On August 3, 2020, a federal district court in New York invalidated several provisions of the Department of Labor (DOL) regulations implementing the paid leave provisions of the Families First Coronavirus Response Act (FFCRA) (State of New York v. Department of Labor 20-CV-3020). Recall the FFCRA requires covered employers (generally, those with fewer than 500 employees) to provide emergency paid sick leave for certain COVID-19-related reasons and emergency paid family and medical leave for employees unable to work due to COVID-19-related school or day care closures. The DOL issued regulations addressing eligibility and administration issues including the following, which were invalidated by the court:
- FFCRA leave only being available where the employee had work available to be performed.
- A broad healthcare provider exemption, which allowed a health care employer to decide which of its employees would be eligible for FFCRA leave.
- A requirement that employees obtain consent from the employer for intermittent leave for certain reasons; and
- The timing of documentation supporting the need for FFCRA leave.
The most significant issue is eliminating the requirement that actual work be available before employees may take paid leave. This could leave employers open for claims of leave by employees who were/are furloughed (or on other unpaid leave) due to lack of work. Invalidating the broad healthcare provider exemption is also impactful for health care provider employers, including hospitals. The DOL is likely to appeal and seek a stay of the district court’s order. If that is the case, employers can continue to administer FFCRA as set forth in the regulations pending a decision on appeal. Absent a DOL appeal and stay, the district court’s decision leaves open two key questions: does this decision apply outside of New York, and does it apply retroactively? The conservative approach at this stage is to assume it applies nationwide but employers should consult with their own counsel as to how to proceed based on their risk tolerance. As to whether the decision applies retroactively back to April 1, there is at least an argument that employers had a right to rely on the DOL’s FFCRA regulations and the decision should not be applied retroactively.