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Unanet would like to thank Jenny Clark with Solvability as well as our Unanet customers for this Knowledge Center entry, which demonstrates how our customers are maximizing their use of Unanet.

What’s covered in this document:

Title: Federally Mandated Sick Leave

Brief description:

In 2015, the White House mandated via an executive order that sick leave be given for employees on certain types of federal contracts. Note that contracts prior to 1/1/2017 would not be impacted, but any bids during 2016 that started in 2017 may not have accounted for this sick leave requirement, resulting in higher than anticipated costs. The order only applies to certain types of contracts as outlined in the DOL link below under Additional Information (for example, employees on a SCA or DBA contract.) Full-time and part-time sick leave is addressed below. Note that the annual upper limit can be 56 hours or above, but limits may not be lower than 56.

Per Jenny Clark:

"The change takes effect January 1, 2017, and provides for a minimum of 56 hours of sick pay per year for full-time employees. If your company has existing Service Contract Act (SCA) contracts, you'll want to review to determine if you'll need to add 16 hours to the standard 40 hour policy. Similar rules apply to Davis-Bacon contracts.

Many companies have gone to an Annual Leave or Paid Time Off (PTO) leave policy in recent years, which combined Vacation and Sick Leave into annual amounts, usually around 120 hours per year with increases for service and seniority. This Executive Order will force contractors to re-evaluate that policy and go back to a Vacation/Sick split of hours. Employers should also consider how to track and accrue leave, how to convert existing leave balances in January, plus any affects on payoff of leave at termination, and adjusting the liability amount shown on the balance sheet.

There is currently no word on how contractors should attempt to recover these costs. If the contracts are Fixed Price or Time and Materials (T&M) contracts, these costs come out of the profit on the contract. For Cost Plus Contracts, there could be cost recovery through indirect rates provided there is adequate funding on the contract, or potentially through a request for equitable adjustment."

Project or Task Setup

You will want to differentiate the project/task that captures Sick time from the project/task that captures other types of Leave in order to cleanly track Sick time to prove you are in compliance. For example, in Unanet you could have a Project for Sick time and a Project for Vacation time, or you could have a Task for Sick time and a Task for Vacation time under a Project called "Leave." This will ensure a clean tracking of the sick hours to comply with the federal requirement. It is also useful because vacation is typically paid off when a person terminates but sick is not.

Granting Sick Hours to Full-Time Employees


  1. An annual accrual plan allows you to deliver 56 hours at the start of each year to each full-time employee. For more information, see Method 1 on this page: Annual Accrual Setup
  2. You may instead prefer to do a periodic (weekly, semimonthly, etc.) of the sick amounts, accruing over the course of the year. Keep in mind that you may want to allow carryover of these hours since the last few hours will be unusable as they will accrue 56 only by the end of the year. (For example, accruing 2.15384 each biweekly period, summing to 56 by year end). This method may be better than the annual accrual plan because you can set the per period cap to 56 or some other higher cap, as desired, while the cap feature in the annual plan applies only annually. Also, with this method you can allow people to go into a negative balance using the Exceed option on the accrual plan, in order to allow new employees to use sick leave in the first few months of their hire while they are building their balance (if you don't load an initial balance.)

Granting Sick Hours to Part Time Employees

The order requires that each part-time employee shall earn at least 1 hour per 30 hours worked on an appropriate contract type. This can be handled in Unanet either via an export/import process, or via a query followed up by an import.

Export/Import Method

  • The export calculates the number of hours worked against an appropriate contract type, and creates a file in the format of a Person Accrual or Person Assignment Import. You will choose either Person Accrual import or Person Assignment import as your import method.
  • The import will adjust the person's balance depending on whether it is a Person Accrual Import or a Person Assignment Import.
    • The Person Accrual import adds that new calculation earned to the existing accrual balance. 
    • The Person Assignment import replaces the old assignment budget with the new one. This means you will need to account for a broad range of time. (BOT to EOT, or some start date through EOT, etc.)

Query/Import Method

  • The query looks at the customer database in order to calculate the amount of sick leave earned.
    • This will likely look at:
      • The existing Assignment Budget in order to capture the current budgeted amount.
      • Any sick leave taken (time charged to the sick project) in the previous week.
      • Worked hours on eligible projects in the previous week.
    • An Assignment import file is generated from this process.
  • The Person Assignment import then replaces the previous balance to be the old assignment budget plus the amount of increase which was earned. Note that you could also do a Person Accrual import which would add to the previous balance (adjusting for the appropriate dates relative to that budget).

Partial Accruals/Residuals/Fractions

You will need to determine how to handle partial earnings. For example, if the part-time person worked on applicable contracts for only 15 hours in a week, do you immediately allow them to use the 0.5 hour? Or must they wait until they have worked another 15 in order to make the full 1 hour available? You will need to decide how to interpret this part of the executive order.

Handling Carryover

Since sick leave hours can be carried over, you will want to determine first what the accrual cap limit will be. The annual upper limit can be 56 hours or higher. Many companies may want to leave the cap at 56 hours per year. 

This can be handled in Unanet by:

1) If using a periodic (weekly/biweekly/monthly/semi-monthly) accrual plan, then you can set the per period cap hours to 56.

2) If using an annual accrual plan, then you can cap the hours at 56 at the end of the year (but note they could accrue above the 56 hours during the year).

3) If using assignments, then using a process to end date the assignment with the appropriate budget. 

Sample Use Case

Each company will need to interpret and apply the rules to effect a solution which they believe most closely satisfies the requirements of the executive order. Let's look at a sample use case by Govcon XYZ who elected to perform a query to assess hours earned, followed up by an import to adjust the balance.

Govcon XYZ's sick policy for full-time employees already met the requirements of the executive order, so no changes were required for full-time employees.

For part-time employees, they follow a process of automated queries and imports which occur hourly during business hours as outlined below.

  • Using the Integration Management Utility (IMU), queries are performed to look at to look at prior calendar week entries for qualified part-time employee work and calculates the appropriate increase in Assignment Budget
    • Qualified means:
      • Contracts new as of 1/1/2017 and later.
      • Employee Type is registered as Part-Time or less (note that Full-Time employee policy had already satisfied the requirement).
      • Note that this govcon is not screening for contract type (SCA, Davis Bacon, etc), although that is certainly an option.
    • XYZ's interpretation of the order is that:
        • It is calculated weekly on a Monday-Sunday basis (you might instead interpret it as Sunday-Saturday, or some other week).
        • Only when they earn a full hour is it added in as available to the assignment budget for charging (in the meantime any fractions are stored in an Access database).
        • You cannot exceed 56 hours of available sick leave; once they reach 56, they stop earning fractions until time is charged/taken.
    • The query looks at:
      • Prior Assignment Budget or X. Note that the Assignment dates are 1/1/2017-EOT.
      • Prior Week Sick actuals or Y.
      • Prior Week Charged hours or Z.
    • The Assignment Import then is populated with:
      • Same dates of 1/1/2017-EOT.
      • Assignment Budget which is calculated as X + (Z-Y)/30.
        • Note that if fractions are in play, the fractions are held in an Access database until whole numbers/integers are reached.
      • Note that there is no update if there is no change to be made.

    • Example 1:
      • Today is Monday, Jan. 30
      • Person Assignment Budget is 40 with dates of 1/1/2017-EOT
        • X = 40
      • Person in the week of Jan 23-29 charged 0 hours sick time
        • Y = 0
      • Person in the week of Jan 23-29 charged 30 hours 
        • Z = 30
      • Assignment budget is then updated to be 41: 40 + (30-0)/30
        • no fractions/residuals
    • Example 2:
      • Today is Monday, Jan. 30
      • Person Assignment Budget is 40 with dates of 1/1/2017-EOT
        • X = 40
      • Person in the week of Jan 23-29 charged 8 hours sick time
        • Y = 8
      • Person in the week of Jan 23-29 charged 30 hours 
        • Z = 38
      • Assignment budget is then updated to be 41: 40 + (38-8)/30
        • no fractions/residuals
    • Example 3:
      • Today is Monday, Jan. 30
      • Person Assignment Budget is 40 with dates of 1/1/2017-EOT
        • X = 40
      • Person in the week of Jan 23-29 charged 8 hours sick time
        • Y = 8
      • Person in the week of Jan 23-29 charged 30 hours 
        • Z = 30
        • Assignment budget is not updated since (Z-Y)/30 is 0.73, which is less then 1. This fraction is held in an Access database until the person earns enough to warrant a whole integer. 
  • Assignment Import file is used to update (only if there is a change).
  • IMU runs the query/import process every business hour in order to keep a real-time feel with their accounting system, which is not Unanet Financials.
    • IMU creates HTML log to have an auditable trail of residuals or lockout because they hit the 56-hour mark.
    • As a result, this process accounts for changes to the prior period on an hourly basis.

Does Unanet plan to have an automated solution for this requirement?

The short answer is no, due to the many interpretive aspects of the executive order. For example, if a person works 15 hours, does the 0.5 hour earned immediately become available in their balance? How do you identify the work is an applicable contract such as Davis Bacon (via org type, or project type, or UDF, or other)? Do you define "workweek" as stated in the order to be Monday-Sunday, or Sunday to Saturday, or Saturday to Friday? All of these questions and more may be answered with varying interpretations, which would make coding a generic solution for all customers difficult. In addition, it's possible that a subsequent executive order by new administrations may rescind this executive order. 

Additional Information 

US DOL - Accrual of Paid Sick Leave 

The White Hours - Executive Order - Establishing Paid Sick Leave for Federal Contractors 

Littler - DOL Issues Final Rule Implementing Paid Sick Leave for Federal Contractors 

LinkedIn - Executive Order Mandates 7 Days Sick Pay for Federal Contractors 

Help Docs - Integration Management Utility (IMU) 

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