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Federal Ruling Creates Tremendous Uncertainty Around Coronavirus Leave Rules

    Client Alerts
  • August 06, 2020

The Families First Coronavirus Response Act (FFCRA) was passed by Congress on March 18 and generally provides new paid leave rights to employees working for public entities or companies with fewer than 500 employees. On April 1, the U.S. Department of Labor (DOL) promulgated its final rule implementing the FFCRA. While the final rule was admirably drafted under the intense time-pressure of the early COVID-19 pandemic, many of its provisions were immediately controversial. As a result, the State of New York filed a federal lawsuit in the Southern District of New York on April 14 challenging key components of it.

On Monday, the court granted New York’s request for summary judgment and largely invalidated four key components of the final rule. While the DOL may appeal or promulgate additional rulemaking, this ruling creates tremendous uncertainty for employers covered by the FFCRA.

The Work-Availability Requirement. First, the court struck down the final rule’s work-availability requirement, which generally prohibited employees from taking FFCRA leave if their employer “does not have work” for them. For example, employees who had been furloughed for lack of business were deemed ineligible to take FFCRA leave. Now, employees who are out on furlough or otherwise not working due to lack of business may be entitled to paid leave under the FFCRA.

The “Health Care Provider” Exemption. Second, the district court invalidated the final rule’s “health care provider” exemption, which allowed certain employers, including doctor’s offices, hospitals, and numerous other listed entities, to exclude any or all of their employees from taking FFCRA leave. The court held that this exemption exceeded DOL’s authority under the FFCRA because the statute provides a more limited definition of “health care provider” and focuses on the employee rather than the employer. Based on this ruling, many employers who previously asserted the “health care provider" exemption may need to revisit this decision.

Intermittent Leave. Third, the court struck down the final rule’s requirement of employer consent for an employee to take intermittent FFCRA leave to care for a son or daughter whose school or place of care is closed. Therefore, intermittent leave may be mandatory for employees that meet this criteria. Note, however, that the district court upheld the prohibition of intermittent leave for conditions that correspond with an increased risk of infection (such as being subject to quarantine order, being advised by health care provider to self-isolate, or experiencing symptoms of COVID-19 and seeking diagnosis). Moving forward, employers should consider permitting all employees to take intermittent leave to care for a child whose school or place of care is closed.

Documentation Requirements. Finally, the district court invalidated the final rule’s requirement that employees submit documentation to their employer “prior to taking [FFCRA] leave.” The court held that receipt of such documentation is not a statutory prerequisite. Therefore, employers should consider liberally granting leave under FFCRA even before an employee provides the documentation to substantiate the need for leave.

This decision may be appealed to the Second Circuit Court of Appeals. Unless the district court’s order is stayed pending such appeal, employers should revisit their procedures for implementing FFCRA leave requirements.