On August 3, 2020, the Southern District of New York issued a decision vacating certain provisions of the Department of Labor’s (DOL) Final Rule on the Families First Coronavirus Response Act (FFCRA). This ruling will be difficult and problematic for many employers and will create substantial uncertainty in the workplace.

The FFCRA, which was enacted in March, obligates employers with fewer than 500 employees to provide both emergency family leave and sick leave to certain employees who are unable to work because of the COVID-19 pandemic. On April 1, 2020, only weeks after the statute was passed, the DOL issued a Final Rule implementing the FFCRA, which the state of New York soon challenged in federal district court. That Court has now stricken four provisions of the DOL’s Final Rule. These provisions include a requirement that work be available to an employee to receive benefits, the definition of a “healthcare provider” exempt from some requirements, a requirement that the employer consent to the taking of intermittent leave and a requirement that documentation be provided prior to taking leave. The remainder of the Final Rule will continue to operate in the absence of these provisions.

Most employers are already familiar with the six reasons that might trigger a right to sick leave benefits under the FFCRA. Generally, the FFCRA requires covered employers to provide a total of 80 hours of emergency paid sick leave to employees who are unable to work or telework because they:

  1. Are subject to a federal, state or local quarantine or isolation order.
  2. Have been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19.
  3. Are experiencing symptoms of COVID-19 and seeking a medical diagnosis.
  4. Are caring for an individual who is subject to a quarantine or isolation order or has been advised by a healthcare provider to self-quarantine.
  5. Are caring for his or her child whose school or place of care has been closed or whose child care provider is unavailable due to COVID-19 precautions.
  6. Are experiencing any other substantially similar condition specified by the Secretary of Health & Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

The FFCRA similarly requires covered employers to provide up to 12 weeks (10 of which are partially paid) of expanded family leave to eligible employees who are unable to work or telework because their child care provider is unavailable or their child’s school or place of care is closed due to the public health emergency (that is to say, reason 5 above).

The DOL’s Final Rule provided that employees using sick leave under reasons 1, 4 or 5 or expanded family leave were not entitled to leave benefits when the employer did not have work for them, an interpretation New York state challenged. The Court applied the test in Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984), to determine whether the DOL exceeded its rulemaking authority. The Court described the DOL’s explanation for the rule as “patently deficient” and found that this requirement applied to only three of the six qualifying reasons for emergency paid sick leave. This ruling, unfortunately, leaves open several questions, such as whether workers who have been furloughed are now eligible for FFCRA leave.

The Court next turned to the FFCRA’s exemption that permitted employers to exclude “health care providers” from leave benefits, a term that the Final Rule defined extremely broadly and included employees such as medical office workers. New York argued that the definition of healthcare provider exceeded the DOL’s authority under the statute. In looking at the challenge to the Final Rule’s definition of health care provider, the Court again applied the Chevron test and found that it was expansive and that the DOL’s definition applied to anyone employed by certain classes of employers, including those employees who did not directly provide healthcare services to patients.

The Court ruled that the definition improperly focused on the identity of the employer rather than the individual and the skills, roles, duties or capabilities of the employees. Further, the Court ruled that the FFCRA uses the term healthcare provider to exempt employees who are “essential to maintaining a functional healthcare system during the pandemic,” and that under the DOL’s definition, certain employees, such as an English professor, would not even be arguably essential to the healthcare system’s vitality. Unfortunately, the Court left no clear definition itself, an omission that will certainly create considerable confusion in the healthcare community as employers try to determine which employees actually provide healthcare services and which do not.

In addition, the intermittent leave provision of the Final Rule permitted employees to take intermittent leave for certain qualifying leave conditions only if the employer and employee agreed to such intermittent leave. Although the Court ruled that the provision as applied to leave taken to decrease the spread of the virus was appropriate, it vacated the portion of this provision requiring employer consent for those conditions that did not implicate the same public health considerations. The Court ruled that the DOL did not provide sufficient justification for requiring consent in those situations. This ruling aligns intermittent emergency family leave under the FFCRA with intermittent leave under the Family and Medical Leave Act, which does not require employer consent.

Last, the DOL’s Final Rule required documentation prior to taking FFCRA leave, indicating the reason for leave, the duration and, when relevant, the authority for the isolation or quarantine order qualifying them for leave. Here, the Court found that the FFCRA already provided a scheme governing prior notice. Namely, the FFCRA requires notice for emergency family leave as soon as practicable and for emergency sick leave after the first workday an employee receives paid sick time. The Court struck this provision finding that even its relatively modest requirements failed the Chevron test because they were inconsistent with the FFCRA’s existing and unambiguous notice provisions.

The Court’s ruling will create considerable uncertainty for many employers and employees. It is unclear whether this decision will be followed by other courts, have a nationwide effect or be appealed, or whether new regulations will be issued, as the FFCRA is set to expire at the end of this year. Meanwhile, employers should review prior denials of leave based on the now-vacated requirements and consider whether policies need to be revised. Further, employers in the healthcare industry should reevaluate their staffs to determine who might now be entitled to benefits despite the FFRCA and the Final Rule’s healthcare provider exemption. Employers should continue to monitor developments in this area, as it is virtually certain that courts and agencies will be issuing additional decisions and guidance in the months to come.