Southern District of New York’s Decision to Invalidate Health Care Provider Exclusion and Work Availability Requirement of FFCRA May Have Implications for Connecticut

by Stephen M. Cowherd and Daniel P. Scholfield

In what promises to be a significant ruling, this week a federal judge for the United States District Court for the Southern District of New York vacated several key aspects of the Families First Coronavirus Relief Act (FFCRA), including the regulatory definition of a “health care provider” which the court found to be “vastly overbroad.”[1]  Accordingly, the decision leaves open to question – at least in New York – the extent to which health care employers can exclude their employees from the paid leave provisions of the Act.  

The paid leave provisions of FFCRA – which generally require private employers employing fewer than 500 employees and certain public employers to provide up to 80 hours of paid sick leave to workers with one of six qualifying COVID-19-related conditions, and also entitle employees who are unable to work because they must care for a dependent child due to COVID-19 to paid leave under the Emergency Family and Medical Leave Expansion Act – have been a maze for many company human resources departments.  That the law gives employers a corresponding tax credit for the payment of these benefits has not made its application any easier as it has already spawned more than 90 Frequently Asked Questions on the U.S. Department of Labor’s (DOL) website:

Specifically, FFCRA permits any employee who is a “health care provider” to be excluded from the paid-leave programs under certain circumstances, and further granted the Secretary of DOL authority to define which type of employees qualify as “health care providers” for this purpose. In response, the DOL promulgated a regulation that defined “health care provider” as any employee employed by any health care entity, including employees of subcontractors hired by health care entities. The district court found that this definition went far beyond the relevant statutory definition of a health care provider as set forth in the Family and Medical Leave Act (FMLA) which is: “(A) a doctor of medicine or osteopathy who is authorized to practice medicine or surgery …. or (B) any other person determined by the Secretary to be capable of providing health care services.”

According to the court, the DOL’s definition was broad enough to include an English professor, librarian or janitor at a university with a medical school. That was impermissible, the court concluded, because the statute required the DOL to determine that the person (i.e., the actual employee) is capable of providing healthcare services and not that their work is remotely related to someone else’s provision of health care services.

In its ruling, the court also struck down the DOL’s so-called “work availability requirement” which denies both paid sick leave and expanded family leave benefits to employees whose employers do not have work for them.  Instead, the court found that the DOL’s regulation that applied the work availability requirement to three[2] of the six qualifying conditions for paid sick leave was “entirely unreasoned” and that the agency more broadly could not sufficiently prove it had statutory authority to impose the requirement in the first place.  Finally, the court also vacated certain aspects of the DOL’s regulation requiring that, before taking leave, employees provide notice indicating their reason for leave, the duration of leave and, when relevant, the authority for any isolation or quarantine order qualifying them for leave, on the basis that FFCRA contemplates that in some circumstances the need for leave may be sudden and unforeseeable.

What does this mean for Connecticut? As of right now, the decision apparently applies only in New York.  In particular, before concluding that the regulation was impermissibly broad, the judge was first required to address whether the State of New York had standing to challenge the DOL regulation. The judge concluded that it did, but only because there was evidence that the DOL regulation would cause a “proprietary injury” to the State by reducing its income tax revenue (if employees were given unpaid leave, rather than paid leave under the FFCRA, for their COVID-19 related sick-time) and also by increasing the financial burden on the State’s health system if employees who were forced to work led to increased transmission of the virus. Further, the judge did not otherwise indicate that his order was meant to apply nation-wide. The court’s opinion thus suggests that the immediate effect of the decision is limited to New York.

The DOL is appealing the decision to the United States Court of Appeals for the Second Circuit. Even if the Second Circuit ultimately affirms the decision that does not necessarily mean that it will take immediate effect in Connecticut or in Vermont – the other two states within the Second Circuit.  Nonetheless, a decision by the Second Circuit will probably determine how Connecticut’s U.S. District Court will treat the issue if it is presented here.  

Pullman & Comley will be monitoring the case and is prepared to provide further guidance once the Second Circuit issues its decision.

[1] State of New York v. United States Department of Labor, 1:20-cv-03020(JPO) (S.D.N.Y. August 3, 2020).

[2] In its final regulations, the DOL limited the work availability requirement when an employee sought paid seek leave because the employee was subject to a quarantine order, because the employee was caring for an individual who was subject to a quarantine order or was told by a health care provider to self-isolate, or because the employee was caring for a child whose school was closed due to COVID-19.

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