FFCRA: What Does the Recent US District Court Decision Mean for Employers?

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Attorney Harrison Oldham

On Monday, August 3, 2020, the U.S. District Court for the Southern District of New York vacated several employer friendly provisions of the U.S. Department of Labor’s (DOL) “Final Rule” regarding the Families First Coronavirus Response Act (“the Act” or “FFCRA”).

In the decision, the Court addresses four provisions of the Final Rule: (1) the “work availability” requirement; (2) the definition of “health care providers” who may be excluded from FFCRA eligibility; (3) the requirement for employer consent to intermittent leave; and (4) the advance documentation requirements.

At this point, the impact of this decision is unclear. If the decision stands (the DOL may appeal), it would have the effect of substantially enlarging FFCRA leave entitlements beyond what the DOL contemplated in its Final Rule. It could also encourage employees who were denied leave previously to seek those benefits retroactively or prospectively, including by making claims.  Further, unless and until the DOL issues replacement regulations, employers will have to navigate the regulatory gaps created by the now-invalidated rules.

Regardless of your location, employers covered by the FFCRA are advised to take notice of this ruling and revise your current practices as needed. In the meantime, employers who do not heed the Court’s interpretation of the Act are at risk of non-compliance and associated penalties and liability.

As A Quick  Reminder:

The Act mandates that covered employers provide paid leave pursuant to the Emergency Paid Sick Leave Act (EPSLA) and Emergency Family Medical Leave Expansion Act (EFMLA).  Under the EPSLA, employees are entitled to up to 80 hours of paid leave if they are unable to work (or telework) due to a need for leave because:

  • they are subject to a government quarantine/isolation order related to COVID-19;
  • they were advised by a healthcare provider to self-quarantine due to COVID-19 concerns;
  • they are experiencing symptoms of COVID-19 and seeking a diagnosis;
  • they are caring for an individual who is subject to a government quarantine/isolation order or who has been advised by a healthcare provider to self-quarantine;
  • they are caring for their child whose school or childcare facility has been closed or whose childcare provider is unavailable due to COVID-19 precautions; or
  • they are experiencing a substantially similar condition specified by certain federal government agencies (no such condition has been specified to date).

The EFMLA applies for the same child-care related reason as the EPSLA, but for up to 12 weeks, ten of which are paid.

  1. The Court struck down the Final Rule’s “work availability” requirement. 

The Final Rule expressly provides that employees are not entitled to EPSL for three of the six listed reasons, nor to any EFMLA leave, if their employer “does not have work” for them. For example, Final Rule specifically provides, “An Eligible Employee caring for his or her Son or Daughter may not take Expanded Family and Medical Leave where the Employer does not have work for the Eligible Employee.” This is the so called “work availability” requirement, and it was significant because many businesses have slowed down or temporarily closed due to the impact of COVID-19.

The DOL argued that the Act supported this interpretation, but the Court disagreed, finding the Act ambiguous as to whether the FFCRA-specific reason had to be the reason an employee is unable to work, or whether it could be one of multiple causes.  Given that ambiguity, the Court went on to find that the work availability requirement is an impermissible interpretation of the Act.

So, what does this mean for employers? At this point it means that employees may be eligible for FFCRA-paid leave even if there is no work for them to do.

In other words, if this ruling stands, employers cannot deny FFCRA-paid leave to an employee who satisfies one of the qualifying reasons on the basis that the employer did not have work for that employee to do. That means that employees who are furloughed or that were laid off during the pandemic may be able to retroactively seek benefits under the Act. In some states, this might also open the door for those employees to seek unemployment benefits. This portion of the ruling could be particularly difficult for those businesses that closed as a result of a local quarantine order.

  1. The Court struck down the Final Rule’s definition of “health care provider.” 

The FFCRA permits an employer of “an employee who is a health care provider . . . to exclude such employee” from expanded FMLA benefits. The statutory definition of “health care provider” includes doctors and any other person, as determined by the DOL, to be capable of providing health care services.  The FFCRA Final Rule, however, went far beyond the original FMLA regulations to set forth an incredibly broad definition that included all employees of an organization providing health care services. The definition even included supply chain entities and contractors.

The Court found the Act’s definition went too far.  In particular, the Court took issue with the DOL’s reliance on the identity of the employer, not on whether a particular employee’s role has some nexus to the provision of healthcare. To highlight this point, the Court took time to note that note that the DOL “concedes that an English professor, librarian, or cafeteria manager at a university with a medical school would all be ‘health care providers’ under the Rule.”

Ultimately, the court found that “the Final Rule’s definition is vastly overbroad…in that it includes employees whose roles bear no nexus whatsoever to the provision of healthcare services, except the identity of their employers, and who are not even arguably necessary or relevant to the healthcare system’s vitality.”

What this means for employers? Employers may not have the option of denying FFCRA paid leave to a broad range of employees who work in the health care field.  Additionally, individuals who were previously denied FFCRA benefits under the “health care provider” exception might now seek FFCRA leave retroactively and/or prospectively.

  1. The Court partially struck down the Final Rule’s intermittent leave provisions. 

The Final Rule permits “employees to take Paid Sick Leave or Expanded Family and Medical Leave intermittently (i.e., in separate periods of time, rather than one continuous period) only if the Employer and Employee agree,” and, even then, only for a subset of the qualifying conditions for leave.  The DOL differentiated between leave related to an employee’s own COVID-19 condition (where intermittent leave may not be allowed unless the employee can telework) and leave related to childcare (where intermittent leave is allowed).  In all cases, though, the Final Rule required employer consent to intermittent leave arrangements.

The Court agreed with the DOL’s distinction between types of leave, as it is aimed at preventing the spread of COVID-19.  However, the Court found that the DOL failed to explain why employer consent is required for intermittent leave arrangements.  Thus, the Court vacated the Final Rule to the extent it requires employees to secure employer consent to take intermittent leave.

What this means for employers: employer approval is no longer required before an employee takes certain leave intermittently. For example, an employee may opt to take EPSLA and/or EFMLA due to school/child care closure on an intermittent basis. In addition, if an employee can telework, they may also take EPSL on an intermittent basis for illness-related reasons, since there is no risk of exposing others in the workplace.

  1. The Court struck down the requirement that employees provide documentation before taking leave. 

The Final Rule also required employees to submit certain supporting documentation to their employer “prior to taking [FFCRA] leave.” Under the EFMLA provisions of the Act, employees must generally provide notice as soon as practicable.  Under the EPSLA provisions of the Act, employees may be required to provide notice after the first workday (or portion thereof) that they are on leave.

The court vacated the part of the regulation’s documentation provision stating that employees must provide the required documentation before their EPSLA or EFMLA absence, finding that this requirement is inconsistent with the timing set forth in FFCRA notice provisions. The Court emphasized that the substantive aspects of the regulations documentation requirements, as opposed to the “temporal aspect” described above, remain in effect..

What this means for employers: employers cannot require documentation before an employee takes FFCRA leave, at least where one of the statutory exceptions applies.

What Does This Mean?

Notably, although the decision was issued by a New York federal district court in the State of New York, it has nationwide impact. Thus, the effect of the court’s decision is that the challenged portions of the rule cannot stand anywhere – not just in New York.

Although it is possible (and in my opinion likely) that the Department of Labor appeals this decision and seeks a stay, in the meantime, this decision is a fairly radical change to the Act. Moving forward, employers covered by the Act should begin abiding by Act, as revised by this decision.

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About Harrison Oldham

Harrison grew up in Mansfield, Texas. He attended Texas A&M University for his bachelor’s degree, where he met his wonderful wife, Kelsey. After graduating magna cum laude from Texas A&M, he attended SMU Dedman School of Law, graduating with honors in 2012. Today, Harrison and his wife live in Dallas, Texas with their son, Teddy.

Since graduating from SMU Law, Harrison has worked exclusively in the field of business law. He has spent time in private practice and in-house, working with clients of every size; from single person startups to Fortune 250 companies. Today his practice focuses on serving the diverse needs of businesses and individuals throughout Texas. You can learn more about Harrison by visiting his website, at: http://lonestarbusinesslaw.com/.

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