A judge in the U.S. District for the Southern District of New York struck down certain employer-friendly provisions in the Department of Labor’s (DOL) Families First Coronavirus Response Act (FFCRA) regulations on August 3, 2020, four months after the regulations went into effect.[1] This ruling was in response to a legal challenge by the state of New York to portions of a DOL final rule implementing the FFCRA. Specifically, the court struck down the following four provisions:
- The definition of who qualifies for the healthcare provider exemption;
- The exclusion from benefits of employees whose employers do not have work for them;
- The requirement that employees secure consent for intermittent leave for certain qualifying reasons; and
- The requirement that documentation be provided before taking leave.
The remaining provisions of the DOL’s regulations are not impacted by the decision. The federal court’s ruling significantly expands employees who are eligible for paid leave under the FFCRA.
It is unclear whether the district court’s ruling impacts employers on a national level or if the ruling is limited to the state of New York.[2] The district court’s opinion does not expressly include a nationwide injunction even though the court would be permitted to do so. Therefore, the impact of the district court’s decision on employers outside of New York is uncertain for the near future and employers are anxiously waiting for the DOL’s response. It is expected that the DOL will appeal the decision to the U.S. Court of Appeals for the Second Circuit and seek a stay of the district court’s order. However, the DOL has not commented on its course of action or offered guidance to employers outside of the state of New York. With only five months until the FFCRA expires on December 31, 2020, covered employers outside of New York are left with uncertainty in limiting federal paid leave for certain employees under the FFCRA.
As background, on March 18, 2020, Congress passed the FFCRA, which provides two types of paid leave for eligible employees impacted by the COVID-19 pandemic – the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family and Medical Leave Expansion Act (EFMLEA).[3] You can find information regarding FFCRA on the Butler Snow Coronavirus Hub here.
Under the EFMLEA, private employers with fewer than 500 employees with some exemptions and most public employers must provide employees with 12 weeks of expanded leave under the Family and Medical Leave Act (FMLA) for school closures and unavailability of childcare due to COVID-19. The first 2 weeks of EFMLEA leave are unpaid and the remaining 10 weeks are paid at two-thirds of the employee’s regular rate of pay up to certain monetary limitations.
Under the EPSLA, employers are required to provide employees who are unable to work or telework with 2 weeks (or 80 hours) of paid sick leave for the following reasons:
- the employee is subject to a federal, state, or local quarantine order;
- the employee “has been advised by a health care provider to self-quarantine due to concerns related to COVID-19”;
- the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis from a health care provider (i.e., a test) and awaiting the results of that diagnosis;
- the employee is caring for an individual who is subject to a quarantine order or whose health care provider has advised the individual to self-quarantine;
- the employee “is caring for a child whose school or place of care is closed, or whose childcare provider is unavailable, because of COVID-19”; or
- the employee “is experiencing any other substantially similar condition specified by the [U.S. Department of Health and Human Services (HHS)].”
On April 1, 2020, the same day the FFCRA took effect, the DOL issued its final rule implementing and interpreting the FFCRA. [4] You can find information regarding the DOL final rule on the Butler Snow Coronavirus Hub here. Shortly after, the state of New York filed a lawsuit challenging some of the provisions of the final rule. The state of New York claimed that the final rule violated the APA by unlawfully denying leave to otherwise eligible employees and by exceeding the DOL’s and the Secretary of Labor’s statutory authority. After briefing on cross motions for summary judgment, the federal district court in New York entered its opinion and vacated the DOL final rule related to the following areas set forth below, leaving the remainder of the final rule intact.
“Work availability” requirement
The DOL final rule prevented employees from taking paid leave under EFMLEA and EPSLA for (above) reasons 1 (subject to a quarantine or isolation order), 4 (care of an individual subject to a quarantine or isolation order) or 5 (care of a child) “where the Employer does not have work for the Employee.”[5] The DOL argued that an employee whose employer lacks work for them is not unable to work “due to” a qualifying need for leave, but instead because the employer has no work for the employee in the first place. The district court disagreed, finding that the DOL’s “barebones explanation for the work-availability requirement is patently deficient” and that the statute did not make clear that an employee’s inability to work had to be solely because of one of the specified reasons for FFCRA leave.[6]
As a result of this decision, employees who are unable to work or telework because of a covered reason are entitled to take leave even when the employer does not have available work. Thus, when an employer places an employee on a leave of absence (including as a result of a government shutdown, stay-at-home, or shelter-in-place order), the employee will be entitled to paid leave under the EFMLEA and/or EPSLA if they are also unable to work due to a qualifying reason.
Definition of “health care provider” who can be exempted
Under the FFCRA, Congress permitted employers to exclude “health care providers” from the leave benefits under the EFMLEA and EPSLA. The FFCRA expressly incorporates the existing FMLA definition of “health care provider,” but authorizes the Secretary of Labor to issue regulations further defining “health care provider” for purposes of the FFCRA. The DOL final rule broadly defines “health care providers” that can be excluded from paid leave under FFCRA as anyone employed at “any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institutions, Employer, or entity.”[7]
The district court held the DOL’s expansive definition of “health care provider” was too broad and improperly focused on the identity of the employer as a healthcare provider, rather than whether the individual employee is capable of providing health care services. The district court determined that the FFCRA “unambiguously forecloses” the DOL’s definition because the statute requires the Secretary of Labor to determine and designate persons (i.e., employees) “capable of providing healthcare services; not that their work is remotely related to someone else’s provision of healthcare services. The district court therefore vacated the Final Rule’s definition of “health care provider”.
Therefore, the district court’s decision requires employers to follow the FMLA’s existing definition of “health care provider,” which is limited to the following: doctors, podiatrists, dentists, clinical psychologists, optometrists, chiropractors, nurse practitioners, nurse midwives, clinical social workers, physician assistants, Christian Science practitioners, “[a]ny health care provider from whom an employer or the employer’s group health plan’s benefits manager will accept certification of the existence of a serious health condition to substantiate a claim for benefits,” or a “health care provider listed above who practices in a country other than the United States, who is authorized to practice in accordance with the law of that country, and who is performing within the scope of his or her practice as defined under such law.”[8]
Employer approval for intermittent leave
The DOL final rule limited intermittent leave for both EPSLA and EFMLEA to certain circumstances and only where the employee and employer agree. If the employee is working on-site, intermittent leave can only be used for employee’s need to care for a child whose school or place of care is closed, or where child care is unavailable and only if the employee and employer agrees. If the employee is teleworking, intermittent leave can be used for any qualifying reason provided the employer and employee agrees.
The district court did not take issue with the language in the final rule limiting an employee with COVID-19 symptoms, a diagnosis, or exposure from returning to intermittently to the workplace, finding it “advances Congress’s public-health objectives by preventing employees who may be infected or contagious from returning intermittently to a worksite where they could transmit the virus.”[9] The district court explained that the DOL regulations “fail[ ] to explain why employer consent is required for the remaining qualifying conditions, which concededly do not implicate the same public-health considerations.”[10] (emphasis in original). The district court held the final rule’s limitation that intermittent leave requires employer approval was “entirely unreasoned” and impermissible.[11]
In practice, the Court’s holding as to intermittent leave means that an employer must allow intermittent leave unless the employee’s specific circumstances appear to create with a higher risk of viral infection.
Submission of documentation prior to leave
Under the DOL final rule, employees must submit documentation to their employer prior to taking FFCRA leave that indicates the reason for leave, length of leave, and if pertinent, the authority for the isolation or quarantine order qualifying them for leave.[12] The district court took issue with the mandate that documentation must be provided prior to leave. The district court held that the FFCRA only requires employees to provide notice prior to taking leave, such that the final rule’s requirement that employees also provide documentation imposed a different and more stringent precondition to leave that was inconsistent with the FFCRA’s notice provision.[13]
The bottom line
The court’s decision leaves open many questions and uncertainties for employers who are trying to comply with the law. Employers should closely monitor the DOL’s response to this ruling, which could range from seeking a stay of the district court’s order, appealing the decision and/or issuing new rules or guidance. In addition, other states may file similar lawsuits following suit to challenge the DOL final rule in other areas of the country. Out of an abundance of caution and until there is clarity concerning its geographic impact, we recommend employers take a conservative approach to provide FFCRA paid leave to employees consistent with the district court’s order vacating these aspects of the DOL final rule.
[1] State of New York v. U.S. Department of Labor, et al., No. 1:20-cv-03020 (S.D. N.Y. Aug. 3, 2020). You can find the district court’s opinion here.
[2] The state of New York filed its lawsuit under the Administrative Procedure Act, which provides for a remedy that would invoke a nationwide injunction. See 5 U.S.C. §706 (allows a reviewing court to set aside unlawful agency actions.) New York did not seek this remedy, and the district court did not state whether its decision to strike certain portions of the final rule applies on a nationwide basis. However, the district court opinion “vacated” the portions of the DOL final rule it found unlawful, which could be construed to have nationwide implications.
[3] Pub. L. No. 116-127, 134 Stat. 178 (Mar. 18, 2020) (“FFCRA”) § 5102(a)(1)-(6). FFCRA can be found here.
[4] 85 Fed. Reg. 19,326 (Apr. 6, 2020). Federal Register can be found here.
[5] 29 C.F.R. § 826.20(a)(2), (a)(6), (a)(9) & (b)(1) (emphasis added). Code of Federal Register can be found here.
[6] State of New York v. U.S. Department of Labor, et al., No. 1:20-cv-03020, slip op. p. 17 (S.D. N.Y. Aug. 3, 2020).
[7] 29 C.F.R. § 826.30 (c)(1).
[8] 29 CFR § 825.125.
[9] State of New York v. U.S. Department of Labor, et al., No. 1:20-cv-03020, slip op. p. 22 (S.D. N.Y. Aug. 3, 2020).
[10] Id.
[11] Id. at 23.
[12] 29 C.F.R. § 826.100.
[13] State of New York v. U.S. Department of Labor, et al., No. 1:20-cv-03020, slip op. p. 23 (S.D. N.Y. Aug. 3, 2020).
