You stopped tracking sick leave. WHD didn't stop counting.
One sick leave EO was revoked. The other wasn't. WHD knows which one covers your legacy contracts.
Welcome to Part 31, the prevailing wage newsletter that helps federal SCA contractors protect their margins and stay compliant on post-award operations.
This week: FY2025 enforcement data reveals a sick leave compliance spike that most contractors haven’t accounted for, the H&W rate update is legally overdue and can drop any day, a new New York prevailing wage law takes effect in 10 days, and a key WD modification procedure was just updated.
In this issue
🚨 EO 13706 sick leave: the enforcement spike most contractors missed
📊 H&W rate update: watch SAM.gov
⚖️ New York off-site fabrication law: 10 days
📋 WD modification procedures updated
📖 Know the Reg: EO 13706
LEAD STORY
You stopped tracking sick leave. WHD didn’t stop counting.
FY2025 WHD enforcement data tells a specific story about what happens when contractors confuse two executive orders. EO 14026 (Biden’s 2021 paid sick leave expansion) was revoked March 14, 2025. EO 13706 (Obama’s 2015 original order) was not. WHD ran 125 EO 13706 compliance actions in FY2025, recovering $563K across 1,070 workers, up sharply from prior years. That’s not ambient enforcement noise. That’s contractors who stopped accruing sick leave on contracts that never stopped requiring it.
The classification gap is easy to miss: if a contract was awarded between January 1, 2015 and January 29, 2022 and hasn’t been re-awarded or exercised as a new option under EO 14026 since, EO 13706 still controls. Those workers accrue 1 hour of paid sick leave per 30 hours worked, capped at 56 hours. Recordkeeping requirements still apply. The obligation didn’t expire when Biden’s order was revoked; it predates it by six years.
The enforcement signal is clear. WHD is not confused about which order applies to which contract vintage. The FY2025 compliance action count suggests some contractors are. (DOL WHD Data Dashboard)
By the numbers
125. EO 13706 compliance actions with violations, FY2025
$563K. Back wages recovered on EO 13706 sick leave violations, FY2025
1,070. Workers who received back wages under EO 13706, FY2025
Jan 1, 2015 – Jan 29, 2022. The contract vintage window where EO 13706 still applies
What to do about it
Map your contract vintage. Pull every active SCA contract and flag those awarded January 1, 2015–January 29, 2022 that have not been re-awarded or renewed under a post-January 2022 structure. Those are your EO 13706 contracts.
Confirm sick leave accrual is still running. For each EO 13706 contract, is your payroll system still accruing at 1 hour per 30 hours worked? Is the 56-hour cap tracked? Did anything get turned off on March 14, 2025?
Calculate the gap if accrual stopped. If you wound down EO sick leave tracking after the Biden-order revocation on a contract still covered by EO 13706, model the back-wage exposure now. Voluntary self-correction before a WHD inquiry is your strongest available posture.
Brief subcontract managers. Prime contractor liability for sub-tier EO 13706 violations is real. If your subs stopped tracking, your contract gets the audit.
Understand the renewal trigger. When a legacy EO 13706 contract is exercised as a new option under a fresh award structure post-January 2022, EO 13706 drops. Until that structural renewal happens, it doesn’t.
In Brief
A bill approaching a House vote could force CBA terms onto your SCA successor contracts.
Forced arbitration, forced wage floor: The Faster Labor Contracts Act (H.R. 5408) is approaching a House floor vote via discharge petition with bipartisan support. The bill imposes binding arbitration on first-contract collective bargaining disputes, with government-appointed arbitrators setting CBA terms if parties can’t agree. The SCA successor contract exposure is specific: if a CBA is established on an SCA-covered service contract through forced arbitration, those arbitrated rates could exceed the WD prevailing wage floor, and under FAR 52.222-41(m), successor contractors are bound by predecessor CBA wage rates, not just WD rates. You’d be walking into a recompete against a labor cost floor you had no part in negotiating, set by an arbitrator. Not law yet, but monitor for a House floor vote. (PilieroMazza Weekly Update, June 4) | (H.R. 5408)
New York’s off-site fabrication law hits in 10 days. If you fabricate for NY public works, your payroll obligation just changed.
Extraterritorial reach, legal challenge pending: New York’s S2536A (signed December 20, 2025) extends New York’s prevailing wage obligations to off-site custom fabrication on public works projects effective June 18, 2026, even if the work happens outside New York. A federal lawsuit challenging the law’s extraterritorial reach was filed June 3; watch Kaufman Dolowich’s coverage for an injunction ruling before the effective date. Two carve-outs: DBA-covered federal projects are explicitly exempt, and only contracts bid on/after June 18 are covered. If you fabricate for NY state public works and your work isn’t DBA-covered, you have certified payroll obligations, new labor classifications, and new recordkeeping on every new NY solicitation starting next week.
The WD modification procedure was just updated. If your compliance process cites FAR 22.404-6, verify you’re on the June 5 version.
Procedure updated, obligation unchanged: FAR 22.404-6, which governs how contracting officers incorporate updated wage determinations into existing contracts via modification, was updated June 5, 2026 as part of the FAR Overhaul. The underlying obligation hasn’t changed: when a contract modification incorporates a new WD, you must implement the new rates promptly. What’s changed is the procedural framework around how that mod gets processed. The ARB’s Seven Hills decision (ARB No. 2024-0005) confirmed that failing to implement a new WD promptly after a mod is enough for debarment, no willful intent required. If your compliance trigger for WD updates references the FAR, make sure it references the current version.
Know the Reg
EO 13706 / 29 CFR Part 13
Executive Order 13706 — Paid Sick Leave for Federal Contractors
Executive Order 13706, signed September 7, 2015, requires contractors on covered federal contracts to provide employees up to 56 hours of paid sick leave per year, accruing at 1 hour per 30 hours worked. Coverage follows the work: if the contract is subject to the SCA, the DBA, or the FLSA, and was awarded on or after January 1, 2015, EO 13706 applies.
The distinction that’s catching contractors right now: EO 13706 covers contracts awarded through January 29, 2022, after which EO 14026 (Biden’s expansion) became the governing order for new and renewed contracts. When EO 14026 was revoked March 14, 2025, DOL stopped enforcing it. DOL explicitly did not revoke EO 13706. Any contract in the 2015–January 2022 vintage window that has not been re-awarded under the post-January 2022 framework still carries the full EO 13706 obligation.
Operationally: EO 13706 requires per-employee accrual tracking, written notification of available leave balances, carryover of unused leave year-to-year (subject to the 56-hour cap), and reinstatement of leave balances for returning employees on successor contracts. A payroll system that stopped accruing on March 15, 2025 on a contract still covered by EO 13706 is building a back-wage liability with every pay period. (DOL EO 13706 Compliance Resources)
Dates to remember
Jun 18 — New York Off-Site Fabrication Prevailing Wage Law Effective. Applies to NY public works bids on/after this date. DBA projects exempt. Injunction ruling pending.
Jun 24–25 — Public Contracting Institute: Incurred Cost Submission Deep Dive. Virtual, 12–3:30 PM ET. $395/person. FAR Part 31 and SCA fringe overlap.
Jun 30 — FAR/DFARS Major Threshold Changes Take Effect. TINA to $10M, CAS full coverage to $100M, CAS per-contract to $35M, for contracts awarded after this date.
~Jul 7 — DOL Annual H&W Rate Update via All-Agency Memorandum. Watch SAM.gov. New floor effective immediately on or around this date.
Aug 6 — ABC NorCal Prevailing Wage Webinar. Davis-Bacon compliance. Northern California chapter.
Sep 23–24 — DOL WHD Free Prevailing Wage Virtual Seminar (SCA + DBA). Free, two-day virtual. Register early; these fill.
GovCon Acronym Glossary
AAM — All-Agency Memorandum. DOL’s mechanism for publishing updated H&W fringe rates to all federal agencies simultaneously.
ARB — Administrative Review Board. DOL’s appellate body for SCA debarment and wage violation decisions.
DBA — Davis-Bacon Act. Prevailing wage law covering federal construction contracts; SCA’s counterpart for service contracts.
FCA — False Claims Act. Federal statute imposing treble damages for false certifications submitted to the government.
H&W — Health and Welfare. The fringe benefit component of SCA wage determinations, expressed as an hourly floor.
ICHRA — Individual Coverage HRA. A defined-contribution health benefit that can satisfy both SCA H&W and ACA employer mandate obligations.
SCA — Service Contract Act (Service Contract Labor Standards). Federal law requiring prevailing wages and fringe benefits on covered federal service contracts.
WD — Wage Determination. DOL-issued document specifying minimum wage rates and fringe benefits for covered labor categories in a given locality.
WHD — Wage and Hour Division. The DOL enforcement arm for SCA, DBA, FLSA, and related labor statutes.
P31 takes its name from FAR Part 31, the Cost Principles, the part of the FAR that governs every dollar on every federal contract.
This newsletter is for informational purposes only and is not legal, compliance, or financial advice. For contract-specific guidance, consult qualified labor counsel.
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