A recent decision by a federal judge in New York could open a door to claims for benefits by furloughed employees under the Emergency Paid Sick Leave Act (“EPSLA”) of the Families First Coronavirus Response Act (“FFCRA”) and the Emergency Family and Medical Leave Expansion Act (“EFMLEA”). It could also cause ongoing confusion for employers as employees stay home due to the lack of on-campus education by schools and day care services.
The EPLSA requires most employers with fewer than 500 employees to provide up to two weeks of paid sick leave to employees who are unable to work due to one of six enumerated reasons. The EFMLEA provides an additional ten weeks of paid leave at two-thirds of their regular wages to any employee who was caring for a child whose school or place of care was closed.
On April 1, 2020, the Department of Labor (“DOL”) issued a Final Rule interpreting the EPSLA and EFMLEA paid leave requirement to exclude benefits to employees unable to work due to three of the six enumerated reasons if their employers did not have work for them. These reasons included that the employee: is subject to a Federal, State, or local quarantine or isolation order related to COVID-19; is caring for an individual subject to a quarantine or isolation order by the government or a healthcare provider; or is caring for a child whose school or place of care is closed, or whose childcare provider is unavailable, because of COVID-19. To illustrate, if the employer had been forced to shutter its operations and the employee performed a job that could not be done remotely, an employee who was caring for a child whose school had been closed would not be entitled to benefits under either the EPSLA or EFMLEA.
On August 3, 2020, a New York federal judge struck down the DOL’s work-availability requirement on grounds that the DOL had exceeded its authority under the statute and that its interpretation was not “reasonable” under the Chevron standard. The State of New York, which brought the lawsuit, argued that statute used mandatory language to describe the obligation to provide paid leave if the employee met the conditions of the law regardless of whether there was available work. The Court agreed with New York and noted that “in ordinary usage, a teacher on paid parental leave [would] still be considered on ‘leave’ even if school is called off for a snow day.”
At this point, it is unclear whether this decision applies nationwide or only in the Southern District of New York. This decision could encourage some furloughed employees who were denied paid leave earlier this year because there was no available work to file claims under the FFCRA. Courts in other jurisdictions would then have to weigh in on the validity of the DOL’s interpretation.
The DOL has not yet indicated whether it intends to appeal this decision, much less whether it intends to seek a stay of its enforcement. At least for the short term, this decision has created some uncertainty on who is entitled to paid leave under the FFCRA, which could make things more difficult for employers weighing certain layoff-versus-furlough decisions. Ultimately, however, employers subject to the FFCRA would benefit if the New York court’s decision were adopted nationwide because the FFCRA provides an offsetting tax credit to employers for any paid leave covered by the law.