Due to an executive order by President Obama, all federal contractors with new contracts (or renewals) after January 1, 2017, are required to provide paid sick leave to their employees. The Department of Labor estimates that this final rule will provide paid sick leave to about 1.15 million workers employed by federal contractors. Similar in magnitude to the DOL estimates, our research indicates that paid sick leave for federal contractors will improve job quality for many hundreds of thousands of workers across the country. As the rule reaches all federal contractors, our estimates suggest that between 694,000 and 1,053,000 employees of federal contractors will directly benefit by receiving additional paid sick leave, including an estimated 450,000 to 775,000 who would receive no paid sick leave without it.

The rule on paid sick days helps protect employees of federal contractors by giving them the ability to earn paid sick time to care for their own medical needs, a family member’s medical needs, or for purposes related to domestic violence, sexual assault, or stalking. Evidence from the private sector and the states and cities with paid sick leave laws demonstrates that paid sick days improve employee retention, reduce workplace contagion and injury, and increase productivity. The cost savings associated with paid sick days serve the purpose of the final rule to promote economy and efficiency in federal contracting. Furthermore, as with existing state and local paid sick leave laws that are very similar to the final rule, the proposed rule will benefit workers, their families, and public health.

Paid sick days for federal contract workers will also help level the playing field between those fortunate enough to have such benefits and those who aren’t so lucky. According to the latest data, 36 percent of private sector workers do not have access to paid sick leave. Fortunately, state and local public policies continue to make a difference for working families, and the rate of coverage has increased over the last year, from 61 to 64 percent of private sector workers. Particularly of note is the rate of increase for low-wage workers who increased their coverage from 31 to 39 percent. Unfortunately, access to paid sick leave remains vastly unequal, as shown in the figure below. Only 27 percent of the lowest wage workers (the bottom 10 percent) have the ability to earn paid sick time to care for themselves and their family as opposed to 87 percent of the highest wage workers (the highest 10 percent).

Because there are federal contractors across the economy, workers in certain sectors are likely to see the biggest boost in their sick time coverage. While the order will be executed uniformly, those sectors with lower rates of coverage are most likely to see a greater change in benefits for their workers. We estimate that over half of federal contract workers in accommodation and food services; administrative and support and waste management; arts, entertainment, and recreation; and retail trade will gain coverage.