Paid Leave Problems: A Case for Federal Contractors in Government Modernization

Despite the government’s efforts to deliver rapid relief to small businesses during the COVID-19 pandemic, federal contractors continue to encounter obstacles and challenges along the road to recovery. Many of the assistance measures have presented complexities and confusion. Agencies and their contractors remain anxious to resume work while safeguarding the wellbeing of their employees, but uncertainties in the laws have left some feeling mired in bureaucratic processes that have delayed their progress. Most recently, Nicole Ogrysko explored in her article for Federal News Network, unions are still confronting problems surrounding emergency paid leave

Some Background on Emergency Paid Sick Leave

Several new and updated regulations appeared in March. And we’ve attempted to demystify the nuances that accompanied laws such as the Families First Coronavirus Response Act (FFCRA), the CARES Act, and how they intersect with existing legislation like the Fair Labor Standards Act (FLSA). But the rush to get bills out the door may have compromised clarity in exchange for expediency.

On March 18, Congress passed the Families First Coronavirus Response Act (FFCRA). One of its primary provisions includes the Emergency Paid Sick Leave Act (EPSLA). The overarching goal of the EPSLA is to keep employers and employees solvent. For workers, the act aims to maintain a steady stream of income to prevent them from working in unsafe conditions or sacrificing their pay to obey the social distancing measures needed to promote public health. Although employers must bear these additional costs initially, the FFCRA seeks to reimburse them through tax credits.

All employees working for businesses covered under the FFCRA are eligible for two weeks of paid sick time for reasons related to COVID-19. Workers who have been employed for at least 30 days are also eligible for up to 10 weeks of paid family leave to care for a child, under certain circumstances related to COVID-19.

Federal workers covered by Title II of the FMLA remain eligible to claim paid sick leave under the Emergency Paid Sick Leave Act (EPSLA) of the FFCRA, although they can’t apply for extended family and medical coverage. Employees covered under Title I, on the other hand, can apply for the full suite of benefits in the FFCRA. 

Hurdles Facing Union Employees at SSA and VA

Under the EPSLA, all federal employees were eligible for up to 80 hours of emergency paid sick leave starting April 1. However, they had to satisfy specific coronavirus-related circumstances to qualify. But federal unions are now contesting the workaround procedures put in place by the Social Security Administration (SSA), which allow employees to manually request leave during the pandemic. There are a few hiccups.

  • The payroll codes required to request and accurately calculate payments related to leaves remain unavailable. SSA informed employees in late May that new procedures would allow them to request leave manually.
  • Employees must complete a waiver and specify the reason for the leave, which must correlate to circumstances linked to COVID-19. There are six criteria to meet, as we explain in our article about the FFCRA. Those workers can take leave under enhancements to the Family and Medical Leave Act (FMLA), but at two-thirds their regular rate of pay. So, if the worker’s regular hourly rate is $30.00, the EPSLA would require the employer to cover only $20.00 per hour of paid leave, if the proper conditions apply.
  • Employees also have to acknowledge that they may be overpaid for the leave — and that the agency will not waive that additional money.

“Multiple SSA unions, however, say this approach is problematic, because it sets up pre-conditions for employees to use the emergency paid sick leave benefits,” Ogrysko wrote. “The conditions, the unions said in a grievance with the agency, are a workaround for the ongoing complications with payroll and time and attendance systems — challenges that are ultimately beyond employees’ control.”

“The administration’s failure to implement the CARES Act timely intentionally cause bargaining unit employees to incur debts that are required to be repaid to the SSA, which unlawfully discourages bargaining unit employee participation in the emergency sick leave program,” said the American Federation of Government Employees Council 220 in its grievance.

While unions admit that challenges always arise when accelerating the implementation of complex pay and leave changes, the broad nature of the EPSLA has posed a different set of difficulties. 

Complications for Payroll Providers

Federal contractors who provide payrolling services for government agencies have a lot of their plates. The EPSLA’s approach to relief isn’t a universal, one-size-fits-all solution. Here’s a breakdown to illustrate.

Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay. To qualify, the worker must be unable to work because of the following reasons.

  • He or she has been quarantined under the direction of federal, state, or local government orders.
  • He or she has been quarantined under the advice of a licensed health care provider.
  • He or she is experiencing COVID-19 symptoms and is actively pursuing a medical diagnosis.

Now, if the employee is capable of performing his or her duties and has been given the option for telework, employers may not have to provide the paid leave under the EPSLA.

Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay. Yes, you read it correctly. Two-thirds the regular rate of pay. So, if the worker’s regular hourly rate is $30.00, the EPSLA would require the employer to cover only $20.00 per hour of paid leave, if the following conditions apply.

  • The worker has a bona fide need to care for someone under quarantine at the order of federal, state, or local government officials. 
  • The worker has a bona fide need to care for someone under quarantine on the advice of a licensed health care professional.
  • The worker must care for a child under 18 years of age whose school has closed or whose child care provider is unavailable because of COVID-19.

If an employee has been on the job for at least 30 calendar days, he or she is eligible for an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay. Okay, this one is a bit different.

  • The worker is covered under the Emergency Family and Medical Leave Expansion Act (EFMLEA) portion of the FFCRA, not the paid sick leave (EPSLA) part.
  • The rate is always two-thirds the regular pay.
  • The additional 10 weeks encompasses only the verified need for a worker to care for a child under 18 who has no access to school or child care because of COVID-19.

“That poses additional complications for agencies and their payroll providers, who must calculate an employee’s pay by grade, step and locality to comply with the compensation caps in the legislation — and then program those changes into their timekeeping and payroll systems,” said Ogrysko.

Payroll providers use different guidelines for rounding pay and leave totals. Theoretically, employees at the same pay rate, step, and locality could receive paychecks of varying amounts because the payroll providers supporting their agencies rely on different internal standards for factoring and processing pay.

The issue becomes more troublesome for employees at agencies such as Veteran’s Health Administration (VHA). These workers are typically classified as essential personnel because they’re considered health care workers or emergency responders. The agency determined that nearly all of its employees would be excluded from many provisions under the EPSLA as a result of this designation.

The Case for Modernizing Government

The ambiguities and gaps in the laws have exposed a stronger case for modernization in government, particularly for federal contractors who occupy the human capital space. For example, the General Services Administration (GSA) selected Grant Thornton as one of two vendors to begin payroll modernization under the agency’s “New Pay” initiative.

“The inattentiveness for the need to modernize has left government behind in serving its customers, in this case its employees,” opined Robert Shea, a former Office of Management and Budget official and current Grant Thornton principal.

In 2017, the administration passed the Modernizing Government Technology Act to “allow agencies to invest in modem technology solutions to improve service delivery to the public, secure sensitive systems and data, and save taxpayer dollars.”

Two years later, the President’s Management Agenda (PMA) emphasized that the “failure to address fundamental workforce needs will render other modernization work ineffective.” Under the “Workforce for the 21st Century” section, the PMA outlined its objectives.

  • The Budget delivers on both the Administration’s Government Reform and Reorganization Plan and the PMA by supporting a full reorganization of the Office of Personnel Management (OPM). As described in the Reorganization Fact Sheet, this reform will restructure governance of one of the Government’s larger and most impactful investments—a Federal workforce of 2.1 million civilians.
  • Already, the Administration has focused on defining a baseline for how agencies address poor performers, distribute financial awards, and hire staff. It has used existing authority to remove barriers and fix processes in order to focus on continuous improvement within agencies. 

The PMA also highlighted many other initiatives, including the following.

  • Acquisition modernization to transform contracting and procurement processes into streamlined systems that improve operational, process, and cost efficiencies.
  • Enterprise risk management systems to enhance the approach for evaluating, testing, documenting, and reporting on internal controls over data integrity.
  • Performance management, which seeks to leverage best practices and lessons learned to drive improvement within the Federal Performance Management Framework.

For federal contractors, new opportunities await. The ongoing outbreak of COVID-19 has brought the world to a standstill, but its silver lining is an implied call to arms for innovation. Business as we know it may have been thrown into limbo, yet the march toward progress and forward-thinking momentum has never ceased. Now is the time for savvy federal contractors to concentrate not simply on resuming operations and returning to a status quo that will likely not endure. This is the moment to focus on innovation and continuous improvement across a wide array of government modernization needs:

  • Advanced automation in candidate recruiting, hiring, and payrolling platforms.
  • Staffing models that are tailored to the near- and long-term future requirements of government work, influenced by the new normal that will rise from the pandemic: health care, IT, agile transformation, digital platforms, and more.
  • Streamlined and automated methods for complex federal contracting, joint ventures, and subcontracting.
  • A civilian workforce skilled in the tools and practices that the government can leverage to improve existing infrastructures, such as digital power grids, manufacturing advances, and exponential technologies (e.g., robotics, 3D printing, alternative energy, etc.).

As federal contractors, we are standing at the threshold of promise. And the government stands to gain untold rewards by pivoting its projects to those that ensure modernization and growth for the nation.

Photo by Michael Dziedzic on Unsplash

Continue reading

Our newsletter

Get great curated articles every week.

Combine sections from Ollie's vast component library and create beautiful, detailed pages.
No spam!

Innovative talent powering a brighter future.