SDNY vacates portion of DOL final rule on FFCRA

Decision
Next steps for employers

On 3 August 2020 the US District Court for the Southern District of New York (SDNY) struck down four parts of the US Department of Labour's (DOL's) final rule implementing the Families First Coronavirus Response Act (FFCRA).(1) The FFCRA provides COVID-19-related sick leave and family leave to employees of businesses which have fewer than 500 employees.

Decision

The State of New York brought a suit against the DOL under the Administrative Procedure Act, alleging that several features of the DOL's 6 April 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 rule that:

• prohibit employees from taking leave if an employer "does not have work" for them;
• define 'healthcare providers';
• require employer consent for employees to take intermittent leave; and
• require employees to provide documentation relating to their leave prior to taking leave.

The remaining provisions of the final rule are unaffected by the court's decision. The DOL is likely to appeal.

Next steps for employers

In light of the court's decision, which currently applies at least to employers subject to the jurisdiction of the SDNY and may be adopted by other courts, employers should work with counsel to determine whether they must 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 decision 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 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 authorised the secretary of labour to issue regulations further defining this term under the FFCRA. The DOL then expanded this broadly to include anyone employed at:

• doctor's offices;
• hospitals;
• healthcare centres;
• clinics;
• post-secondary educational institutions offering healthcare instructions;
• medical schools;
• local health departments or agencies;
• nursing facilities;
• retirement facilities;
• nursing homes;
• home healthcare providers;
• facilities that perform laboratory or medical testing;
• pharmacies; or
• any similar institutions, employers or entities.

The court found this expanded definition invalid and overbroad. Accordingly, employers subject to the SDNY's decision should consider whether they would still be a healthcare provider exempt under the FFCRA. Additional questions arise if employees in New York have already received paid benefits in excess of 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 or emergency paid family leave under the FFCRA?
The SDNY court order vacated the work-availability requirement which previously provided that employees who were otherwise eligible for emergency paid sick leave or emergency paid family leave for one of the following reasons would be ineligible for such leave unless their employer "[did] not have work" for them:

• the employee was subject to a federal, state or local quarantine or isolation order relating to COVID-19;
• the employee was 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
• the employee was caring for a child whose school or place of care was unavailable due to COVID-19.

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 that an employee was eligible and received unemployment compensation during furlough or while on other leave. In addition, 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 of those available under the FFCRA.

For further information on this topic please contact Lindsay Ditlow at McDermott Will & Emery by telephone (+1 212 547 5400) or email (lditlow@mwe.com). The McDermott Will & Emery website can be accessed at www.mwe.com.

Endnotes

(1) A copy of the court's decision is available here.