Understanding and responding to the business and legal impacts of COVID-19

Did a New York Federal Court Ruling Just Expand Your Employees’ Paid Leave Eligibility under the FFCRA?

On August 3, 2020, the Southern District of New York (“SDNY”) ruled that the Department of Labor (“DOL”) exceeded its rule-making authority when it issued regulations (the “Final Rule”) under the Families First Coronavirus Response Act (“FFCRA”) that narrowed employees’ eligibility to take paid leave if the employer did not have work for them to perform (known as the work-availability requirement). Employers should now be familiar with the two forms of FFCRA paid leave available under the Emergency Paid Sick Leave Act (“EPSLA”) and Emergency Family and Medical Leave Expansion Act (“EFMLEA”). Specifically, the Final Rule included a work-availability requirement for three categories of leave where employers “do not have work” for employees, resulting in ineligibility in the following scenarios:

  • § 826.20(a)(2) (EPSLA: subject to a quarantine or isolation order);
  • § 826.20(a)(6) (EPSLA: employee caring for an individual subject to certain orders or directives);
  • § 826.20(a)(9) (EPSLA: to care for son or daughter whose school or place of care is closed or child care provider is unavailable due to reasons related to COVID-19);
  • § 826.20(b)(1) (EFMLEA: to care for son or daughter whose school or place of care is closed or child care provider is unavailable due to reasons related to COVID-19).

Among other reasons, the district court found that the DOL did not undertake sufficient reasoned decision-making in adding a work-availability requirement for three of the six qualifying conditions for leave.

The district court also found that the DOL’s Final Rule was overly broad in its definition of “health care provider,” which had the practical effect of allowing employers to exclude employees from paid leave benefits under both the EPSLA and EFMLEA. The Final Rule’s definition was expansive in that it included “anyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institutional offering health care instruction…” and “include[d] any individual employed by any entity that contracts with any of these institutions described above….” 29 C.F.R. § 826.30(c)(1)(i)-(ii). The DOL conceded that “an English professor, librarian or cafeteria manager at a university with a medical school would all be ‘health care providers’” under the Final Rule. The district court ruled that the definition of “health care provider” cannot stand.

Additionally, the court partially vacated provisions related to the DOL’s attempt to limit “intermittent” leave and those that required employees to document the stated reason for paid leave. Specifically, the court struck down the provisions that (1) required an employer to consent to intermittent leave that may be permissible, but upheld that portion of the Final Rule that “bans intermittent leave based on qualifying conditions that implicate an employee’s risk of viral transmission”; and (2) required employees to provide documentation as a precondition to taking leave as “more onerous than the unambiguous statutory scheme Congress enacted.”

Other than the provisions specifically vacated, the SDNY judge left the remaining provisions of the Final Rule intact.

What does this mean for employers subject to the FFCRA (generally, employers with fewer than 500 employees)? The SDNY’s ruling means that employees who were furloughed because their employer did not have work for them at the time may be eligible for paid leave under the EPSLA and EFMLEA. Additionally, employers should not require advance notice for eligibility, cannot restrict certain intermittent leave, and should not deem an employee ineligible based on the overly broad definition of “health care provider” provided in the DOL’s regulations. It is too soon to know whether an appeal will stay enforcement of the SDNY court’s ruling or whether additional rule-making will be forthcoming. However, without a stay of the court’s decision, employers should follow the now-modified Final Rule consistent with the SDNY court’s decision.

Employers are encouraged to review these changes and their impacts on their businesses and seek strategic legal counsel in an effort to mitigate unfavorable outcomes, as appropriate.


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