The federal government has long been a model employer. It often has taken the lead in providing workers with benefits like on-site child care, paid family leave and flexible work-time options in addition to more standard benefits like health-care insurance and pensions. After seeing that these sorts of benefits could be provided at a reasonable cost, private employers often follow suit. Usually the first private adopters are large firms, but if the largest firms can provide benefits without too much disruption, smaller firms are likely to go this route as well, in part to be able to compete for workers. Through this mechanism, the labor practices of the federal government can have a substantial impact on the larger labor market, even without legislation by Congress mandating specific practices.
President Obama is well aware of this pattern. This is why he issued an executive order last year requiring federal contractors to pay their workers more than the federal minimum wage. This will directly affect a large number of workers, but it is likely to have a spillover effect that is several times larger.
The same story applies to President Obama’s more recent executive order requiring contractors to offer workers paid sick leave. This could help to encourage the practice of providing paid sick days to a much larger segment of the workforce. (As a practical matter, it would be difficult for a large firm to arrange to have paid sick days for a subset of workers employed on federal contracts, but to not provide the same benefits to the rest of its workforce.)