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FFCRA Regulations Struck Down by New York Federal Court


On August 3, 2020, the U.S. District Court for the Southern District of New York (the Court) invalidated four key components of the U.S. Department of Labor (DOL) regulations concerning the paid leave provisions of the Families First Coronavirus Response Act (FFCRA). While the Court’s decision may significantly expand the FFCRA’s paid leave rights for many employees, it leaves many important questions unanswered, creating uncertainty for employers.

As detailed in our prior legal update, the FFCRA was signed into law on March 18, 2020, and requires employers with fewer than 500 employees to provide emergency paid leave to eligible employees for certain reasons related to COVID-19. On April 1, the DOL published its final rule (the Final Rule) implementing and interpreting the paid leave requirements of the FFCRA. Shortly thereafter, the State of New York filed a lawsuit claiming that several features of the DOL's Final Rule exceed the agency's authority under the statute.

The Court struck down four provisions of the DOL's Final Rule: (1) the exclusion from benefits of employees whose employers do not have work for them; (2) the definition of who qualifies for the healthcare provider exemption; (3) the requirement that employees secure consent for intermittent leave for certain qualifying reasons; and (4) the requirement that documentation be provided before taking leave. The ruling applies only to these four challenged aspects of the DOL’s Final Rule. The other provisions of the regulation remain in effect. 

1. The Work-Availability Requirement

Under the FFCRA, employers are required to grant leave to eligible employees who are “unable to work (or telework) due to a need for leave because” of certain COVID-19 qualifying reasons. In its Final Rule, the DOL interpreted this language to mean that employees are not entitled to FFCRA leave if their employer has no work available for them, irrespective of any qualifying condition. The Court, however, struck down the Final Rule’s work-availability requirement, finding the DOL’s explanation for the requirement to be “patently deficient”. According to the Court, the work-availability requirement is inconsistent with the FFCRA’s intended purpose “to protect the economic well-being of workers while stopping the spread of COVID-19” because it impermissibly narrows the statute's potential scope.

As a result of the Court’s ruling, employers may be required to provide FFCRA leave even when the employer does not have available work for the employee. For instance, if an hourly employee’s hours were reduced because of a COVID-19-related business slowdown, the employee may now be entitled to leave, even if the employee is not scheduled to work. Notably, the Court did not address how its decision will apply in a temporary layoff or furlough situation. This uncertainty opens the door for leave requests by employees who are furloughed or temporarily laid off or whose employers have had to temporarily cease operations due to the pandemic. The Court’s decision may also create substantial challenges in determining whether employers are covered by FFCRA. For example, if furloughed employees are now eligible for leave, then they must be counted for purposes of determining whether a company falls within the FFCRA’s 500-employee threshold. Additional guidance from the DOL on this point will be critical.

2. The Definition of “Health Care Provider”

In an effort to maintain a functioning health care system during the pandemic, the FFRCA grants employers the option to exclude certain health care providers from the paid leave benefits. The FFCRA expressly incorporates the existing Family and Medical Leave Act (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. In its Final Rule, the DOL exercised this authority to broadly define “health care providers” as essentially anyone who works for or contracts with a healthcare-related institution.

The Court noted that the DOL’s expansive definition improperly focuses on the identity of the employer, rather than the skills, role, duties or capabilities of certain employees, and as a result, employers could choose to deny FFCRA leave to a large number of employees who are not directly engaged in providing health care services. The Court pointed out, for example, that even “an English professor, librarian, or cafeteria manager at a university with a medical school would all be ‘health care providers’ under the Rule.” Thus, the Court struck down the DOL’s “vastly overbroad” definition, concluding that the FFCRA requires at least “a minimally role-specific determination” that the “person is capable of providing healthcare services; not that their work is remotely related to someone else’s provision of healthcare services.”

Because the Court did not supply an alternative definition, it is unclear what definition of “health care provider” employers should use for purposes of the FFCRA. Until the DOL issues additional guidance, the term is likely limited to how it is defined under the FMLA: “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 any other person determined by the Secretary to be capable of providing health care services.” As a result, the health care provider exemption has been dramatically narrowed, expanding FFCRA leave rights to a wider range of employees working for health care providers.

3. Intermittent Leave

The DOL's Final Rule allows employees to take FFCRA leave intermittently only in circumstances where there is minimal risk that the employee will spread COVID-19 to other employees, and only if the employer agrees to permit it. Although the Court agreed with the DOL’s complete ban on intermittent leave when conditions present an increased risk of transmitting the virus, the Court struck down the requirement that an employee must secure employer consent for intermittent leave, finding that the DOL had failed to provide a reasoned justification for requiring employer consent. Accordingly, employees may choose to take FFCRA leave intermittently, without prior approval from their employer, in situations where intermittent leave is generally permitted under the DOL’s regulations (i.e., when the employee takes leave to care for a child whose school or place of care is closed or unavailable, or when the employee is teleworking and there is no risk of exposing others in the workplace).

4. Documentation Requirement

Under the FFCRA, an employee seeking emergency family leave is required to provide the employer with notice of such leave as is practicable under the circumstances where the necessity for leave is foreseeable, and an employee seeking paid sick leave is required to follow the employer’s reasonable notice procedures after the first workday missed in order to continue receiving such paid sick leave. The DOL’s Final Rule, however, imposes a more stringent prerequisite to FFCRA leave by requiring employees to submit certain supporting documentation prior to taking leave. The Court held that requiring an employee to furnish documentation before taking leave was in direct conflict with the notice provisions of the FFCRA. While the court struck down the temporal aspect of the DOL’s documentation requirement, it left intact the Final Rule's substantive documentation requirements to support the need for leave. Thus, employers may still require that employees provide substantiating documentation as set forth in the DOL's regulations, but they may not require such documentation be provided as a precondition to granting FFCRA leave.

Unfortunately, the Court’s decision leaves many questions unanswered for employers who are trying to comply with the law. First and foremost, the Court did not indicate whether its ruling is limited to the state of New York or applies on a nationwide level. In addition, the decision may not be final, as the DOL is likely to appeal the ruling to the Second Circuit Court of Appeals and seek an emergency stay of the ruling pending appeal. Alternatively, if the DOL decides to comply with the court’s decision, it may modify its Final Rule accordingly or issue new regulations and interim guidance. Further, pending an appeal or additional rulemaking, it remains unclear whether the DOL will adjust enforcement of the affected regulations and whether businesses may retroactively be held liable if they denied prior leave requests in reliance on the now vacated aspects of the DOL’s Final Rule.

Until the DOL acts to address the Court’s ruling, all employers covered by the FFCRA should review their current FFCRA policies, practices, and procedures and exercise caution before making leave decisions in a manner inconsistent with the Court’s ruling. MMM will be tracking the decision through the anticipated appellate process and monitoring for DOL announcements regarding possible updates to its regulations.

For assistance navigating the Court’s decision, or for more information about how it could specifically impact your company, please contact the MMM Employment Team.