S.D.N.Y. Judge Paul Oetken invalidated parts of the Department of Labor’s interpretation of the Families First Coronavirus Response Act, in a big win for the New York Attorney General, employees in New York, and possibly across the country.
The Families First Coronavirus Response Act (“FFCRA”) requires that employers provide temporary, federally subsidized paid leave to employees who develop symptoms or test positive for Covid-19, who are otherwise required to quarantine, who need to care for a family member who has become infected, or who lack childcare due to the pandemic. Congress directed the U.S. Department of Labor (“DOL”) to implement the law, and in April, the DOL released a “Final Rule”, a legally binding regulation, restricting which employees can take this leave and making it easier for some employers to prevent their employees from using it.
The New York Attorney General, Letitia James, sued the DOL in federal court, arguing that the DOL’s interpretation exceeded the agency’s authority under the Administrative Procedure Act (“APA”) and overly restricted paid leave. New York argued that, as a state, it was able to sue because it was injured by the regulation--without access to paid leave, sick employees would either opt to take unpaid leave and stay home, causing New York to lose tax revenue, or go to work and risk spreading the virus, a major public health concern.
Last week, a federal judge agreed with New York that the DOL overly restricted access to leave, and held that four provisions of the DOL’s rule are invalid.
FFCRA makes leave available for employees who cannot work or telework for one of six qualifying reasons related to Covid-19, as described above. However, under the DOL’s rule, an employer can exclude an employee from taking paid leave by claiming that it does not have work for the employee to do, provided the employee is requesting leave for one of the following reasons: (1) the employee is subject to a federal, state, or local quarantine or isolation order related to Covid-19, (2) the employee is caring for an individual who has been asked to quarantine by either a health care provider or the government, or (3) the employee must care for their child(ren) whose school or place of care is closed due to Covid-19. For example, a restaurant owner who has had to reduce operating hours and capacity could exclude an employee from taking leave for one of these reasons by arguing that there is no work for the employee to do. Due to social distancing and shelter-in-place requirements, businesses across the country have found themselves in this or similar positions.
The court invalidated this provision of the DOL’s rule because the Agency did not treat all six qualifying reasons equally, and it did not provide strong enough legal support for the extremely impactful decision to severely restrict access to this leave. Depending on how the DOL responds to the ruling, this decision indicates that at least New York employers may no longer use the work-availability exception to deny employees with a qualifying reason access to leave under FFCRA.
The Definition of “Health Care Provider”
Under FFCRA, employers of health care providers or emergency responders can elect to exclude them from the law’s benefits. FFCRA adopts the Family Medical Leave Act’s (“FMLA”) definition of “health care provider”, meaning medical doctors. However, the law also directs the Secretary of Labor to further define those who fall under the definition.
The DOL defined “health care provider” as anyone who works at a doctor’s office, hospital, medical school, nursing home, labs, and employees of companies that contract with any of these institutions to provide services to them. This is a broad definition that can encompass non-medical professionals working at a university with a medical school, including an English professor or cafeteria manager.
The court struck down this definition. The purpose of the “health care provider” exception is to keep workers essential to the public-health response in the workplace, not exclude English professors from taking leave. With this in mind, the DOL was tasked with defining which employees are capable of providing healthcare services. Instead, the rule wrongly and too broadly relied upon employers that provide healthcare services, making many non-essential personnel at essential businesses ineligible for leave. New York employers and employees will have to wait and see what new definition, if any, the DOL issues regarding which personnel beside medical doctors are ineligible for leave.
Under the DOL’s rule, employees can take leave intermittently, so long as they are not taking leave because they are ill or quarantining. However, the rule stipulated that the employer must agree to permit intermittent leave. The court disagreed, holding that there was no legal justification for requiring employer consent, and struck it down. Depending on the DOL’s next move, employees in least New York may no longer need their employer’s consent to take this leave intermittently.
The court held that to the extent the DOL’s rule required employees to provide documentation regarding the need for and duration of leave before taking the leave, it was invalid. However, FFCRA allows employers to require employees to give reasonable notice to continue receiving leave after the first day the leave is used. Accordingly, the court left intact the DOL rule’s overall requirement for documentation supporting leave.
Scope, Impact, and Remaining Questions
Employers that do business in New York and are covered by FFCRA (less than 500 employees and public employers, though businesses with less than 50 can apply for an exception as with traditional FMLA) should take the time to consider the implication of the holding for their business.
Because the paid leave is federally subsidized by tax credits, employers bear the upfront cost of compliance, creating a new and significant upfront financial burden on small and medium sized businesses who relied on the DOL’s rule in declining employees paid leave under FFCRA.
However, the full impact of this decision will remain unclear until the DOL responds to the ruling. The DOL has a few options:
FFCRA expires at the end of 2020, but continues to be a key part of the country’s pandemic response, providing much-needed flexibility to many families coping with significant disruptions to their lives due to Covid-19. Employers should exercise caution and consult with legal counsel to ensure compliance, and employees should be aware of available leave so that they may inquire about eligibility if they find that they need it.
Written by Law Clerk Kacie Candela.
Berke-Weiss Law is still offering free, 15-minute legal consultations on issues related to Covid-19. We advise both employers and employees on their rights. Schedule a time to speak with one of our attorneys.