The Implication of the New York District Court Decision on Families First

August 17, 2020 | Article

A federal district court in New York has overturned portions of the Department of Labor (DOL) Final Rule interpreting the mandated paid leave provisions of the Families First Coronavirus Response Act.

Specific provisions include:

  • The definition of who qualifies as a healthcare provider eligible to be excluded from the mandate at the employer’s election
  • The exclusion from the mandate of employees whose employers do not have work for them, making wages paid to such employees ineligible for the credit
  • The requirement that employees secure consent of the employer for intermittent leave
  • The requirement that documentation be provided by the employee before taking leave

What Does the Decision Mean for the Families First Act?
The effect of this decision on employers isn’t clear. Employers, particularly healthcare providers, may find employees exempted from applying for paid leave under the DOL rule now wanting to apply for these benefits. In addition, employees may not need to provide supporting documentation prior to taking Families First Act paid leave. The DOL is expected to appeal the decision and may ask that the ruling be stayed pending the appeal.

A copy of the decision is available here.

Make sense of what this change to Families First means for you.

The following information is based on information included in the decision.

How is a Healthcare Provider Defined?
Employers may elect to exclude healthcare providers from the requirement that they provide the paid sick and family leave mandated by the Families First Act.

The DOL Final Rule defines healthcare provider as those employed at any:

  • doctor’s office
  • hospital
  • healthcare center
  • clinic
  • post-secondary educational institution offering healthcare instruction
  • medical school
  • local health department or agency
  • nursing facility
  • retirement facility
  • nursing home
  • home health care provider
  • any facility that performs laboratory or medical testing
  • pharmacy
  • any similar institution, employer, or entity

This includes any permanent or temporary institution, facility, location, or site where medical services are provided similar to such institutions. The definition also includes any individual employed by an entity that contracts these types of institutions, employers, or entities institutions to provide services or to maintain the operation of the facility.

The federal district court found this definition overbroad and in excess of the DOL’s authority. In the court’s opinion, the definition requires minimally role-specific determination, not a definition that is based entirely on the identity of the employer.

In the court’s view, the DOL rule includes employees whose role bears “no nexus whatsoever to the provision of healthcare services, except the identity of their employers, and who are not even arguably necessary or relevant to the healthcare system’s vitality.”

How Does this Ruling Impact the Work-Availability Requirement?
The DOL Final Rule provides that an employee is only eligible for mandatory paid leave if the employer has work available. An example is provided of a waitress who is actively seeking a medical diagnosis of COVID-19 but whose restaurant is closed as a result of a state-wide shut down order.

According to the DOL, the question is whether the employee would be able to work or telework “but for” being required to comply with a quarantine or isolation order. An employee subject to one of these orders may not take paid sick leave where the employer does not have work for the employee. This is because the employee would be unable to work even if he or she did not have a qualifying condition.

The district court found several deficiencies in the DOL’s work-availability requirement, including an unsupported reliance on the “but for” analysis as the sole interpretation of the statutory language, inconsistent application of the work-availability requirement, and the court’s view that it did not pass the minimal requirement of reasonable decision making.

How Does this Apply to Intermittent Leave?
The possibility of taking mandatory paid leave in noncontinuous periods is not addressed in the statute. The DOL Final Rule prohibits the taking of mandatory leave when the employee has been required or advised to quarantine but provides for the taking of such paid intermittent leave in other circumstances provided the leave is taken pursuant to an agreement between the employer and employee. The district court found the prohibition of intermittent leave when required to quarantine was reasonable but did not find a reasoned basis for requiring agreement in other situations.

What are the Documentation Requirements Needed?
The DOL’s Final Rule requires that, prior to taking leave, employees submit to their employer documentation indicating their reason for leave, its expected duration, and the authority for quarantine (if relevant to the reason for leave). The Families First Act provides a next day notice rule: “After the first workday (or portion thereof) an employee receives paid sick time under this Act, an employer may require the employee to follow reasonable notice procedures in order to continue to receive such paid sick time.” The court found that documentation requirements as a precondition to leave invalid, to the extent they conflict with the next day rule in the statute or the leave is not foreseeable.

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