(Bloomberg) — About 300,000 workers for U.S. government contractors will gain paid sick leave under an executive order President Barack Obama signed Monday.
Taking the action in Boston on the U.S. Labor Day holiday, Obama signed the order as part of a suite of workplace-related executive orders his administration has issued.
“We are still the only developed country in the world that doesn’t have a paid leave policy, and that needs to change if we want to remain competitive,” Valerie Jarrett, a senior White House adviser, said Sunday on a conference call with reporters.
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The requirement, covering companies including Lockheed Martin Corp. and Boeing Co., the top two government contractors, will apply to new federal contracts starting in 2017. Workers will be able to use the time if they are ill or to care for sick family members.
The White House declined to put a cost or benefit estimate on the mandate, saying only that the administration expects the benefits, including employee retention and increased productivity if sick workers stay home and don’t infect others, to outweigh the costs.
Obama may be setting himself up as a target by using executive authority to push through another change in workplace policy. Republican lawmakers and business groups, including the U.S. Chamber of Commerce, have criticized him for the use of such measures, which are a way for the administrative branch of government to make changes without Congress passing a law.
“The United States is the only country where the issue of a paid leave law has become a partisan issue,” Labor Secretary Tom Perez said on the conference call. “The Republican Party is out of step with similar conservative governments around the world.”
The executive order will make it harder for small businesses to remain federal contractors, Randy Johnson, the U.S. Chamber’s senior vice president of labor, immigration and employee benefits, said in a statement Monday.
“Once again President Obama is using the federal procurement system to do something it was never been designed to do — usurp the legislative authority of Congress to determine appropriate workplace policies,” Johnson said in the statement.
Supporters of the requirement, including labor unions, say providing paid sick leave is good for corporate bottom lines as well for workers and their families.
Nationwide, about 44 million people in the U.S. don’t have paid sick time off, said Cecilia Munoz, director of the White House Domestic Policy Council. Requiring paid sick leave for most workers would require a change in law.
Obama traveled to Boston to sign the order because Massachusetts on July 1 enacted a ballot measure allowing workers to accrue as much as 40 hours of sick time per year.