DOL New Health Care Provider Definition and Mileage Opinion Letter

Hello Friends!

We have two significant updates that are highly relevant to the home care industry. We also recognize that the government’s continued zig-zagging is highly confusing for many. We provided a briefing on these topics on behalf of the National Association of Home Care and Hospice (NAHC) on Tuesday, September 15. Given the importance of these updates, NAHC has agreed to make this briefing available to non-members for free. The recording can be reviewed here.

DOL’s Emergency Regulations Updating the Health Care Provider Exemption

On Friday evening, September 11, 2020, the DOL issued revised regulations under the Families First Coronavirus Response Act (FFCRA) in response to a New York federal district court’s decision that invalidated a handful of regulatory provisions interpreting the FFCRA. It also added a handful of new FAQs to its website. One such revision is the definition of who is a “Health Care Provider,” which an employer may exclude from being eligible for FFCRA leave. We have covered this issue extensively over the course of the year via presentations and client alerts. You can listen to a recording of our special FFCRA Update held on August 6th in response to the Court’s decision here. Important client alerts regarding this issue were distributed on March 31st and August 4th. We have also prepared a full analysis of these newly revised regulations, which can be found here. Some key takeaways for this industry are as follows:

·   As suspected, the DOL confirmed the nationwide applicability of the New York decision to vacate the DOL’s prior definition of “Health Care Provider” in its new FAQ #102. This means that both the adverse decision in New York and these updated regulations are applicable to all employers covered by the FFCRA, regardless of where in the country the employer operates. This is consistent with what we have been advising you.

·   The revised definition of “health care provider” covers employees who are health care providers under the classic FMLA definition, as well as other employees who are employed to provide diagnostic services, preventive services, treatment services, or other services that are integrated with and necessary to the provision of patient care. This new definition is narrower than the original definition the DOL issued earlier this year.

·   Our industry needs to pay close attention to the meaning of other “integrated” services. These services are those that are integrated with and necessary to diagnostic, preventive, or treatment services and, if not provided, would adversely impact patient care. Specific examples provided by the DOL include "bathing, dressing, hand feeding, taking vital signs, setting up medical equipment for procedures, and transporting patients and samples."

·   The DOL also noted where it expects "health care providers" to work, but noted that these are not the only places. The DOL says the typical work locations for health care providers include a "nursing facility, retirement facility, nursing home, home health care provider, … or any similar permanent or temporary institution, facility, location, or site where medical services are provided." It is important to note that those who work at these locations may not qualify and those who work at locations not listed may still qualify for the health care provider exemption.

·   Unlike with the original regulations, whether a state has declared a class of workers essential for its pandemic response is not relevant under the revised regulations.

·   The revised definition focuses on employees rather than employers and specifically identifies the following types of employees who may continue to be excluded from taking FFCRA paid leave:

1.     nurses, nurse assistants, medical technicians and others directly providing diagnostic, preventive, treatment or other integrated services;

2.     employees providing such services “under the supervision, order, or direction of, or providing direct assistance to” a health care provider; and

3.     employees who are "otherwise integrated into and necessary to the provision of health care services," such as laboratory technicians who process test results necessary to diagnoses and treatment.

·   The revised definition goes into effect on Wednesday, September 16th, and is only prospective in effect so immediate action is recommended.

Where do we go from here? The revised DOL regulations make clear that determination of whether your caregivers may be excluded from FFCRA leave benefits depends on what they are doing and, in some cases, who is supervising them. But even if some of your employees qualify for the exemption, you should also consider whether you should nevertheless provide some types of paid FFCRA leave to them. For example, you may want to offer paid leave to covered caregivers if they contract COVID-19, but not if they would like to care for someone who is subject to quarantine. You should then roll out (or revise if you have already rolled out) your FFCRA policies, notices and forms to reflect those decisions. These documents are part of Littler’s Home Care Industry COVID-19 Response Package. The DOL-approved poster (which you should post if you do nothing else) is available here. Additionally, if you are not sure whether your caregivers would qualify as health care providers, we recommend you speak to an attorney who understands the FFCRA and your business. We, of course, are happy to discuss these issues with you and help you determine whether any of your employees qualify for the exemption and analyze your options.

DOL’s Mileage Reimbursement Opinion Letter

In other news, the DOL issued an opinion letter on Monday, August 31 that might make things slightly better for you. In this opinion letter, the DOL explains that companies aren’t required to use the IRS standard mileage reimbursement rate, but instead may use any mileage reimbursement rate that reasonably approximates the costs incurred by an employee using their own car to drive for company business. The opinion letter also explains which vehicle costs are reimbursable.

The great news is employers may use this opinion letter as a complete defense against monetary liability if using an authorized alternative formula affirmed by the DOL. That is, if an employer can show that it relied on this letter to create a reimbursement policy that complies with one authorized by the opinion letter, that employer will be protected from back pay or other monetary damages even if a court subsequently disagrees with the DOL’s opinion. Read on to learn more. (Full disclosure, our team drafted the opinion letter request!)

Let’s start with something most people don’t know: the Fair Labor Standards Act (FLSA), generally speaking, doesn’t require the reimbursement of business expenses, such as mileage. The major exception, however, is if the expenses are so great that when deducted from the employee’s pay, the employee would earn less than the minimum wage. In those situations, the FLSA does require reimbursement of business expenses. Agencies that pay their caregivers hourly rates that are very close to or at the minimum wage should be reimbursing the mileage. Even for home health agencies and other home care providers that pay clinicians rates much higher than minimum wage, it should be noted that certain states, such as California and Massachusetts, do require reimbursement of mileage for business-related travel. In these states, agencies must reimburse for mileage regardless of the actual hourly (or visit) rate of pay.

The question that comes up most often with our clients is how much should we reimburse employees for mileage? The DOL has long stated that reimbursement at the IRS mileage rate complies with the FLSA. But that rate is untenable for some employers.

So could you reimburse at a lower rate? The regulations were not clear. And, unfortunately, some courts have interpreted them to mean that reimbursement at the IRS rate was legally required. So employers of drivers (such as pizzerias and home-based care providers) have been clamoring for clarity from the DOL.

And this opinion letter delivers (pun intended)! In stating that the IRS rate is not required and instead any reasonable approximation will suffice, the DOL acknowledged that precise calculations of driving expenses are virtually impossible. It explained that the IRS rate is just one of many acceptable methods. But the DOL stopped short of specifically endorsing other methods of approximating employees’ expenses.

The DOL, however, did note that only those expenses attributable to the employee’s use of their vehicle for work need to be reimbursed. Before, there was a lot of confusion over what expenses were subject to reimbursement. For example, if an employee drove an extra 250 miles primarily for the employer’s benefit, the DOL said only variable expenses that the employer would be required to reimburse would be the gas, maintenance, and depreciation costs of the vehicle attributed to those 250 miles. Each situation is unique, but it also said that it is likely that fixed expenses – such as lease payments, insurance (to the extent an employer does not require an insurance rider or greater coverage than state law), sales and use taxes, vehicle registration and license fees, and driver’s license fees – could be excluded from the expense calculation.

As noted above, some states have laws that require mileage reimbursement regardless of whether the expenses, when deducted from the employee’s pay, would bring their hourly rate below the minimum wage. Importantly, this opinion letter should also be beneficial in these states because they generally require reimbursement of an employee’s actual expenses. Employers, therefore, can use this opinion letter to argue that fixed expenses should not be reimbursed because they are not actual expenses.

Where do we go from here? You should document your reliance on this opinion letter to establish your mileage reimbursement policy. At a minimum, this should include a review of your current method for calculating an employee’s actual expenses. This also may include having your favorite attorney review your mileage reimbursement methodology and prepare a legal opinion to establish that your practices for approximating driver expenses are in compliance with the DOL opinion letter. Such a written, legal opinion would help to establish a complete defense to a mileage claim. We are presently working with several companies to evaluate their practices and would welcome the opportunity to work with you, too.

If you have any questions or would like to discuss receiving an opinion letter on either the health care provider exemption or your mileage reimbursement policy, please feel free to reach out to me or my colleague, Will Vail, directly at [email protected] or [email protected].