On August 3, 2020, in State of New York v. U.S. Department of Labor, a federal district judge in the Southern District of New York held that four parts of U.S. Department of Labor (DOL) regulations under the Families First Coronavirus Response Act (FFCRA) are invalid. Specifically, the Court stated that the DOL had exceeded its authority in (1) excluding employees whose employers do not otherwise have work for them; (2) broadly defining the meaning of “health care provider”; (3) requiring employer consent to an employee taking FFCRA leave on an intermittent basis; and (4) requiring that an employee provide documentation prior to taking leave.
While the DOL will likely appeal the decision and it may be overturned in whole or in part, employers who receive leave requests should keep in mind that these parts of the DOL regulations have now been found by one court to be invalid. Perhaps most importantly, health care providers should consider the impact of the decision before excluding certain employees from the benefits of paid FFCRA leave.
As previously reported, Congress enacted the Families First Coronavirus Response Act (FFCRA) on March 18, 2020. The FFCRA includes provisions that require employers with 500 or fewer employees to provide employees with paid sick or family leave for specified reasons related to COVID-19.
Read “Families First Coronavirus Response Act: DOL Provides Model Notice and Issues Paid Leave Guidance for Employers” »
The first major component of FFCRA leave is the Emergency Paid Sick Leave Act (EPSLA), which requires covered employers to provide eligible employees two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay if the employee is unable to work for one or more of six (6) specified reasons related to COVID-19. These qualifying events are (i) the employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19; (ii) the employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; (iii) the employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis; (iv) the employee is caring for an individual who is subject to a federal, state, or local quarantine or isolation order related to COVID-19, or the employee is caring for an individual who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; (v) the employee is caring for his or her son or daughter if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID-19 precautions; or (vi) the employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.
The second major component of FFCRA leave was the Emergency Family and Medical Leave Expansion Act (EFMLEA), which expands the Family and Medical Leave Act (FMLA) by providing a new category of leave. The new category provides paid leave for reason (v)—that the employee is unable to “work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed or the child care provider of such son or daughter is unavailable, due to a public health emergency.” An eligible employee is entitled to 10 weeks of such leave in addition to EPSLA leave.
Covered employers may take a corresponding, offsetting tax credit for most leave costs; thus, Congress subsidizes the paid leave benefits, although employers initially front the costs.
On April 1, 2020, DOL promulgated its Final Rule implementing the FFCRA. The DOL’s Final Rule is the subject of the Court’s opinion. After holding that the State of New York had legal standing to challenge the DOL regulations, the Court then turned to the merits of each of the State’s challenges to the DOL’s Final Rule.
The Work-Availability Requirement
The Court first dealt with the “work-availability requirement.” As noted, EPSLA grants paid leave to employees who are “unable to work (or telework) due to a need for leave because” of any of the six COVID-19-related criteria stated above, and EFMLEA expands paid leave under FMLA to include leave necessary to take care of a child due to school or day care closure. The Final Rule implementing each of these provisions, however, excludes from these benefits employees whose employers otherwise “do not have work” for them.
This point is significant to employers when there is no work available for employees. Are such employees entitled to paid leave under FFCRA? At least with respect to some of the categories under EPSLA and EFMLEA leave, the DOL regulations said “no” because the employee would have been unable to work, even without the qualifying event. The DOL Final Rule provides that, for each of the qualifying events (e.g., a COVID self-quarantine order, a quarantine or isolation order, the seeking of a diagnosis, caring for someone with COVID, or caring for a child due to school or day care closure), an employee would have to show that her employer would have had work for her to perform in order to qualify for paid leave.
The Court disagreed with the DOL’s Final Rule that provided leave only when the employer would have otherwise had work available to the employee. Instead, the Court held that DOL had interpreted the paid leave requirement too narrowly. The Court held that the DOL interpretation of EPSLA and EFMLEA was unreasonable and did not reflect a reasoned approach to the meaning of the leave requirements. Accordingly, the Court held, the DOL had exceeded its authority and the work-availability requirement is invalid.
Definition of “Health Care Provider”
As noted, both EPSLA and EFMLEA allow employers to exclude “health care providers” from leave benefits. The DOL interpreted this term broadly for purposes of FFCRA paid leave as anyone employed at a “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 institution, Employer, or entity.” In addition, the regulations extended the definition to employees of certain entities that contract with any “health care provider.”
The Court held that the DOL exceeded its authority because the DOL’s broad definition of “health care provider” focused on the employer, not the employee—under the FFCRA, the Court held, only an employee who is capable of providing healthcare services could be excluded from FFCRA paid leave, not all employees of such an employer. The Court held that the DOL’s interpretation was overly broad but did not attempt to redefine the term, leaving open the possibility that a more narrow definition—e.g., one limited to those directly involved in the providing of health care services—might pass scrutiny. The proper analysis, the Court holds, is “at least a minimally role-specific determination” that the “skills, role, duties, or capabilities of a class of employees” render its members “capable of providing healthcare services,” before they are categorically excluded from FFCRA paid leave benefits. As a result, healthcare providers responding to a request for leave from an employee who is not directly involved in providing healthcare services should consider the impact of this court decision, if any, on that request.
The DOL regulations allow leave to be taken intermittently (i.e., not all at once), but only with employer consent, for an employee who is caring for his or her son or daughter if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable due to COVID-19 precautions. While the Court held that limiting intermittent leave to only certain categories of employees affected by COVID-19 was permissible under the statute, the Court determined that requiring employer consent for such leave was unreasoned and therefore invalid.
The Court next reviewed the DOL’s requirement that, prior to taking leave, employees provide their employer with documentation of the need for leave, the duration of the leave, and any isolation or quarantine order that is the basis of the leave. The Court held invalid the requirement that such documentation be provided prior to taking the leave, contrary to the notice procedure Congress set out in the FFCRA. The FFCRA provides that, with respect to EFMLEA leave, “In any case where the necessity for [leave] is foreseeable, an employee shall provide the employer with such notice of leave as is practicable.” Similarly, EPSLA provides that “[a]fter the first workday (or portion thereof) an employee receives paid sick time under this Act, an employer may require the employee to follow reasonable notice procedures in order to continue receiving such paid sick time.”
As noted, the District Court’s position is not the final word on the matter. There may be further motions to be decided by the District Court, the District Court’s decision may be overturned on appeal, or other courts may disagree and uphold the DOL regulations. DOL may re-issue the regulations after further deliberation and then seek to defend the regulations on a different legal basis. However, employers should consult with counsel when leave requests are sought before relying on the DOL Final Rule, and be particularly concerned when relying on the DOL’s interpretation of work availability, the definition of a “health care provider,” requests for intermittent leave, and employee documentation required prior to leave.