By Gerald L. Maatman, Jr. and Paul M. Waldera

Seyfarth Synopsis: The State of New York has filed a lawsuit challenging the U.S. Department of Labor’s recent rule regarding paid sick time and paid family medical leave under the Families First Coronavirus Response Act. New York’s lawsuit signals that the fight over the newly enacted law will continue for some time. Employers are well served to watch the case closely as it winds through the court system.

The Lawsuit

On April 14, 2020, the State of New York filed a lawsuit against the U.S. Department of Labor (“DOL”) challenging the DOL’s recent temporary rule interpreting the paid sick time and paid family medical leave provisions of the Families First Coronavirus Response Act. New York contends that the new rule “den[ies] vital financial support and expos[es] millions of American workers and their communities to further transmission of infectious disease.” Complaint at 1.The new rule gives guidance to employers on the specific circumstances where an employee can take the newly provided leave time.  New York challenges the rule because it believes the rule excludes millions of workers from paid leave who would otherwise be eligible.

Background

On March 18, 2020, the U.S. Congress enacted the Families First Coronavirus Response Act (“FFCRA”).  The FFCRA has two main provisions. First, the Emergency Family and Medical Leave Expansion Act (“EFMLEA”) requires employers with less than 500 employees provide up to twelve weeks of leave for employees unable to work or telework because they have to care for their child.  The first ten days of the EFMLEA are unpaid, and the remaining ten weeks are paid at two-thirds of the employee’s salary.  Second, the Emergency Paid Sick Leave Act (“EPSLA”) requires employers with less than 500 employees to provide employees two weeks of paid sick time, to be used for any of six qualifying reasons.  Both provisions allow the Secretary of Labor to exclude healthcare providers and emergency responders from the requirement.

On April 1, 2020, the DOL released a final, temporary rule interpreting both provisions of the FFCRA.  New York challenges the DOL rule on the basis that it conflicts with the plain language and purpose of the statute by: (i) codifying broad, unauthorized exclusions from employee eligibility; and (ii) creating from whole cloth new restrictions and burdens on employees that appear nowhere in the text of the FFCRA. Complaint at 15.

Analysis Of The Claims

The new rule adds in new and additional qualifications for when an employee can take leave. First, the DOL states if an employer decides they do not have work for the employee, then the employee cannot take paid time off under the FFCRA.  Both the EFMLEA and EPSLA provide leave when an employee is “unable to work or telework” (which might be the rationale of the DOL).  New York challenges this interpretation as not being in the text of the FFCRA and because it would let employers determine when an employee is eligible for leave. The DOL’s interpretation might be a bit strenuous, as the plain language of the FFCRA only requires the employee is unable to work or telework.  If the employer does not have any work for the employee because of a temporary shutdown or furlough, then an employee likely cannot take paid leave, but the DOL’s rule seems far broader than this.

Second, the new rule broadly expands the definition of a “health care provider” excluded from the FFCRA.  The rule includes almost any individual who works at a “site where medical services are provided,” a company that contracts with a medical services site, or any employee that provides medical services or produces COVID-19 medical equipment or tests. New York argues this exclusion would include “a teaching assistant or librarian at a university; employees who manage the dining hall or information technology services at a medical school; the cashier at a hospital gift shop;” or employees who have little or no connection to the actual medical services provided. Complaint at 75. New York argues the new definition provided by the DOL denies millions of employees paid leave. The DOL’s definition of “health care provider” is significantly broader than other federal definitions, making it ripe for challenge.

The DOL’s new rule allows employees to take paid leave on an intermittent basis, only if the employee and the employer agree.  New York challenges the DOL’s authority to make this rule, on the basis that this power is absent from the FFCRA and New York argues this interpretation of the FFCRA is incorrect.  The original draft of the FFCRA allowed employees to take EPSLA intermittently, but it did not allow employees to take EFMLEA intermittently.  Congress removed all references to intermittent leave from the final text of the bill as passed.  As a result, the DOL’s rule seems like a reasonable interpretation of the legislative history, but depending on the Judge assigned to the case and the arguments litigated by the parties, New York might still be successful.

Finally, New York challenges the DOL’s broad documentation requirements.  The text of the FFCRA requires workers to provide reasonable notice before taking paid leave.  The DOL’s rule expanded the employer’s right to request documentation.  The new rule from the DOL requires any employee requesting paid leave under the act provide the: (i) employee’s name; (ii) date(s) for which leave is requested; (iii) qualifying reason for the leave; and (iv) an oral or written statement that the Employee is unable to work because of the qualified reason for leave. Complaint at 88.   Additionally, the DOL rule requires workers to provide additional documentation for each specific reason for leave.  New York challenges all of these document requirements on the basis that they are unduly burdensome and deny eligible employees the ability to take paid leave. Some of the documents employers can request appear reasonable.  Requiring workers to provide the name of the doctor ordering the employee to quarantine, or the name of the government body issuing the stay-at-home order will provide the employer with some rationale for why the employee should take leave. However, some of the document requests appear less reasonable.  The rule requires employees taking time off to care for a child to provide the child’s name, the name of the school or child care provider, and “[a] representation that no other suitable person will be caring for the Son or Daughter during the period for which the Employee” takes leave. Complaint at 90.    While requiring the name of the child’s school might be reasonable, requiring the child’s name and a certification that no one else can care for the child is not related to the text of the bill. The court will likely address each of these new documentation requirements individually, potentially invalidating some.

New York’s Challenges

 

New York seeks relief under the Administrative Procedure Act on the basis that this new rule violates the text of the FFCRA and that the DOL has exceeded their rule making authority.  New York contends that the new rule will cause fewer people to be eligible to take the paid leave, which will cause more people to get sick.  As result, New York claims it will pay out more in unemployment claims, lose tax revenue, and New York hospitals will lose money covering the costs of the uninsured.  New York asks the court to declare these sections of the rule unlawful and vacate the challenged provisions of the rule.

Implications For Employers

All employers with less than 500 employees should monitor this case because it is going to have an impact on when employers have to provide leave under the FFCRA.  What might be a reasonable interpretation of the act today could be very different in a few weeks.  With the federal government beginning to enforce the FFCRA soon, employers need to make sure they comply with the most up to date interpretation of the law.  Right now, employers should comply with the DOL rule, but if the court agrees with New York, employers across the country may have to change how they apply the FFCRA