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Labor Department Hustles to Issue Revised Virus Paid-Leave Rule

Aug. 31, 2020, 8:17 PM

The U.S. Labor Department is quietly working around the clock to complete a revised emergency regulation on virus-related paid leave that will address a federal judge’s move to strike down key aspects of the original rule, according to three administration officials.

The DOL’s Wage and Hour Division and agency attorneys have been scrambling to release an updated regulation in accordance with a Manhattan judge’s decision Aug. 3 that the department illegally interpreted a virus aid law to exclude too many health-care workers from up to 12 weeks of paid family and sick leave. The sources, all of whom spoke on condition of anonymity, said the drafting of the rule was nearing completion, although the precise timing of its publication is in flux and could depend on the White House review process.

The new rulemaking would serve as the administration’s first public response to the opinion from Judge J. Paul Oetken of the U.S. District Court for the Southern District of New York. Oetken ruled that DOL adopted an overly broad exclusion for the health-care sector, vacating that exemption along with three other parts of the rule that set barriers for employees affected by Covid-19 to earn paid leave when recovering from the virus or caring for children whose schools or day cares are closed from the pandemic.

The sources didn’t provide details on how the agency will be revising its interpretation of the Families First Coronavirus Response Act. They also said that issuing a new regulation wouldn’t preclude DOL and the Justice Department from appealing to the U.S. Court of Appeals for the Second Circuit. The original rule took effect April 1, applying only to businesses with fewer than 500 employees.

DOL media representatives didn’t immediately respond to a request for comment, and DOJ has yet to reveal whether it intends to appeal and seek a pause on the district court ruling.

Oetken didn’t replace the original health-care exemption with his own parameters for which health-care providers Congress intended to exclude from the law. The administration also hasn’t issued new enforcement guidance clarifying how the decision will be applied by WHD investigators or whether it affects all businesses nationwide or only those under the New York district court’s jurisdiction. This regulatory vacuum has created widespread confusion among attorneys, employers, and workers as to how their rights and obligations on paid leave have changed.

The trade group for the home-health industry has urged the department to issue a more narrow emergency rule that would make only workers “who have direct contact with patients” ineligible for the paid leave. It’s unclear if that advice will be reflected in the new regulation. The agency’s first regulation last spring declared that all workers at any type of health-care facility, including janitors and cafeteria workers, were subject to the exemption.

Oetken also invalidated pieces of the rule that allowed employers to deny leave if they didn’t have work available; that required workers get employer consent to take intermittent leave; and that mandated employees to provide documentation before taking leave.

The uncertainty surrounding this regulation has gained added relevance now that working parents could seek family leave to assist children who are restarting the school year in virtual classrooms from home. The intermittent leave provision vacated by the Aug. 3 decision appears to have cleared the way for workers to get time off periodically or in half-day chunks as needed to care for their children, regardless of what their employers say.

To contact the reporter on this story: Ben Penn in Washington at bpenn@bloomberglaw.com

To contact the editors responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com

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