On August 3, the Federal District Court for the Southern District of New York issued a decision invalidating several features of the Department of Labor’s (“DOL”) Final Rule implementing the Families First Coronavirus Response Act (“FFCRA”). The decision addressed whether the DOL, which was tasked with creating rules to implement both the Emergency Paid Sick Leave Act (“EPSLA”) and the Emergency Family and Medical Leave Expansion Act (“EFMLEA”) contained in the FFCRA, exceeded the scope of its authorization in the following features of its Final Rule:
- The work availability requirement;
- The definition of “health care provider”;
- The intermittent leave requirement; and
- The documentation requirement.
Under the EFMLEA, an employee is entitled to paid leave when he or she is unable to work or telework because he or she must care for a child due to COVID-19-related school or childcare closures. Under this leave, the first ten days may be unpaid; however, after ten days, covered employers must pay the employee for qualifying leave from work at a rate of two-thirds of the employee’s regular pay for up to ten weeks, subject to a $200 per day and $10,000 aggregate maximum payout.
Under the EPSLA, an employee may receive up to 80 hours of paid leave for one of six qualifying conditions: (1) the employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19; (2) the employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; (3) the employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis; (4) the employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2); (5) the employee is caring for a son or daughter of such employee 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; (6) the employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
The Work Availability Requirement
The Final Rule excuses an employer from providing paid leave under EFMLEA or EPSLA if the employer “does not have work” for the employee. New York State challenged this feature, arguing that the FFCRA does not authorize the DOL to create such a requirement. The DOL argued that the language of the statute explicitly authorizes the work availability requirement. Under the FFCRA, employees are entitled to EPSLA paid leave if they are “unable to work (or telework) due to a need for leave because of” one of six listed criteria. (FFCRA § 5102(a).) Similarly, EFMLEA applies to employees who are “unable to work or telework due to a need for leave to care for [a child] due to a public health emergency.” (FFCRA § 101(a)(2)(A).) The DOL believed that the terms “due to” and “because” create a but-for causal relationship and as such, the qualifying reason for taking leave must be the reason the employee is not working.
Finding that the statute was ambiguous, the court analyzed whether the DOL’s interpretation of it was reasonable. The court recognized that the work availability requirement “is hugely consequential for the employees and employers covered by the FFCRA because the COVID-19 crisis has occasioned the temporary shutdown and slowdown of countless businesses nationwide, causing, in turn, a decrease in work immediately available for employees who would otherwise remain formally employed.” (Order at 11.) The court explained that the DOL’s interpretation was not reasonable because it did not have sufficient justification for applying a “monumental policy decision” with such a far-reaching impact.
Definition of Health Care Worker
The FFCRA also permits employers to deny “health care providers” paid leave benefits. However, the court found the DOL’s interpretation of which employees qualify as “health care providers” was broader than the FFCRA allows. The FFCRA relies on the Family Medical Leave Act’s (“FMLA”) definition of “health care provider,” which defines the term 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.” (29 U.S.C. §2611(6).)
For purposes of the FFCRA, however, the DOL’s Final Rule defined “healthcare workers” as:
[A]nyone 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.
The court found that this definition was outside of the scope of the authority granted the DOL under the FFCRA because subsection (B) directs the Secretary to define a “person” capable of providing health care services. DOL’s definition, on the other hand, focuses on all of the employees of a given employer. While recognizing that the COVID-19 pandemic may support an expanded definition of the term to ensure sufficient healthcare workers are available to meet public health needs, the court held that the view taken by the DOL exceeded even an expanded scope of authority.
Intermittent Leave
The Final Rule permits employees to take intermittent paid leave under certain qualifying circumstances if the employer consents. It does not allow intermittent EFMLEA leave for qualifying circumstances that relate to the contraction of or exposure to COVID-19. The court agreed with the DOL that it had the authorization to create this policy because the FFCRA does not address intermittent leave at all, which is “precisely the sort of statutory gap, … that DOL’s broad regulatory authority empowers it to fill.”
The court then examined whether the feature of the Final Rule was reasonable. Under the Final Rule, if a person takes leave for reasons related to a risk of infection, that person must take the days of leave consecutively until he or she no longer has a qualifying reason. The court agreed that the policy is logical because it encourages employees to stay home if there is a risk they will infect others with COVID-19. Other qualifying reasons, such as caring for a child whose school has closed, do not carry that same risk.
The court did, however, find the employer consent requirement to be invalid because it is not supported by a reasonable justification. According to the court, intermittent leave may be necessary to reduce the potential for infection in a household, which will translate to reduced potential for infection in the workplace.
Documentation Requirements
Finally, the court found that while the type of documentation required by the Final Rule was acceptable, the timing for the notice was not consistent with the statute. The FFCRA requires that employees give notice of their intent to take EFMLEA as soon as is practicable. For employees taking EPSLA, the FFCRA allows for employees to take the first day (or portion thereof) of sick leave before any reasonable notice procedures take effect. The court found that the feature of the DOL’s Final Rule requiring employees to provide documentation prior to taking the leave was patently inconsistent with the express language of the statute, and therefore invalid.
Impact on Employers
The invalidation of the portions of the DOL Final Rule discussed above presents a significant change to the practices employers have been following to comply with the FFCRA. The New York court did not issue a nationwide injunction for application of the order, and the effect that this ruling will have outside the state of New York is not clear. Employers should consider this ruling as a point of caution and are encouraged to consider altering their policies to be consistent with this decision.
This situation is likely to develop further in the coming weeks. The DOL may appeal to the Second Circuit Court of Appeals, or it may revise its guidelines. Kronick will continue to monitor the state of the law and provide updates as they arise.
Questions
If you have any questions regarding this Legal Alert, please contact the following attorneys from our office or the attorney with whom you typically consult.
David Tyra
dtyra@kmtg.com | 916.321.4594