ALERT: The DOL has updated its FFCRA rules in response to the federal court decision. Click here to review this important update.
On Monday, August 3, 2020, a federal judge struck down some of the Department of Labor’s rules regarding the Families First Coronavirus Response Act (FFCRA). The court’s ruling will have a significant impact on employers, particular those in the healthcare industries.
The court struck down a number of DOL rules surrounding:
- The healthcare exemption.
- Intermittent leave.
- FFCRA pay when the office is closed or no work is available.
- Leave documentation.
If you are a CEDR Member, you can find a discussion on these updates and ask any questions you might have about them in the CEDR Member Forum.
Not a CEDR Member? Join the conversation in our private, professional Facebook Group, HR Base Camp.
At this time, we do not know precisely what this means for employers.
The DOL can, and likely will, appeal this ruling. Their appeal will also likely ask the courts to allow their existing rules to remain in place as the case plays out. That’s the best case scenario, as it would allow employers to continue to rely on the existing rules for more time.
Alternatively, the DOL may update its rules. That would certainly give more clarity around the current state of affairs. But, having monitored federal law changes for years, we do not have high hopes for that happening quickly.
Another huge unknown is whether the government will apply any changes retroactively — meaning make employers provide pay when they had previously been providing unpaid time off as permitted under the existing rules.
The Healthcare Exemption
The fact that this exemption was being challenged is one of the reasons why we’ve used caution in employers deciding to flat-out exempt.
The court said that this exemption was too broad. The original wording of the law allowed an exemption for healthcare providers, but the DOL essentially ended up saying anyone who worked for a healthcare employer could be exempt.
The court viewed this as allowing an English Professor at a Medical School to fall into the exemption, which is far from what was originally intended.
If the DOL does move forward to modify its rules on this, we expect the definition of “healthcare provider” to be much narrower. Some possibilities:
- The court is pushing for the “healthcare provider” definition from the FMLA, which is quite narrow: “a doctor of medicine or osteopathy who is authorized to practice medicine or surgery.”
- The DOL could rewrite it to only include clinical employees.
- The DOL could rewrite it to only apply to those providers on the COVID-19 frontlines (however they define that).
Until the DOL takes their next action, we simply don’t know.
What Employers Should Do Now
There are far from black-and-white answers right now, so employers need to make their own informed decision about how they want to handle this.
No matter what happens, we fully expect that the healthcare exemption will NOT remain as broad as it is now, but it’s a guessing game as to what it will ultimately look like.
Moving forward, here are your options, in order from most to least risky:
- Continue to operate under the current broad exemption until told otherwise.
- Take a more conservative approach and only use the exemption for direct care providers.
- Completely stop using the exemption.
Using the Small Employer Exemption Instead
Employers may also choose to rely upon the small business exemption. We caution, however, that this can only be used for the childcare component of FFCRA, and the financial burden that must be met is a very high bar.
Small businesses with less than 50 employees can exempt themselves from providing FFCRA paid leave if the employee is unable to work because “they must care for their child if the child’s school or place of care is closed or the child’s care provider is unavailable due to a public health emergency.”
This exemption does NOT apply to any of the other qualifying FFCRA absences.
To use this exemption, the business must be able to show that one of the following is true:
- Providing pay would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
OR - The absence of the employee or employees requesting paid leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities;OR
- There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid leave, and these labor or services are needed for the small business to operate at a minimal capacity.
If you want to utilize this exemption, you do not need to send any materials to the Department of Labor. Instead, document why your business meets one of the three criteria listed above.
You should be able to show that you took the time to look at the employee’s request and how it would have a direct financial impact on your business.
Intermittent Leave
Under the law, employees are permitted to use FFCRA on an intermittent basis. That means they don’t need to use it for full weeks at a time — they can use it in daily or even hourly increments.
However, because using intermittent time can be disruptive to an employer’s ability to schedule complete staffing each day, the DOL Rules require that employees receive the employer’s permission to be able to use time in this way. For many of our members, that has meant being able to require employees to use FFCRA in full-day increments rather than working partial shifts.
Unfortunately, the federal court disagrees that this employer consent requirement is permitted under the original text of the law. What this means for employers is that if an employee can only work a reduced schedule, the employer needs to grant the hours/days off needed as intermittent leave.
FFCRA Pay When the Office Is Closed or No Work Is Available
The law provides FFCRA pay where the employee is unable to work due to certain COVID-19 related reasons.
When the law was first passed, there was great concern that the government would require paid leave even during a temporary business shutdown, as many of our members had to do a short while ago.
The DOL’s Rules, however, clarified that paid time off is not owed when the employer did not have work available to the employee anyway. This could be due to a temporary shut down, or a need to reduce staffing coverage due to business changes.
Unfortunately, the court again is pulling the DOL back to the original verbiage of the law, and insists that FFCRA pay eligibility rests solely on whether the employee falls into any of the qualifying FFCRA conditions.
The fact that the employer may not actually have available work hours for the employee is, apparently, irrelevant.
Leave Documentation
The court’s changes here are less significant.
The DOL was permitting employers to ask that employees make their requests for FFCRA leave in advance, where possible. The court took issue with this, saying that the law permits the employees to use FFCRA as emergency leave, so no advance notice should be required.
Simply put, you can request documentation of the need for leave but cannot require that it be submitted in advance.
CEDR is actively monitoring for any updates and will let our members know when we learn of any changes.
If you are a CEDR Member, you can find a discussion on these updates and ask any questions you might have about them in the CEDR Member Forum.
Not a CEDR Member? Join the conversation in our private, professional Facebook Group, HR Base Camp.
Updated September 17, 2020; originally published August 4, 2020.
