As if figuring out all the coronavirus-related laws wasn’t difficult enough, we now have a court ruling that turns some of the FFCRA rules we thought we understood on their heads. On August 3 a federal court in New York struck down parts of the Department of Labor’s Families First Coronavirus Response Act (FFCRA) regulations, holding that the DOL had exceeded its authority by limiting employee rights under the act in four key aspects:

The availability of FFCRA benefits only if the employer has current work for the employee
The regulations’ broad definition of “health care provider” for the purposes of FFCRA coverage exemption
Requiring employer consent to intermittent leave
Requiring documentation prior to taking FFCRA leave

The ruling came in a lawsuit filed by the State of New York against the U.S. Department of Labor, case no. 20-cv-3020.

But, before we dive in, I need to raise an alert about two very important and unresolved issues:

First, does the New York court’s ruling have nationwide impact or is it only applicable in the Southern District of New York where this court sits? The ruling is by a federal court and it does invalidate some federal regulations. But whether it is binding on the DOL and employers nationwide is, surprisingly, not clear.
Second, wherever it applies, is the ruling retroactive to the effective date of FFCRA (April 1, 2020) or will it apply to benefits claims only from the date of the ruling, forward?

So with those big question marks hanging overhead, let’s look at the court’s ruling in which the judge invalidated four aspects of the DOL’s regulations interpreting FFCRA:

Allowing employers to deny FFCRA benefits to employees on furlough. I’ll say it up front: this is the most nonsensical part of the court’s ruling, in my humble opinion. FFCRA provides paid sick leave and expanded FMLA leave to employees who are “unable to work (or telework) due to a need for leave” because of one of the various covered reasons. The DOL’s regulations exclude employees from these benefits if their employers do not have work for them – the “work-availability” requirement, as it is referred to in the ruling. This makes sense to me – if the employer has no work available, the employee has no work to take leave from.
However, the court held that the statutory terms “because” or “due to” do not foreclose an interpretation entitling employees to FFCRA benefits “if the inability to work has multiple sufficient causes – some qualifying and some not.” Moreover, the court observed that the DOL’s explanation of its justification for the work-availability requirement (no work = no work to take leave from) is insufficient to support its position; imposing that requirement “is an enormously consequential determination that may considerably narrow the statute’s potential scope.” So, following the court’s ruling, if an employee is unable to work due to one of the qualifying reasons, that employee is entitled to FFCRA benefits even if the employee is also unable to work because there is no work to be had.

OK, my head is starting to hurt, but we’ve just started.
As a refresher, FFCRA provides job protected and paid leaves of absence to the workers for employers with fewer than 500 employees –

Up to 80 hours of paid sick leave for 6 COVID-related qualifying reasons (employee’s own quarantine due to a governmental order or provider’s recommendation, caring for a family member in quarantine, COVID symptoms plus seeking a diagnosis, school/day care closures, and other similar situations as identified later) and

Up to 12 weeks of job protected leave due to the closer of a worker’s child’s school or place of care (2 weeks unpaid but possibly covered by the paid sick leave, and 10 weeks at partial pay).

You can read our prior blog post covering the details of FFCRA here, our post about the DOL supporting regulations here, and lots of other FFCRA and COVID-19 posts by putting those terms in the blog search box.
Providing a very broad definition of “health care provider” to allow employers to exempt workers from coverage. The FMLA, which supplies the relevant statutory definition for both provisions of the FFCRA at issue, defines a “health care provider” as: “(A) a doctor of medicine or osteopathy who is authorized to practice medicine or surgery (as appropriate) by the State in which the doctor practices; or (B) any other person determined by the Secretary to be capable of providing health care services.” The regular FMLA regulations expand the definition pursuant to (B) to include many additional professionals such as podiatrists, dentists, clinical psychologists, optometrists, nurse practitioners, and physician’s assistants.
However, the DOL supplied an even more expansive definition of “health care provider” for the FFCRA under the authority of section (B). According to the court, the DOL’s definition goes much too far as it focuses on the employer’s business rather than the employee’s role and allows employers to exempt anyone “employed at” a doctor’s office, hospital, medical school, or a number of other facilities “where medical services are provided,” as well as such facilities’ contractors. This could include individuals such as “an English professor, librarian, or cafeteria manager at a university with a medical school” or, as was posed to me during a recent COVID webinar, a hospital’s grounds crew. Health care providers? Methinks not (and neither did the court).

So, for the time being, it seems we are left with just “a doctor of medicine or osteopathy who is authorized to practice medicine or surgery” who may be exempted by an employer from entitlement to FFCRA benefits. Whether the additional categories of health care providers under the regular FMLA regulations also applies to the FFCRA exemption is very much in doubt. Even so, that would leave out a lot of critical roles such as nurses and EMTs, just to name a couple.
Requiring employees to obtain employer consent to take intermittent FFCRA leave. The court recognized there may be a legitimate need to limit an employee’s access to the workplace if the employee poses an infection risk, such as when the employee is quarantined; exhibits symptoms and is seeking a diagnosis; or is caring for a quarantined family member. But there is no such risk for leave necessitated by an employee’s child’s school closure or unavailability of day care or if the employee is working remotely. As a result, there is no justification for allowing this type of intermittent leave only with employer consent. (The regular FMLA does not require employer consent for intermittent leave except for bonding leave).
As an aside, this resolves – at least in New York – the as-yet unanswered question of whether taking leave only on at-home days when a child’s school is reopening under a hybrid remote/classroom learning arrangement constitutes intermittent leave requiring employer consent. Employers, this one is pretty easy – just allow intermittent time here if the employee asks.
Requiring employers to provide documentation prior to taking FFCRA leave. The FFCRA does not address what, if any, documentation can be required of an employee to support a leave request. Rather, it just requires the employee to give such advance notice as “as is practicable” for foreseeable expanded FMLA leave and, with respect to paid sick leave, notice after the first missed workday in accordance with the employer’s usual notice procedures.

On the other hand, the FFCRA regulations have pretty detailed guidance on the documentation an employer can require to support an employee’s request for leave, and the regs state that such documentation must be submitted to the employer “prior to taking” FFCRA leave. The court found this advance documentation requirement to be in direct conflict with the statute and therefore unenforceable.

This leaves employers (at least those in the Southern District of New York!) in limbo. The documentation requirement itself was not stricken, just the requirement that it be provided prior to taking leave. Indeed, in order to get the federal tax credit for benefits paid under the FFCRA, the employer MUST get detailed documentation from the employee. So: If the employee takes leave and never provides the required documentation, can the employer go back and deny the leave retroactively? If so, how would the employer recoup wages paid? (Beware of state and federal laws regarding withholding from employee paychecks!) Or, how would the employer qualify for the tax credit? You get the idea.

What will happen next? Good question! To be honest, no one is sure when or how we will get clarity on the two big questions I posed above and lots of others. Just do an internet search and you’ll find scads of law firm blog posts and newsletters with no concrete answers. Possible next steps? The DOL may appeal the court’s ruling and request a stay during the appeal. It may choose to revise the FFCRA regulations to conform to the ruling (temporarily or for the duration of FFCRA). Additional lawsuits may be filed in other federal courts around the country. And on and on. . . . I would hope the DOL will realize the very difficult positon in which this opinion places covered employers, and issue some sort of guidance very soon.

Employers also need to be aware of the possible impact of this decision on similar state and municipal COVID-related laws. There are some that incorporate the FFCRA to some extent and the impact of the New York ruling on these state and municipal laws is not clear.

What is Matrix doing? Another good question! We’ll be watching all of our sources for further information, obviously, and hoping for a definitive development. In the meantime we will work with our clients covered by FFCRA to address the issues raised by the court ruling and administer FFCRA in accordance with collaborative consultation. If you have questions, please contact your Reliance Standard or Matrix account manager.