New York District Court

On August 3, 2020 a district court judge for the Southern District of New York issued an opinion striking down certain portions of the Department of Labor’s Final Rule interpreting the Families First Coronavirus Response Act (“FFCRA”), including the “health care provider” exemption.

For background, the FFCRA provides two forms of paid leave – emergency paid sick leave (EPSL) and emergency family and medical leave (EFML) – to businesses with fewer than 500 employees. Both laws permit the employer of a “health care provider” to exclude such employees from the application of the EPSL and EFML. The DOL’s Final Rule defined the term “health care provider” broadly, to include, generally, those persons working for entities that provide health care services or those persons working for businesses that contract with or provide services to such entities.

However, the Southern District of New York found the broad definition promulgated by the DOL too “expansive.” The definition was too expansive, according to the court, because it was not appropriately tailored to positions responsible for furnishing health care services. The court did not provide an alternative definition but instead indicated that the definition of health care provider should be limited to those persons capable of furnishing health care services, and not all persons whose work is “remotely related to someone else’s provision of health care services.”

In addition to the Final Rule’s definition of “health care provider” the Southern District of New York also struck down several other portions of the Final Rule, including its applicability for intermittent leave, documentation requirements and eligibility issues.

So what does this mean for those employers relying on the “health care provider” exemption to the EFMLA and EPSLA?

First, for employers using the health care provider exemption for employees furnishing health care services, this decision’s rationale should arguably have little impact. While the Court vacated the Final Rule’s definition of “health care provider,” even under the court’s ruling, the DOL could interpret the FFCRA to permit employers to exclude employees’ furnishing health care services from the application of the EPSL and EFML.

Second, for employers using the exemption for positions not directly related to furnishing health care services, the risk of legal challenge has increased. Indeed, the Southern District of New York held persons in those roles, generally, should not be exempt from the law. As a consequence, they would be entitled to all the rights under the FFCRA and, denial of those rights, would create a federal cause of action. Employees not furnishing health care could potentially include, for example, those responsible for billing, human resources, payroll, janitorial services and other non-health care related services.

Third, the scope of the decision is currently limited. The decision only applies in the Southern District of New York and, of course, the DOL, which is tasked with interpreting the FFCRA, does not see its definition as too expansive. Thus, employers outside of the Southern District of New York can still follow the DOL’s Final Rule, with the knowledge it comes with more risk (see below).

Fourth, this is the first court to squarely address the DOL’s Final Rule definition of health care provider and find it invalid. Inevitably, plaintiffs’ attorneys will use the decision’s rationale to challenge employers’ use of the health care provider exemption in other jurisdictions. Thus, employers can expect much, much more litigation over this issue.

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