Now What? Federal Court Nixes USDOL’S Regulations Implementing the Families First Coronavirus Response Act

On August 3, 2020, the US District Court, Southern District Court of New York, issued its opinion in State of New York v. U.S. Department of Labor, et al. striking down four material components of the US Department of Labor’s (“DOL”) regulations implementing the Families First Coronavirus Response Act (“FFCRA”).  The Court’s opinion comes approximately four months after the effective date of the regulations and five months before the FFCRA is scheduled to expire.

Background. The FFCRA incorporates the provisions of the Emergency Family and Medical Leave Expansion Act (“Expanded FMLA”) entitling employees up to 12 weeks of paid leave if they are unable to work because of the closure of a child’s school or place of daycare during the COVID-19 pandemic.

The Emergency Paid Sick Leave Act (“Emergency PSL”), also incorporated within the FFCRA, requires covered employers to provide employees up to 80 hours of paid sick leave if the employee is : (1)  subject to a government quarantine or isolation order related to COVID-19; (2) has been advised by a heath care provider to self-quarantine due to concerns related to  COVID-19; (3) experiencing symptoms of COVID-19 and seeking a medical diagnosis; (4) caring for an individual subject to a quarantine or isolation order by the government or healthcare provider; (5) caring for a child whose school or place of care is closed, or whose childcare provider is unavailable, because of COVID-19; or (6) experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.

After the DOL issued its FFCRA regulations, the State of New York filed an action in federal court challenging the regulatory provisions addressed below.

The Work Availability Requirement.  The DOL’s regulations exclude eligibility for Expanded FMLA or the Emergency PSL benefits if the employer has no available work for the employee to perform.  The Court struck down that requirement, noting that none of the qualifying conditions under the Emergency PSL and the Expanded FMLA expressly or implicitly require the availability of work as a condition precedent for benefits.   This ruling may impact employees who were furloughed or laid off for lack of work before becoming eligible or fully exhausting FFCRA benefits.

The Definition of a “Health Care Provider”.  Under the Expanded FMLA, an employer may elect to deny Expanded FMLA benefits to employees who serve as “health care providers” or emergency responders.  Although no definition was included in FFCRA, the DOL’s regulations broadly define a health care provider to include all individuals employed in any capacity by a business that is in or supports the healthcare industry.

The Court struck down the definition as overbroad insofar as it includes employees whose roles bear no nexus to the provisions of healthcare services, thereby extending Expanded FMLA leave rights to large numbers of employees who were previously ineligible for benefits.

Prior Consent to Intermittent Leave.  While the FFCRA is silent on the issue, the DOL’s regulations permit intermittent Emergency PSL or Emergency FMLA only with the employer’s consent and where the absence falls within a subset of qualifying conditions “where there is a minimal risk that the employee will spread COVID-19 to other employees”.

The Court recognized that there are circumstances where intermittent leave should be barred for public health concerns.  For example, when an employee has symptoms of or diagnosed with COVID-19, or has been exposed to such an individual, the employee is a risk to others if they are permitted to return intermittently to the workplace. While the Court concluded employers should be able to restrict intermittent leave under these circumstances, it found no basis for the requirement of prior employer consent where intermittent leave would not pose a risk of infection to others, as in the case of Expanded FMLA leave to care for a child whose school has been closed.

Documentation Supporting Leave.  The DOL’s regulations require employees to provide documentation and other information substantiating leave eligibility prior to taking Expanded FMLA or Emergency PSL.  The Court struck down this regulatory prerequisite, finding no such requirement in the language of the FFCRA.  In doing so, however, the Court recognized that while documentation is not a precondition for leave under the Act, employers may require documentation for continued leave.

Conclusion. First, it should be noted that the Court’s decision is currently binding only in the Southern District of New York.  At this juncture it is unclear whether the Court’s holdings will be adopted by the courts in other jurisdictions.  Second, the DOL is expected to file an appeal of the Court’s decision and the ultimate outcome of the challenge to the FFCRA regulations is far from certain. Third, the DOL may elect to revise its regulations in accordance with the Court’s opinion or issue some other modified regulations aimed at surviving legal challenges.

We recommend that employers keep an eye on these and other developments and consult with an employment attorney when administering FFCRA rights.

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