U.S. District Court Strikes Down Portions of Department of Labor’s Families First Coronavirus Response Act Final Rule
On August 3, 2020, the U.S. District Court for the Southern District of New York issued a decision in the case of State of New York v. U.S. Department of Labor, et. al., striking down four provisions of the U.S. Department of Labor’s (DOL) Final Rule implementing the Families First Coronavirus Response Act (FFCRA) on the ground that they exceed the DOL’s authority under the Administrative Procedure Act. The Court invalidated the Final Rule’s provisions that:
- Render employees ineligible for FFCRA benefits if their employers do not have work for them;
- Exclude as healthcare providers persons who are not capable of providing healthcare services;
- Require employer consent for an employee to take intermittent leave; and
- Require employees to submit documentation supporting the reason for leave prior to taking leave.
The FFCRA consists of the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family and Medical Leave Expansion Act (EFMLEA).
The EPSLA requires employers with fewer than 500 employees, and certain public employers, to provide up to 80 hours of paid leave to employees if they are unable to work (or telework) because they are:
- Subject to a federal, state or local quarantine or isolation order related to COVID-19;
- Advised by a healthcare provider to self-quarantine due to concerns related to COVID-19;
- Experiencing symptoms of COVID-19 and seeking a medical diagnosis;
- Caring for an individual who is subject to a quarantine or isolation order issued by the government, or has been advised to quarantine or isolate by a healthcare provider;
- Caring for a child whose school or place of care is closed, or whose child care provider is unavailable because of COVID-19; and
- Experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and Secretary of Labor.
The EFMLEA requires employers with 500 or fewer employees to provide employees with an additional 10 weeks of leave if they are unable to work (or telework) due to a need to care for a child under 18 years of age – if the child’s school or place of care has been closed, or the child’s care provider is unavailable – because of COVID-19.
The EPSLA and EFMLEA also exclude from their coverage any “healthcare provider.” In the Final Rule, the DOL broadly defined the term “healthcare provider” so as to exclude from coverage under both laws not only persons who are capable of providing healthcare, but all persons employed by any entity providing medical services or instruction, regardless of whether such persons are capable of providing healthcare themselves.
The Court’s Decision
Work Availability Requirement
The Court struck down the Final Rule’s “work availability requirement,” which requires that the employer have work available for an employee to be eligible for leave benefits. The Court disagreed with the DOL’s position that the EPSLA and EFMLEA’s provisions – that employees are eligible for leave only if they are “unable to work (or telework) due to a need for leave” for the reasons listed in the provisions – means that the listed reasons must be the only reasons the employee cannot work. Instead, the Court found that under the statutory language, there can be multiple reasons for an employee’s inability to work, and that the existence of a non-covered reason, such as an employer not having work available, does not preclude an employee from qualifying for leave if the employee is otherwise unable to work for one of the covered reasons. As a result, furloughed employees may be entitled to leave under the EPSLA and EFMLEA.
Definition of Healthcare Provider
The Court invalidated the Final Rule’s definition of “healthcare provider” on the ground that it is “vastly overbroad” because it “includes employees whose roles bear no nexus whatsoever to the provision of healthcare services, except the identity of their employers, and who are not even arguably necessary or relevant to the healthcare system’s vitality.” For example, the DOL asserted in defense of its definition that even an English professor at a university with a medical school would be excluded from eligibility for leave under the Final Rule as a healthcare provider. As a result, the Court ruled that only an employee “capable of furnishing healthcare services” qualifies as a “healthcare provider” who can be excluded from leave eligibility.
The Court also vacated the provision of the Final Rule requiring employer permission for an employee to use intermittent leave under the EPSLA and EFMLEA. The Court agreed with the DOL’s position that limits intermittent leave to situations where there is a low risk that the employee will spread COVID-19 in the workplace, but found that it is unreasonable to require an employer’s consent for an employee to use intermittent leave. Accordingly, the Court held that an employer must allow intermittent leave at an employee’s discretion, unless the circumstances create a higher risk of COVID-19 infection in the workplace, such as where an employee is subject to an order of quarantine or isolation, or has been advised to so quarantine or isolate by a healthcare provider.
Lastly, the Court negated the Final Rule’s requirement that prior to taking leave, employees submit documentation indicating their reason for leave, the duration of the leave and when relevant, the authority for the quarantine or isolation order qualifying them for leave. The Court found that the DOL’s requirement that employees provide supporting documentation before taking leave conflicts with the plain language of both the:
- EPSLA, which only requires employees to follow their employers’ reasonable notice procedures after the first day of leave; and
- EFMLEA, which only requires such notice as is practicable when leave is foreseeable.
What Is the Effect on Employers?
The effect of the Court’s decision on employers is unsettled. At this time, the decision only applies to employers within the Southern District of New York (the counties of Bronx, Dutchess, New York, Orange, Putnam, Rockland, Sullivan and Westchester). However, federal courts in the rest of the Second Circuit – New York, Connecticut and Vermont – and other states may be inclined to follow it if presented with the same issues. It is also likely that the DOL will appeal the decision to the Second Circuit, and an order staying enforcement of the decision might be issued. Accordingly, going forward, employers should act cautiously in applying the EPSLA and EFMLEA, and should consult with their labor and employment counsel to ensure compliance to the fullest extent possible.
Additionally, to the extent an employer is subject to the decision, its holding that furloughed employees are eligible for leave means that such employees must be counted for purposes of determining whether an employer qualifies as having fewer than 500 employees and is, therefore, subject to the EPSLA and EFMLEA. If including furloughed employees who were previously excluded pushes an employer’s employee count to 500 or more, it may be exempted from coverage under those laws.