In a decision potentially impacting all employers covered by the Families First Coronavirus Response Act (FFCRA), a federal court upended some of the employer-friendly limitations set forth in the U.S. Department of Labor’s (DOL) implementing regulations (i.e. the “Final Rule”): (1) the work-availability requirement, (2) the broad exemption for health care providers, (3) employer approval of intermittent leave, and (4) the documentation requirement. Below, we first summarize the Court’s decision and then discuss the practical effect of this decision on employers.
Background. In the context of the COVID-19 pandemic, Congress passed the FFCRA, which, among other things, imposed two leave mandates on employers with fewer than 500 employees: (1) a two-week emergency paid sick leave (“EPSL”) mandate for employees who are unable to work or telework due to six specific COVID-19-related reasons; and (2) a temporary expansion of coverage under the Family and Medical Leave Act (FMLA), including a ten-week paid leave requirement, for school and child care closures associated with COVID-19 (EFMLA). Significantly, employers are reimbursed for the cost of the leave through a tax credit. The DOL issued a Final Rule that limited the availability of paid leave under the FFCRA. The State of New York filed suit, State of New York v. U.S. Department of Labor, challenging the limiting rule as exceeding the authority of the DOL and unlawfully restricting the intended coverage of the FFCRA.
No Work-Availability Requirement Is Permitted. The FFCRA Final Rule expressly provides that employees are not entitled to EPSL for three of the six listed reasons, nor to any EFMLA leave, if their employer “does not have work” for them. In support of its Final Rule, the DOL argued that, under such circumstances, the employee would not be able to work regardless of their need for EPSL or EFMLA leave.
The Court, however, rejected the DOL’s argument. It found the differential treatment of the six EPSL reasons “entirely unreasoned” and “manifestly contrary to the statute’s language, given that the six qualifying conditions share a single statutory umbrella provision…” It further found the DOL’s explanation for the work-availability requirement “patently deficient,” characterizing it as a “terse, circular regurgitation of the requirement.” Consequently, according to the Court, the work-availability requirement was not a permissible interpretation of the statute.
The Health Care Provider Exemption Is Too Broad. The FFCRA created an exemption by which employers could exclude “health care providers” from the paid leave mandates. The FFCRA incorporated the definition existing in the FMLA, but authorized the Secretary of Labor to issue regulations further defining those “health care providers.”
Under the FMLA, a “health care provider” is defined as “(A) a doctor of medicine or osteopathy who is authorized to practice medicine or surgery (as appropriate) by the State in which the doctor practices; or (B) any other person determined by the Secretary to be capable of providing health care services.” In effectuating the latter provision, the existing FMLA regulations define the term “health care provider” as doctors and other higher-level medical professionals. It does not include lower-level direct care providers such as registered nurses, GNAs, CNAs, medical technicians, and the like.
The FFCRA Final Rule, however, went far beyond the original FMLA regulations to set forth a broad definition that included all employees of an organization providing health care services. The definition included supply chain entities and contractors.
In rejecting this definition as “vastly overbroad,” the Court turned back to the FMLA’s original statutory language and held that “the Secretary’s determination must be that the person is capable of providing healthcare services; not that their work is remotely related to someone else’s provision of healthcare services.” (Emphasis in original). According to the Court, however, the DOL’s FFCRA Final Rule incorrectly focused on the employer’s identity rather than the employee’s duties in proffering a definition that “includes employees whose roles bear no nexus whatsoever to the provision of healthcare services, except the identity of their employers…” (Emphasis in original).
Employer Approval Is Not Required for Intermittent Leave. The Court first confirmed that FFCRA leave need not be taken in a single block, with any unused leave forfeited. Rather, it may be taken in various blocks for separate qualifying conditions, as long as the employee has leave remaining.
The Court agreed with the DOL’s position that, in some instances, intermittent leave is entirely barred for public health concerns, when conditions “logically correlate with a higher risk of viral infection.” Thus an employee who has symptoms of, a diagnosis of, or has been exposed to COVID-19 may not return intermittently to the workplace as they could transmit the virus.
The FFCRA Final Rule provides that intermittent leave may apply in other circumstances that “do not implicate the same public-health considerations” – but only with employer approval. This limitation, however, was rejected by the Court, as “entirely unreasoned.” Given the lack of rationale, the employer approval requirement was therefore impermissible.
Documentation May Not Be Mandated Prior to Taking Leave. The FFCRA Final Rule requires employees to submit certain documentation regarding the need, duration, and (in some circumstances) governmental authorization for leave, prior to taking the leave. The Court found this requirement to be inconsistent, however, with the FFCRA’s notice provisions. The EFMLA allows an employee to provide notice of their need “as is practicable.” Moreover, the EPSL 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.” Because the documentation requirement “imposes a different and more stringent precondition to leave” than the statutory notice requirements, it “cannot stand.”
What This Means for FFCRA-Covered Employers. Notably, although the decision was issued in a case brought in a New York federal district court by the State of New York, it may have nationwide impact. The federal Administrative Procedures Act sets forth the standards by which agencies like the DOL may issue regulations (i.e. the Final Rule). It also identifies the instances in which such regulations, or portions thereof, must be vacated or set aside, including the reason in this case – that the action was “in excess of [the agency’s] statutory jurisdiction, authority or limitations.” Thus, arguably, the effect of the court’s decision is that the challenged portions of the rule cannot stand anywhere – not just in New York. The DOL has yet to publicly comment on this decision. If it concedes that the regulations were overbroad, then employers across the U.S. should observe the court’s ruling. It is possible, however, that DOL will take the position that the ruling applies only to New York State. Then it becomes a question of whether other courts in other jurisdictions will find the New York decision to apply nationwide, whether they will find the New York decision to be persuasive as to their jurisdiction, or whether they will reject the New York decision and allow employers to rely on the existing regulations.
It is also possible that the DOL will appeal the decision to the U.S. Court of Appeals for the Second Circuit, which has the ability to stay (or put on hold) the lower court order pending the appeal. If there is no appeal, or if the Second Circuit does not stay the order, and other courts either apply or follow the original decision, then the practical impact of this decision would be a significant change in how FFCRA leave is administered with regard to these provisions, as follows:
- Work-Availability Requirement – Whether the employer has available work would no longer be relevant to the employee’s eligibility for FFCRA leave. Thus, as long as the employee meets one of the listed reasons for EPSL or EFMLA, they would be entitled to take the leave even if the employer has no work for them. This would apparently include when the employee has been placed on a temporary leave (which may arguably include a furlough or temporary layoff) due to a lack of work or reduced business, including from a governmental shut-down, stay-at-home, or shelter-in-place order. Note that FFCRA is not available simply because there is no work – the employee must also be unable to work or telework because of an FFCRA reason.
The consequence of the Court’s ruling may be particularly problematic for employers who end up having to temporarily shutter their business because of a shut-down, stay-at-home, or shelter-in-place order. Before, employees would not be entitled to FFCRA leave during that closure. Now, however, the order itself, which causes the closure, may also trigger EPSL since the definition of a qualifying “quarantine or isolation order” specifically includes such governmental orders.
- Exemption for Health Care Providers – Because the DOL’s expanded definition has been rejected, the FMLA’s existing regulatory definition would apply. Under the Court’s ruling, the only health care providers eligible for the exemption will be the following: doctors, podiatrists, dentists, clinical psychologists, optometrists, chiropractors, nurse practitioners, nurse-midwives, clinical social workers, physician assistants, Christian Science Practitioners, and any health care provider accepted by the employer’s group health (or equivalent) plan. As noted above, lower-level direct care providers such as registered nurses, medical technicians, certified nursing assistants, and the like would not be excluded from coverage and would be entitled to EPSL and EFMLA leave.
- Intermittent Leave – According to the Court’s ruling, employer approval is no longer required before an employee takes certain leave intermittently. For example, an employee may opt to take EPSL and/or EFMLA due to school/child care closure on an intermittent basis. In addition, if an employee can telework, they may also take EPSL on an intermittent basis for illness-related reasons, since there is no risk of exposing others in the workplace.
- Documentation – According to the Court’s ruling, employers cannot necessarily require employees to submit documentation prior to taking leave. If the need for leave is foreseeable, such as for the closure of a school or child care, both notice and the documentation can be required in advance. In other circumstances involving illness, however, both the notice and the documentation may be submitted after the employee begins leave.
These changes also mean that a number of the DOL’s very detailed Families First Coronavirus Response Act: Questions and Answers are no longer valid.
This is obviously a fast-moving and ever-changing situation, and we will continue to send out E-Lerts on any significant developments. You may also wish to check our continually-updated FAQs frequently.