Labor Department Defends Limits on Paid Sick Leave

Nurses and medical workers react as police officers and pedestrians cheer them outside Lenox Hill Hospital in New York City on April 15. (AP Photo/Frank Franklin II)

MANHATTAN (CN) — The Department of Labor on Wednesday defended a new rule that New York’s attorney general says carves out an especially broad definition of health care providers who would be excluded from paid sick leave protections guaranteed under a coronavirus relief package.

During a teleconference hearing Wednesday in Manhattan federal court, an attorney for New York Attorney General Letitia James acknowledged Labor Secretary Eugene Scalia has the statutory authority to exclude “certain health providers,” but said the expansive definition goes too far.

“The final rule goes far broader than that the narrow delegation and instead sweeps in anyone employed at any institution with any connection to health care, plus any employer who contracts with any such institution, and there’s just nothing in the text of the FFCRA or the FMLA that supports that extremely broad definition,” attorney Matthew Colangelo said.

Congress passed the Families First Coronavirus Response Act, or FFCRA, on March 18 in response to the economic and public health disruption caused by the Covid-19 pandemic. Covering an estimated 61 million workers — nearly 40% of the American workforce — the law requires job-protected emergency family leave and paid sick leave for employees unable to work because of the coronavirus pandemic. It guarantees up to 100% of a person’s salary, capped at $511 per day, for those affected by the virus.

Families also get up to 12 weeks of paid family and medical leave at a reduced percentage of their daily earnings—a benefit only select Americans are afforded through their employers. That measure provides up to $200 per day, per person.

In a 29-page federal complaint filed last month challenging the department’s final rule, James’ office argued that it adopted a particularly expansive definition of who would be exempted from those guaranteed paid sick leave protections under the FFCRA.

The rule, put forth on April 1, allows for the denial of the law’s paid sick leave and emergency family leave benefits to large classes of otherwise eligible workers by including them in an unlawfully extensive definition of “health care provider,” the complaint alleges.  

The Family and Medical Leave Act, passed in 1993, codified exempted health care providers into categories — a doctor authorized by a state to practice medicine or surgery, and any other person determined to be capable of providing health care services.

The Labor Department’s rule, by contrast, would potentially exclude up to 9 million workers in and adjacent to the health care industry by adopting the wider definition of “anyone employed at any doctor’s office, hospital, health care center, clinic, postsecondary educational institution offering health care instruction, 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 permanent or temporary institution, facility, location, or site where medical services are provided that are similar to such institutions.”

The rule would also exempt from paid sick leave protections any support and operations workers for an entity that contracts with the medical providers, as well as any employees of a company that provides medical services, produces medical products, “or is otherwise involved in the making of Covid-19 related medical equipment, tests, drugs, vaccines, diagnostic vehicles, or treatments.”

According to the New York attorney general’s complaint, the sweeping definition would exclude teaching assistants and university librarians, employees who manage the dining hall or information technology services at a medical school, the cashier at a hospital gift shop, and anyone employed by any contractor to any entity listed in the rule, including all employees of a payroll processing firm or vending-machine resupplier.

In a brief filed last week, attorneys for the Labor Department argued that the broad definition of health care provider was designed to effectively deliver essential health care during the pandemic by ensuring that hospitals have adequate staff.

“Doctors cannot provide critical healthcare services without the assistance of the cleaning staff who disinfect healthcare facilities, the managers who keep facilities stocked with supplies, and (to use one of New York’s examples) the hospital cafeteria workers who make sure doctors, other staff, and patients are fed,” wrote Assistant U.S. Attorney Jennifer Jude. (Parentheses in original.)

Jude was joined in Wednesday’s teleconference on the parties’ competing motions for dismissal and summary judgment by Assistant U.S. Attorney Stephen Cha-Kim, who added that the provision under the rule is an optional exclusion and that employers are free to invoke it as they please.

The federal government argued that New York has not met its burden to establish a standing for direct injury.

“First it has not shown a concrete and particularized injury in fact because it has not identified a specific loss of discrete tax revenue nor advanced concrete evidence of increased health care and administrative costs for unemployment insurance that are directly and fairly traceable to the effects of the rule,” Cha-Kim told U.S. District Judge J. Paul Oetken, a Barack Obama appointee.

Arguing for New York, Colangelo told the judge that even the Department of Labor’s own rulemaking – the final rule itself and another 2016 rule on paid leave – included economic analyses that substantiate New York’s claims that the state will be injured economically by an increase in health care costs.

“Namely that restrictions on paid leave will lead to a higher likelihood of illness, and that a higher likelihood of illness in turn leads to costs that will be borne by the state,” he said.  “That’s in fact what the agency said just six weeks ago when it published the final rule.”

Colangelo pointed out that the Labor Department encouraged employers to be “judicious” in applying the definition of health care providers who are exempted by the regulation.

“If in fact the Department thought it was plausible their expansive definition would reduce disease and not increase the spread of disease, they wouldn’t encourage employers to be ‘judicious.’ They would have said ‘employers please use this definition as liberally as you possibly can’,” the attorney said.  

Judge Oetken weighed the rule’s language on Wednesday amidst the global health crisis. “I think if you just had the phrase ‘health care provider’, that would be quite ambiguous,” he said.

“At 7:00 pm, when my neighborhood claps for everybody, they’re not just clapping for the doctors, they’re clapping for the nurses and the people who work in accounting at hospitals who aren’t taking leave,” the judge added. “They’re clapping for all the health care providers in the broad sense.”

Oetken continued, “When you talk about healthcare workers essential to the pandemic we’re living in, it makes sense that it’s a much broader category.”

Colangelo said that the judge’s reference to New Yorkers’ daily celebration of health care workers illustrated who Congress had intended to protect under the FFCRA.

“When we honor first responders every evening, what we’re reflecting is that Congress also elected to honor those workers by making them leave-eligible so that they could go home now and take care of their families and keep their co-workers from getting sick,” he said.  “That’s how we honor first responders and frontline providers.”

Oetken did not rule from the bench and instead took the arguments under advisement.

A Labor Department report released last week showed a more complete picture of the  economic damage caused by the Covid-19 crisis: 20.5 million jobs were lost in April and the unemployment rate skyrocketed to 14.7%.

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