New York Federal District Court Rules Four Provisions of COVID-19 Paid Leave Rule Invalid

On August 3, 2020, a federal judge in the Southern District of New York held that four provisions of the U.S. Department of Labor’s (DOL) Final Rule (the Final Rule) implementing the Families First Coronavirus Response Act (FFCRA) are invalid.

As we discussed in a previous post, the FFCRA obligates employers to offer sick leave and expanded family leave to employees who cannot work because of certain reasons related to the pandemic. At issue here are two major provisions of the FFCRA: Emergency Family and Medical Leave Expansion Act (EFMLEA), which entitles employees to partially paid leave to care for a dependent child due to COVID-19 school or daycare closures, and the Emergency Paid Sick Leave Act (EPSLA), which requires employers to provide paid sick leave to employees who are experiencing one of six qualifying COVID-19-related circumstances. (See here for additional information.)

After concluding that New York had standing to challenge DOL’s Final Rule, the court considered the validity of four provisions: the work-availability requirement, the definition of health care provider, the prohibition on intermittent leave, and the documentation requirements. 

Work-Availability Requirement

The Final Rule’s “work-availability requirement” provides that an employee may not take paid sick leave where an employer does not have work for the employee. DOL argued the work-availability requirement applies to all six qualifying COVID-19-related circumstances. The court disagreed and concluded that, under the explicit language of the Final Rule, the work-availability requirement only applies to three of the six situations: (1) if the employee is subject to a quarantine or isolation order; (2) if the employee is caring for an individual who is subject to a quarantine or isolation order or has been advised by a medical provider to self-quarantine; or (3) if the employee is caring for his or her dependent child due to a school or daycare closure.

The court held that DOL’s differential treatment of three of the six qualifying conditions was not reasonable and lacked sufficient explanation. Accordingly, the court found the work-availability requirement invalid. 

Definition of Health Care Provider

Under both the EPSLA and EFMLEA, an employer may exclude from benefits an employee who is a “health care provider or an emergency responder.” The State of New York argued that the DOL’s broad definition of “health care provider” (which includes any employee of a wide range of employers in the medical field) exceeds DOL’s statutory authority.

The court agreed and concluded that DOL’s expansive definition of “health care provider” is unambiguously foreclosed by FFCRA, which requires the employee must be “capable of furnishing healthcare services.” In so holding, the court reasoned that DOL’s definition would include employees whose work “bears no nexus whatsoever” to the provision of healthcare services.

Intermittent Leave Requirements

Under DOL’s Final Rule, an employee may take intermittent leave “only if the Employer and Employee agree” and only for certain qualifying circumstances.

The court upheld DOL’s prohibition on intermittent leave as to certain qualifying circumstances because those situations “correspond with an increased risk of infection.” But the court concluded that the DOL’s requirement for employer consent to intermittent leave for the remaining circumstances is not reasonable because the DOL provided no rationale for that requirement. The court held the employer-consent requirement for intermittent leave is invalid. 

Documentation Requirements

Finally, New York challenged the Final Rule’s requirement that an employee provide documentation to his or her employer prior to taking FFCRA leave. The court concluded that to the extent the documentation requirements are a precondition to leave, the Final Rule is invalid. 

Employers should remember that the effect of this ruling is likely limited. The Southern District of New York did not purport to be implementing a nationwide injunction to invalidate these aspects of the Final Rule across the country. In addition, there is some question whether the court’s decision will be upheld on appeal. However, employers should be aware that as other courts consider these provisions, they may agree with the above conclusions.