SDNY Vacates Portion of DOL Final Rule on FFCRA - McDermott Will & Emery

SDNY Vacates Portion of DOL Final Rule on FFCRA

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On August 3, 2020, the US District Court for the Southern District of New York struck down four parts of the US Department of Labor’s (DOL) Final Rule implementing the Families First Coronavirus Response Act (FFCRA). A copy of the court’s ruling is available here. The FFCRA provides COVID-19-related sick leave and family leave to employees of businesses with fewer than 500 employees.

In Depth

The State of New York brought suit against the DOL under the Administrative Procedure Act, alleging that several features of the DOL’s April 6, 2020, Final Rule implementing the FFCRA exceeded the DOL’s authority. The court concluded that several features of the Final Rule are invalid. Specifically, the court vacated the parts of the DOL’s rule that: (i) prohibited employees from taking leave if an employer “does not have work” for the employee; (ii) defined “health care providers”; (iii) required employer consent for employees to take intermittent leave; and (iv) required employees to provide documentation related to their leave prior to taking leave. The remaining provisions of the Final Rule were not affected by the court’s Opinion and Order. It is likely that the DOL will appeal this ruling.

In light of the court’s ruling, which currently applies at least to employers subject to the jurisdiction of the Southern District of New York (SDNY) and may be adopted by other courts, employers should work with counsel to determine whether they need to review their policies regarding the FFCRA and revisit prior leave denials if based on any of the provisions struck down by the court. In particular, the court’s ruling leaves open many questions, including what definition of “healthcare provider” applies under the FFCRA and whether employees on furlough are eligible for pay:

Who is a “healthcare provider” under the FFCRA?

  • When Congress enacted the FFCRA it exempted “healthcare providers” from the FFCRA’s paid leave requirements based on the need for essential healthcare providers to remain working in light of COVID-19. While the FFCRA did not define “healthcare providers,” it incorporated the Family Medical Leave Act’s definition and authorized the Secretary of Labor to issue regulations further defining this term under the FFCRA. The DOL then expanded this broadly to include anyone employed at any doctor’s office, hospital, healthcare center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home healthcare provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, employer or entity. The court found this expanded definition invalid and overbroad. Accordingly, employers subject to the SDNY’s ruling should consider whether they would still be a “healthcare provider” exempt under the FFCRA. Additional questions arise if employees in New York already received paid benefits in excess to those available from the FFCRA under New York’s emergency paid sick and family leave law which did not exempt healthcare providers.

Are employees on furlough eligible for emergency paid sick leave (EPSLA) or emergency paid family leave (EPFLA) under the FFCRA?

  • The SDNY Court Order vacated the work-availability requirement which previously provided that employees who were otherwise eligible for EPSLA or EPFLA because they were: (i) subject to a federal, state or local quarantine or isolation order related to COVID-19; (ii) caring for a family member who was subject to a quarantine or isolation order or who had been advised by a healthcare provider to self-quarantine due to COVID-19; or (iii) caring for a child whose school or place of care was unavailable due to COVID-19 would be ineligible for such leave unless their employer “does not have work” for them. Therefore, employees who are on furlough or other leaves of absence may now be entitled to paid leave under the FFCRA. However, further guidance is needed to the extent an employee was eligible and received unemployment compensation during a furlough or other leave. Additionally, employees in New York may have received paid leave benefits under New York’s emergency paid sick and family leave law that were in excess to those available under the FFCRA.

McDermott Will & Emery’s Coronavirus Resource Center is available to help you understand and assess the legal, regulatory and commercial implications of COVID-19.