On April 1, 2020, the Department of Labor issued its Final Rule implementing the Families First Coronavirus Response Act (FFCRA), pursuant to the authority it was granted under the law to issue regulations the implement the statute.  The State of New York filed a lawsuit (State of New York v. United States Department of Labor, et al.) challenging four aspects of the DOL’s regulations set forth in the Final Rule: (1) the “work-availability” requirement, (2) the DOL’s definition of “health care provider,” (3) the DOL’s provisions related to intermittent leave, and (4) the DOL’s documentation requirements.  The Southern District of New York Court’s ruling issued on August 3, 2020, could have a huge impact on how employer implement aspects of the FFCRA, and creates even more confusion regarding employers’ obligation under the new law.

This litigation involves two major provisions of that law: the Emergency Family and Medical Leave Expansion Act (“EFMLEA ”) and the Emergency Paid Sick Leave Act (“EPSLA”).

The EPSLA requires covered employers to provide paid sick leave to employees with one of six qualifying COVID-19-related 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 subject” to a quarantine or isolation order by the government or a healthcare provider; (5) the employee is caring for a child whose school or place of care is closed, or whose childcare provider is unavailable, because of COVID-19; or (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 EFMLEA grants paid leave to employees who are unable to work because they must care for a dependent child due to COVID-19.  See FFCRA §§ 3102(a)(2); 3102(b).  The employer is entitled to a tax credit to off set the costs of the qualifying paid EFMLEA leave.  The EFMLEA permits employers to exclude “an employee who is a health care provider or emergency responder” from the benefits provided by the EFMLEA.

1. Exclusion of employees for benefits under the FFCRA if employer lacks works for employees

The EPSLA grants paid leave to employees who are “unable to work (or telework) due to a need for leave because” of any of six COVID-19-related criteria.  The EFMLEA similarly applies to employees “unable to work (or telework) due to a need for leave to care for . . . [a child] due to a public health emergency.”  The Final Rule implementing each of these provisions excludes from these benefits employees whose employers “do[] not have work” for them.

The Court rejected the DOL’s Final Rule regulations in holding that the regulations were not “reasoned decision-making” and invalidated the DOL’s regulation.  This holding has a large potential impact on employers.  If the Court’s decision stands, employers who have had to close their businesses during COVID-19 would still be obligated to provide employees with paid sick leave under the FFCRA.

2. Definition of “Health Care Provider”

New York also challenged the definition of “health care provider” issued under the DOL’s Final Rule.  The FFCRA permits employers to exclude “health care providers” from leave benefits, the definition has importance to many employers.  The DOL’s definition included “anyone employed” at a doctor’s office, hospital, health care center, or other facilities “where medical services are provided.”  The Court held that this definition was too broad “in that it includes employees whose roles bear no nexus whatsoever to the provision of healthcare services.”

3. Intermittent leave

New York next challenged the DOL’s regulation that permitted intermittent leave by the employee “only if the Employer and Employee agree.”  The Court found that the requirement of “employer consent for intermittent leave…is entirely unreasoned” and therefore invalid.

The Court did however, agree with the DOL’s regulations that prohibit employees from taking intermittent leave “based on qualifying conditions that implicate an employee’s risk of viral transmission.”  For example, intermittent leave by an employee is not permitted when the employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19, or is experiencing symptoms of COVID-19 and are taking leave to obtain a medical diagnosis.

4. Documentation requirements

The DOL’s Final Rule requires that employees submit documentation to their employer prior to taking leave.  The Rule sets forth that employees must document the reason for leave, the duration of the requested leave, and, when relevant, the authority for the isolation or quarantine order qualifying them for leave. See Final Rule at 19,355 (§ 826.100).  The Court held that the documentation requirements set forth by the DOL “to the extent they are a precondition to leave, cannot stand.”  The FFCRA permits that “[a]n Employer may require an Employee to follow reasonable notice procedures after the first workday (or portion thereof) for which an Employee takes Paid Sick Leave for any reason other than that described in § 826.20(a)(1)(v).”  Therefore, the Court held that the documentation requirements only prohibit documentation requests as a precondition to leave.

5. What does this mean for employers?

This New York decision creates more questions for employers already struggling to comply with the new requirements under the FFCRA (and comply with many other state and local requirements here in California).  Here are a few thoughts on how this may impact employers:

• Since the decision was issued by a court in the Southern District of New York, the applicability of the decision is likely limited to New York employers (maybe arguably employers in the 2^nd Circuit). In addition, if the DOL appeals the decision, the ruling could be stayed pending the appeal.
• The FFCRA expires at the end of 2020. If the DOL appeals the decision, there may not be any clear guidance on what standards employers should use in implementing FFCRA policies and standards.
• Employers outside of New York and the 2^nd Circuit could expect to see challenges to the DOL’s Final Rule in their jurisdictions. However, as mentioned above, the FFCRA expires at the end of 2020, so any decision would likely be after the expiration of the law.  This puts employers in a difficult position of not having clear guidance on what their obligations are under the law until after the law expires.  Employers subject to the FFCRA should approach this issue with caution, continue to monitor any developments, and seek legal advice regarding their obligations.