 days a year (I think it might be 2). That doesn’t even cover my routine medical appointments. If I need more time off for illness I have to apply for short term disability to use the days I supposedly have been given. So instead I use my vacation days (PTO).
union swan song
the effort is a tax on contractors and thus not legal since it was not imposed by congress
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