Federal Court Strikes Down Provisions of Department of Labor Rule on Federal Paid LeaveAugust 7, 2020 – Alerts
A recent ruling by the U.S. District Court for the Southern District of New York regarding certain provisions of the Families First Coronavirus Relief Act (FFCRA) may have far-reaching effects on employers’ leave obligations under the law. But the decision, which addresses the U.S. Department of Labor's Final Rule implementing those provisions: the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family and Medical Leave Act (EFMLA), has also created much uncertainty.
In March, in response to the COVID-19 pandemic, Congress passed the FFRCA. There are two key provisions of the FFCRA that provide employees with (subsidized) paid leave for COVID-19 related reasons: EPSLA and EFMLA.
The EPSLA provides employees with up to two (2) weeks of paid leave when they are:
- Subject to a federal, state or local quarantine or isolation order related to COVID-19;
- Advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- Experiencing symptoms of COVID-19 and seeking a medical diagnosis;
- Caring for an individual who either is subject to a quarantine or isolation order related to COVID-19 or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- Experiencing any other substantially similar condition specified by the Secretary of Health and Human Services; or
- Caring for a child whose school or place of care is closed, or whose child care provider is unavailable, because of COVID-19 related reasons.
The EFMLA provides employees with up to two (2) weeks of unpaid and up to 10 weeks of (subsidized) paid leave when they are caring for a child whose school or place of care is closed, or whose child care provider is unavailable, because of COVID-19 related reasons.
Then, in April, the Department of Labor (DOL) published a Final Rule (85 FR 19326), promulgating regulations to implement the EPLSA and EFMLA.
The state of New York filed a lawsuit (State of New York v. United States Department of Labor et al.) challenging the Final Rule under the Administrative Procedures Act, arguing that several features exceeded the DOL’s authority.
On Aug. 3, 2020, the U.S. District Court for the Southern District of New York invalidated the following provisions of the DOL’s Final Rule relating to emergency paid federal leave available under the FFCRA:
- The work availability requirement
- The definition of “health care provider” for the purposes of applying the health care provider exemption
- The employer consent requirement for intermittent leave
- The documentation requirement as a precondition of taking leave
Overview of the Decision
In determining whether a rule or regulation exceeds an agency’s authority, courts follow the two-step test articulated in Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984). First, the court must decide whether Congress spoke directly to the question at issue and, if so, the court defers to the statute. Second, if the statute is silent or ambiguous as to the question at issue, the court determines whether the agency’s response to the statute is a “permissible” interpretation of the statute, and, if so, the court defers to the agency. The court’s application of the Chevron test to each of the four challenged provisions of the FFCRA is discussed in more detail below.
The ‘Work Availability’ Requirement
The work availability requirement under the FFCRA provided that if an employer had no work available for an employee, that employee would not be entitled to take paid leave under the EFMLA or three of the six qualifying reasons for leave under the EPSLA.
In invalidating this requirement, the court found that the FFCRA was silent as to this question and that the DOL’s interpretation of the FFCRA was impermissible under the second prong of the Chevron test because:
- The DOL did not meet Chevron’s minimal requirement for reasoned decision making in its arguments that the work availability requirement was a permissible interpretation of the FFCRA because the FFCRA stated that employees are entitled to take leave “because of” certain qualifying conditions “due to” the COVID-19 pandemic; and
- The DOL provided no rational explanation as to why the work availability requirement applied to only three of the six qualifying reasons for leave under the EPSLA.
The Definition of ‘Health Care Provider’
Under the FFCRA, employers are able to exempt employees who are health care providers from both forms of emergency paid leave. Congress granted the DOL authority to determine who qualifies as a health care provider for the purposes of this exemption.
In the Final Rule, the DOL broadly defined a health care provider includes “anyone employed at any doctor’s office, hospital health care center . . . or any similar institution.”
The court found that this definition was at odds with the express grant of authority under the FFCRA, which requires the DOL to determine that the employee to be exempt is “capable of furnishing health care services.” The court reasoned that this definition exceeds the DOL’s authority because it hinges on the identity of the employer, rather than the “skills, roles, duties or capabilities of a class of employees.”
In particular, the court pointed out that under the DOL’s definition, an English professor at a medical school would be considered a “health care provider” and could be ineligible for leave under the FFCRA. The court found this to be far outside the intention of Congress in passing the FFCRA.
Employer Consent for Intermittent Leave
New York challenged three features of the Final Rule as it pertains to intermittent leave.
First, New York challenged the Final Rule’s restriction on intermittent leave for only certain qualifying conditions. The court upheld the restriction, finding it was consistent with Congress’ goal of preventing the spread of COVID-19 because it applied to those qualifying conditions where an employee would pose an exposure risk if permitted to take intermittent leave.
Second, New York challenged the intermittent leave restriction as prohibiting intermittent leave for different qualifying conditions. The court, however, agreed with the DOL’s interpretation of the rule as forbidding intermittent leave only for any single qualifying reason. In other words, an employee could take two days off while awaiting a diagnosis, then later take more paid leave for another qualifying reason.
Third, New York challenged the rule’s requirement that an employee obtain employer consent prior to taking intermittent leave. The court struck down this requirement under the second prong of the Chevron test, finding that it was inconsistent with the rules relating to intermittent leave under the Family and Medical Leave Act (FMLA) and that the DOL failed to offer any rationale as to why employer consent would be required for an employee to take intermittent leave.
The Documentation Requirement
Finally, New York argued that the rule requiring employees to submit documentation prior to taking leave was inconsistent with the FFCRA. The court agreed.
With respect to EFMLA, the FFCRA expressly requires “notice of leave as is practicable.” With respect to EPSLA, the FFCRA allows the employer to implement reasonable notice procedures “after the first work day (or portion thereof) an employee receives paid sick time.” Accordingly, the court struck down the documentation requirement, insofar as it required documentation as a precondition of leave, under the first prong of the Chevron test.
The court did not alter the DOL’s rule regarding what type of documentation an employer should require from an employee requesting EPSLA or EFMLA.
The court’s ruling has potentially far-reaching effects on employers’ leave obligations but, unfortunately, has also left many uncertainties. Most notably, the invalidation of the work availability requirement has left unanswered whether employees who are on furlough are entitled to leave under the FFCRA.
In addition, and particularly worrisome for home health care agencies, nursing homes and similar facilities, it is now unclear which employees fall under the “health care provider” exception. It is likely the exemption still applies to employees who meet the FMLA’s narrower definition of “health care provider,” which includes doctors of medicine or osteopathy, podiatrists, dentists, clinical psychologists, optometrists, chiropractors, nurse practitioners, nurse midwives, clinical social workers, physician assistants and Christian Science practitioners. However, it is unclear whether other service providers such as home health aides will be covered by the exemption.
If the DOL disagrees with the court’s ruling, it may seek a stay or an appeal of the decision. On the other hand, the DOL may issue a new temporary rule or interim guidance consistent with the court’s decision.
In the interim, employers should review their policies and practices regarding the provision of EPSLA and EFMLA to ensure accordance with the court’s ruling, including not requiring employees to get consent prior to taking intermittent EPSLA or EFMLA leave and not requiring employees to submit documentation as a pre-condition for taking EPSLA or EFMLA.
Further action by the Department of Labor is anticipated, which hopefully will provide more clarity for employers. We will continue to monitor this issue.
If you have any questions regarding this alert, please contact Heather R. Boshak at [email protected] or 973.994.7508, or Nicole D. Espin at [email protected] or 973.548.3334, or any attorney in our national Labor & Employment Practice.