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New York Federal Court Nixes Part Of FFCRA Leaving Employers With A Regulatory Landscape That Is Clear As Mud

8/10/20

By: Ashley Hobson

On August 3, 2020, a federal judge in the Southern District of New York threw a major curveball to employers trying to comply with the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family and Medical Leave Expansion Act (EFMLEA) when it upheld the New York Attorney General’s challenges to a part of the U.S. Department of Labor’s (“DOL”) final regulations.

Background

On March 18, 2020, Congress passed the Families First Coronavirus Response Act (FFCRA), which includes two temporary paid leave statutes – the EPSLA and the EFMLEA. On April 1, 2020, the DOL issued its regulations implementing and interpreting the FFCRA. 

Shortly thereafter, the State of New York filed suit against the DOL in federal court in New York, specifically challenging four specific regulations:

  1. The “work-availability” requirement;
  2. The definition of “health care provider;”
  3. Provisions relating to intermittent leave; and
  4. The temporal aspect of the documentation requirement.

After briefing by both parties, the District Court ruled that the above-mentioned regulations were unreasonable and will no longer be enforceable. Now, as discussed in more detail below, the more pressing question is whether the District Court’s Order applies just to employers in New York or employers across the nation.

Work Availability

The Emergency Paid Sick Leave Act grants paid leave to employees, but only if they are unable to work due to a need for leave because of 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. has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  3. is experiencing symptoms of COVID-19 and seeking medical diagnosis;
  4. is caring for an individual subject to a quarantine or isolation order by the government or a healthcare provider;
  5. 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. 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.

If, however, the employee is out of work because he or she is on a furlough, even if the employee otherwise meets one of the six qualifying COVID-19 related conditions while on furlough, the DOL’s regulations provide that the employee does not qualify for EPSLA and/or EFMLEA leave in three circumstances. 

Specifically, the DOL’s final regulations provide that employees using EPSLA and/or EFMLEA under reasons 1 (subject to a quarantine or isolation order), 4 (care of an individual subject to a quarantine or isolation order) or 5 (care of a child) may not take paid leave “where the Employer does not have work for the Employee.” This effectively means that, where an employee is out on furlough, that employee would not be eligible for EPSLA or EFMLEA leave even if the employee otherwise qualified under one of the three reasons identified above.

The state of New York challenged the DOL’s “work availability” requirement in these three circumstances, arguing that the DOL’s interpretation was not authorized by the clear language of the FFCRA. The Court agreed and effectively struck down the DOL’s “work availability” requirement.

Definition of “Health Care Providers”

The DOL’s regulations also permitted employers to refuse to provide paid leave to employees who are defined as “health care providers.” The Court found the definition to be so broad that it would appear to encompass an “English professor, librarian, or cafeteria manager at a university with a medical school.” In other words, the definition of “health care provider” is so broad that it includes personnel who have “no nexus whatsoever to the provision of healthcare services, except the identity of their employers.” As a result, the Court struck down the DOL’s definition of “healthcare providers.”

Intermittent Leave

The third regulation challenged by the State was the requirement of intermittent leave. The DOL’s regulations permit “employees to take Paid Sick Leave or Expanded Family Medical Leave intermittently…only if the Employer and Employee agree,” and if the following qualifying conditions are met. 

  1. the employee and employer agree to the use of intermittent leave; and
  2. if the employee is working on the employer’s premises, the use of intermittent leave is limited to the employee’s need to care for a child whose school or place of care is closed, or where child care is unavailable

The idea behind limiting the use of intermittent leave to these scenarios was to help employers keep sick employees out of work. In assessing the DOL’s argument, the Court agreed with the DOL that intermittent leave should be limited to those circumstances where there is no risk that the employee might spread the virus to others. The Court, nevertheless, concluded that the DOL did not articulate why employer consent was necessary in other circumstances where the risk of spreading the virus was low.

Temporal Aspect of Documentation Requirement

The last regulation that was challenged by the State of New York was the requirement that, prior to taking FFCRA leave, the employee must provide the employer with documentation that states the “reason for the leave, the duration of the requested leave, and when relevant, the authority for the isolation or quarantine order qualifying them for leave.” The State claimed that the FFRCA already contains a provision that lists a notice requirement for taking paid leave and the DOL’s additional regulation requiring prior notice was not supported by the FFCRA.

What’s Next? As the Court’s opinion is just a few days old, it remains to be seen whether the DOL will appeal the decision or simply issue new regulations that address the concerns raised by the Court. In the interim, questions abound as to whether the Court’s opinion applies only to employers in New York or throughout the United States. As these are very real issues to navigate, please contact one of our Labor and Employment team members to discuss the next steps in more detail.

If you have questions or would like more information, please contact Ashley Hobson at ahobson@fmglaw.com.

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