Obama requires new federal contractors to offer paid sick leave

Private companies with federal contracts will now be required to offer their employees paid sick leave, thanks to an executive order President Barack Obama signed Monday, the day the U.S. celebrates Labor Day.

Starting in 2017, businesses that receive new contracts from the federal government will have to provide their employees with at least one hour of paid sick leave for every hour they spend on the job. The order will directly affect the benefits of approximately 300,000 workers, according to a White House fact sheet released Monday.

"Unfortunately only Congress has the power to give this security to all Americans, but where I can act, I will," said Obama of paid sick leave during a Monday speech at the Greater Boston Labor Council's Labor Day Breakfast.

This is not the first time that Obama has taken unilateral action to strengthen labor standards for federally contracted workers. In February 2014 the White House issued an executive order requiring businesses with federal contracts to pay their employees a minimum of $10.10 per hour; four months later, the president signed an order banning LGBT discrimination at federally contracted workplaces and the month after that he strengthened compliance and disclosure rules for potential contractors that may have violated labor law.

Those orders represent a victory for unions, particularly the labor federation Change to Win, which has been organizing workers at federally contracted businesses through the campaign Good Jobs Nation. Low-wage workers affiliated with Good Jobs Nation — including food service and janitorial workers in federal buildings — have spent the past two years engaging in protests and other labor actions to pressure the federal government to improve contractor standards.

A 2014 report from the left-leaning think tank Demos estimated that roughly 8 million workers “rely on low-wage jobs in the federally-supported economy, that is, jobs with firms that receive a significant portion of their revenue from federal funds.”

The president has broad authority to unilaterally set terms for how businesses must conduct themselves in order to be awarded federal contracts. By pushing the White House to improve working conditions for workers at those businesses, labor strategists hope to create a ripple effect for the economy as a whole.

“We’ve seen it before,” said Good Jobs Nation spokesman Paco Fabian. “The president’s leadership can have an effect beyond the workers it directly affects.” 

To that end, Good Jobs Nation is demanding that the president make two more major adjustments to federal contractor standards: First, that he give preference to “model employers” (those that pay their employees $15 or more per hour) when awarding contracts, and second, that he take legal steps to encourage collective bargaining at federally contracted businesses.

“We hope the president is willing to take more action during the rest of his term,” said Fabian.

Progressive activists said they also hope Monday's executive order will raise the pressure on Congress to approve guaranteed sick leave for all workers.

“The executive order sends an important message about the basic standards that should be available in any workplace,” said Neera Tanden, the president of the Center for American Progress, in a statement. “No one should be forced to choose between keeping their job and caring for a sick child or parent, or recovering from their own illness."