DOL Revises FFCRA Final Rule: What This Means for Covered Employers
By Fiona W. Ong - Shawe Rosenthal LLP
September 13, 2020
Following last month’s federal court ruling that the U.S. Department of Labor had exceeded its authority under the Families First Coronavirus Response Act (FFCRA) in formulating certain regulatory provisions, the DOL has now issued a revised Final Rule, which becomes effective on September 16, 2020. These revisions do the following: (1) reaffirm the work-availability requirement, (2) reaffirm employer approval of intermittent leave, (3) modify the timing requirement for documentation, and (4) scale back the broad exemption for health care providers. Employers nationwide will need to make adjustments to their FFCRA procedures in accordance with the revised Final Rule.
Background. In the context of the COVID-19 pandemic, Congress passed the FFCRA, which, among other things, imposed two leave mandates on employers with fewer than 500 employees: (1) a two-week emergency paid sick leave (“EPSL”) mandate for employees who are unable to work or telework due to six specific COVID-19-related reasons; and (2) a temporary expansion of coverage under the Family and Medical Leave Act (FMLA), including a ten-week paid leave requirement, for school and child care closures associated with COVID-19 (EFMLA). Significantly, employers are reimbursed for the cost of the leave through a tax credit.
The DOL issued a Final Rule that imposed certain limitations on the availability of paid leave under the FFCRA. The State of New York filed suit, State of New York v. U.S. Department of Labor, challenging portions of the Final Rule as exceeding the authority of the DOL and unlawfully restricting the intended coverage of the FFCRA. The federal court’s ruling in that case upended some of the employer-friendly provisions of the Final Rule, as follows:
• The original FFCRA Final Rule expressly provided that employees are not entitled to EPSL for three of the six listed reasons, nor to any EFMLA leave, if their employer “does not have work” for them. The court found that this “work availability” requirement was not a permissible interpretation of the statute, as the treatment of the reasons was inconsistent and there was no basis for the imposition of the work availability requirement.
• The original FFCRA Final Rule provided that intermittent leave may apply in certain circumstances where risk of workplace infection is not a concern – but only with employer approval. This limitation, however, was rejected by the Court, as “entirely unreasoned.”
• The original FFCRA Final Rule required employees to submit certain documentation regarding the need, duration, and (in some circumstances) governmental authorization for leave, prior to taking the leave. The Court found this requirement to be inconsistent, however, with the FFCRA’s notice provisions, which do not necessarily require advance notice of the need for leave.
• The FFCRA created an exemption by which employers could exclude “health care providers” from the paid leave mandates. The original FFCRA Final Rule set forth a definition of this group that included all employees of any organization providing health care services, as well as supply chain entities and contractors. The court ruled that this definition was “vastly overbroad.” Rather, in accordance with the statutory language, the exempted individuals must be “capable of providing healthcare services,” and not simply related to others’ provision of such services.
The Revised Final Rule and Next Steps for Employers. In the revised Final Rule, the DOL addressed each of the provisions above.
• Work Availability. The DOL doubled down on its work availability requirement. First, it revised the Final Rule to specifically provide that the work availability requirement applies to all six reasons for EPSL under the FFCRA, thereby removing the inconsistency that troubled the federal court.
Then the DOL sought to validate its original position by providing a detailed explanation of its reasoning. In the commentary to the Final Rule, the DOL explained that the language of the FFCRA provides for leave where the employee is unable to work (or telework) due to a need for leave “because” of or “due to” a qualifying reason for leave. The DOL found that this language established a “but-for” standard – meaning that the qualifying reason must be the only reason that the employee was unable to work. In this context, therefore, the DOL explained that, “if there is no work for an individual to perform due to circumstances other than a qualifying reason for leave—perhaps the employer closed the worksite (temporarily or permanently)—that qualifying reason could not be a but-for cause of the employee’s inability to work. Instead, the individual would have no work from which to take leave.” The DOL asserted that this interpretation is consistent with the regular FMLA regulations, which provide that ,“if for some reason the employer’s business activity has temporarily ceased and employees generally are not expected to report for work,” the time that “the employer’s activities have ceased do not count against the employee’s FMLA leave entitlement.” Thus, as the DOL explained, “‘Leave’ is most simply and clearly understood as an authorized absence from work; if an employee is not expected or required to work, he or she is not taking leave.”
Accordingly, the DOL’s original position remains unchanged – employees are only entitled to FFCRA leave if the employer has work available for them, but they cannot perform the work due to a qualifying FFCRA reason. Employees are not eligible for FFCRA leave if an employer has permanently or temporarily ceased operations due to governmental shut-down or stay-at-home orders or a downturn in business. Employees who are temporarily laid off or furloughed where an employer has reduced operations are also not eligible for FFCRA leave. Such employees would, however, be entitled to unemployment benefits.
The DOL did caution employers, however, that they “may not make work unavailable in an effort to deny FFCRA leave,” since “altering an employee’s schedule in an adverse manner because that employee requests or takes FFCRA leave may be impermissible retaliation.”
• Intermittent Leave. The DOL also affirmed its original position that employer approval is required in order to take certain leave intermittently. Again, the DOL sought to buttress its approach by offering additional explanation. Thus, in its commentary to the revised Final Rule, the DOL emphasized that this approach was “consistent with longstanding FMLA principles governing intermittent leave.” As the DOL noted, “[d]epending on the reason for taking FMLA leave, the [FMLA] statute requires a medical need to take intermittent leave or an agreement between the employer and employee before an employee may take intermittent leave.”
In the context of the FFCRA, the DOL asserted that “the employer-approval condition for intermittent leave under its FMLA regulation is appropriate” where there is no risk of COVID-19 contagion. Noting that “[i]t is a longstanding principle of FMLA intermittent leave that such leave should, where foreseeable, avoid unduly disrupting the employer’s operations,” the DOL stated that it “best meets the needs of businesses” to carry this principle through to FFCRA leave. The DOL also noted that the FFCRA requires employer permission to telework, and it is therefore “an appropriate precondition” for teleworking intermittently. Moreover, the FMLA requires employer approval to work intermittently when caring for a healthy newborn or adopted child, which, as the DOL observed, is similar to caring for a child whose school or place of care is closed because of COVID-19. Consequently, as before, employees may only take FFCRA leave on an intermittent basis with employer approval.
Of particular interest as schools reopen, the DOL specifically stated that, “[t]he employer-approval condition would not apply to employees who take FFCRA leave in full-day increments to care for their children whose schools are operating on an alternate day (or other hybrid attendance) basis because such leave would not be intermittent” under the FMLA. (Emphasis added). Rather, “[f]or the purposes of the FFCRA, each day of school closure constitutes a separate reason for FFCRA leave that ends when the school opens the next day.” The DOL distinguishes this from the scenario where the school is closed for some period and the employee nonetheless seeks leave on an intermittent basis.
• Documentation. In the revised Final Rule, the DOL modified the timing of the required documentation so that it is now to be submitted “as soon as practicable,” tying it to when notice is provided. If the need for leave is foreseeable, such as for the closure of a school or child care, both notice and the documentation can be required in advance. In other circumstances involving illness, however, both the notice and the documentation may be submitted after the employee begins leave.
• Health Care Provider Exemption. The DOL retreated from its original broad definition of health care provider, and has now defined the term to include the traditional health care providers under the FMLA and “other employees who are employed to provide diagnostic services, preventive services, treatment services, or other services that are integrated with and necessary to the provision of patient care.” The DOL further explained the types of employees that this new definition includes as follows: (1) nurses, nurse assistants, medical technicians, and any other persons who directly provide the aforementioned medical care; (2) employees who directly assist or are supervised by the direct care providers; and (3) employees who do not provide direct health care services to a patient but are otherwise integrated into and necessary to the provision of health care services, such as laboratory technicians who process test results necessary to diagnoses and treatment (as noted by the DOL, this last may require a case-by-case analysis).
Further clarifying its definition, the DOL set forth a non-exhaustive list of the types of health care employers for which these health care providers work: a doctor’s office, hospital, health care center, clinic, 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, or any similar permanent or temporary institution, facility, location, or site where medical services are provided. It also noted that an employee does not need to work at one of these facilities to be a health care provider, nor does working at one of these facilities render the employee a health care provider.
The Final Rule also set forth the following definitions:
o Diagnostic services include taking or processing samples, performing or assisting in the performance of x-rays or other diagnostic tests or procedures, and interpreting test or procedure results.
o Preventive services include screenings, check-ups, and counseling to prevent illnesses, disease, or other health problems.
o Treatment services include performing surgery or other invasive or physical interventions, prescribing medication, providing or administering prescribed medication, physical therapy, and providing or assisting in breathing treatments.
o Services that are integrated with and necessary to diagnostic, preventive, or treatment services and, if not provided, would adversely impact patient care, include bathing, dressing, hand feeding, taking vital signs, setting up medical equipment for procedures, and transporting patients and samples.
The Final Rule specifically states that “other” employees of health care services employers are not health care providers “even if their services could affect the provision of health care services, such as IT professionals, building maintenance staff, human resources personnel, cooks, food services workers, records managers, consultants, and billers.”
Those employers who previously invoked the health care provider exemption will need to revisit the parameters of this exemption. Many employees who may have been previously exempted no longer fall within the revised definition and will now be entitled to take FFCRA leave.
But even for those health care providers covered by the exemption, employers may wish to consider providing the FFCRA leave if they become sick or are quarantined by order of a governmental agency or doctor. These employees will necessarily have to remain out of the workplace during that quarantine/isolation period, and the employer may as well provide the EPSL and take advantage of the tax credit.
Is the Final Rule Retroactive? One question some employers may have is whether they have to go back and retroactively grant/cover EPSL or EFMLA that now-eligible employees may have requested or used since April 1. In our opinion, the answer is no.
Violations of the EPSL provisions of the FFCRA are subject to the Fair Labor Standards Act remedies. The Portal to Portal Act, 29 USC 259, (which is an amendment to the FLSA), provides as follows:
[N]o employer shall be subject to any liability or punishment for or on account of the failure of the employer to pay minimum wages or overtime compensation under the Fair Labor Standards Act of 1938, … if he pleads and proves that the act or omission complained of was in good faith in conformity with and in reliance on any written administrative regulation, order, ruling, approval, or interpretation, of the agency of the United States specified in subsection (b) of this section, or any administrative practice or enforcement policy of such agency with respect to the class of employers to which he belonged. Such a defense, if established, shall be a bar to the action or proceeding, notwithstanding that after such act or omission, such administrative regulation, order, ruling, approval, interpretation, practice, or enforcement policy is modified or rescinded or is determined by judicial authority to be invalid or of no legal effect.
(Emphasis added). The language above provides a defense as to an employer’s actions that precede the court’s ruling and the issuance of the revised Final Rule.
The EFMLA provision of the FFCRA looks to the FMLA remedies. Notably, there is no similar language under the FMLA. However, reliance on the DOL’s regulations would likely constitute good faith for purposes of determining whether liquidated damages should apply. Also, the DOL would not pursue enforcement actions against any employer who relied upon those regulations prior to the court’s order or the revised Final Rule.
The DOL has revised its extensive and detailed FFCRA Q&A to reflect these changes.
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