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What employers should know about implementing COVID-19 vaccine policies

Employers 08.10.2021

Mandating a COVID-19 vaccine policy is a hotly debated topic among human resource professionals across Corporate America. Ayco’s Compensation & Benefits Policy Research team helps weigh the options for you. 

The current landscape

Since taking office in the midst of the COVID-19 pandemic, President Biden’s leading priority has been ensuring that all eligible Americans are vaccinated against the virus. In a press conference held on April 21, 2021, President Biden urged all employers to do what they can to encourage their employees to get vaccinated. To this end, he also announced a nationwide paid leave tax credit to assist small and medium-sized employers with the cost of providing employees with paid leave to get the vaccine. 

Not only does getting the vaccine offer Americans a degree of confidence in their own immunity to infection, it also makes it easier for employers implementing return-to-work plans. Studies have found that even though employers agree with this approach, only a small handful are taking action on making the vaccine mandatory. Employers that don’t require vaccination for all employees can potentially offer other incentives to encourage more employees to get vaccinated. Employers that don’t mandate vaccination will need to pay even closer attention to safety protocols as they proceed with return-to-office plans.

As you consider the strategies in this article, consult with an attorney to review the specific laws and regulations applicable to your specific organization. Public health guidance on the COVID-19 vaccine (and COVID-19 overall) is continually evolving, making it vital to stay updated on current information and protocols on maintaining workplace safety.


Are employer-mandated COVID-19 vaccine policies even legal?

The short answer is, yes. But as always, there are some considerations to keep in mind.

The U.S. Equal Employment Opportunity Commission (EEOC) has determined that employers are generally allowed to require employees to receive certain vaccinations. However, it’s not clear whether employers are allowed to offer any form of incentive for receiving a vaccination. 

In the U.S. (except in Montana), all employment relationships are considered to be “at-will,” meaning employers can terminate an employee at any time for any lawful reason. Therefore, if the employer implements a lawful vaccine program, they are permitted to terminate employees for not following the policy.

Consider getting legal guidance to structure your COVID-19 vaccine policy before rolling out any form of vaccine program. This will help avoid any legal challenges that could potentially arise.


Federal law considerations

Here are the current regulations and legislation to keep in mind when designing and implementing a COVID-19 vaccine program for your company:

  • Health Insurance Portability and Accountability Act (HIPAA) provides national standards to safeguard the privacy and security of patients’ protected health information
  • Title VII of Civil Rights Act (Title VII) prohibits employment discrimination based on race, color, religion, sex and national origin. In the context of employer-mandated vaccinations, an employee may require an accommodation due to a sincerely held religious belief which prevents them from receiving the vaccine
  • Americans with Disabilities Act (ADA) prohibits discrimination based on disability. In the context of employer-mandated vaccinations, an employee may require an accommodation due to a disability which prevents them from receiving the vaccine. Note that accommodations may only be given for the disability of an employee, not the disability of an employee’s family members
  • National Labor Relations Act guarantees the right of private sector employees to organize into trade unions. In the context of employer policies, it’s generally okay for the employer to implement two versions—one for union employees and one for non-union employees
  • Public Readiness and Emergency Preparedness Act (PREP Act) authorizes the Secretary of the Department of Health and Human Services to issue a PREP Act declaration providing liability immunity for claims related to public health emergencies and countermeasures to those emergencies. The PREP Act contemplates the emergency use authorization of vaccinations and it was declared in order to provide liability immunity for the emergency creation, testing, distribution and use of the currently available COVID-19 vaccines
  • Genetic Information Non-Discrimination Act (GINA) prohibits employers from discriminating against employees or applicants based on genetic information. Employers cannot inquire about an employee’s and/or an employee’s family’s genetic information or medical history (e.g., genetic testing or participation in clinical research)
  • Occupational Safety and Health Administration (OSHA) sets and enforces standards to ensure safe and healthy workplace conditions. OSHA’s General Duty Clause requires employers to provide a work environment “free from recognized hazards that are causing or are likely to cause death or serious physical harm.” Do note, however, that there is currently no federal requirement that companies take precautions to safeguard workers against the airborne transmission of pathogens (which is where COVID-19 would fall)
    • On January 21, 2021, President Biden issued an Executive Order instructing the Department of Labor (DOL) and OSHA to determine whether any federal emergency workplace standards need to be put in place in light of COVID-19. Though the Order stated a March 15 deadline, official guidance was not provided until June 10 when OSHA issued an Emergency Temporary Standard for healthcare employers and general COVID-19 guidance for all workplaces. The updated guidance for all workplaces recommends ways employers can protect their unvaccinated (and otherwise at-risk) employees and help mitigate the spread of COVID-19.
    • Employers should be aware of the federal tax credit for employers who provide paid leave to employees while receiving the COVID-19 vaccine. Pursuant to the American Rescue Plan Act of 2021, this refundable tax credit is available to certain employers (i.e., those with 500 or fewer employees and certain governmental employers) who provide paid time off for employees to obtain the COVID-19 vaccine or recover from any side effects related to the vaccine from April 1, 2021 through September 30, 2021. On July 29, 2021, the Treasury Department expanded on this guidance to permit eligible employers to claim the credit for providing paid time off to employees to take a family or household member or certain other individuals to get vaccinated, or to care for them as they recover from the vaccine.


State and local law considerations

When thinking about administering a vaccine program, be sure to comply with your state and local public health laws. While many states have guidance pending on mandated vaccines, (both for and against), some have already issued guidance, signed executive orders or even enacted legislation. 

 Keep in mind that if your organization does implement a mandatory vaccine program, the vaccine itself will then be considered work-related. It’s a good idea to review applicable state workers’ compensation laws to determine if an adverse reaction to the vaccine by an employee would fall under workers’ compensation.


Types of employer vaccination programs

Your organization may choose to implement a mandatory vaccine program, an incentivized program, an on-site vaccine program or simply ask employees to voluntarily provide their vaccine status.

While employers are generally allowed to mandate vaccination as a condition of employment. you must make accommodations for employees pursuant to Title VII and ADA as explained earlier.

Your company may offer incentives to employees to encourage them to get the vaccine. These incentives may be implemented as a general wellness program or an employee assistance program. The EEOC places limits on general wellness incentives but does not currently provide detailed guidance on vaccine incentives. What it has done is suggest that vaccine incentives be de minimis, as larger incentives could be viewed as coercive or discriminatory. 

Examples of permissible incentives include: 

  • Small cash payments or gift cards
  • In-store credit
  • Paid leave
  • Transportation reimbursement to get vaccinated
  • A water bottle

In order to prevent potential discrimination claims, it’s recommended that companies offer reasonable alternatives for those employees who are exempt from the vaccine. For example, if your company offers a water bottle to those who show proof of receiving the COVID-19 vaccine, make sure you also offer a water bottle to those who are exempt (e.g., have a disability that prevents them from getting the vaccine) if they show proof of a doctor’s note exempting them from the vaccine.

Providing paid time off or an incentive for the vaccine should neither create an ERISA-covered benefit or result in taxable income to the employee.

Employers may wish to administer the vaccine on-site, generally by hiring a third party administrator. With this type of program, HIPAA will likely be triggered if there is a pre-vaccine questionnaire or other form employees must fill out. Additional liability issues above and beyond discrimination potentially include choosing the pharmacy or healthcare provider and the appearance of giving medical advice.

Employers are permitted to ask employees if they have been or plan to be vaccinated. In order to avoid HIPAA violations, the best approach may be for an employer to ask if an employee has been vaccinated, allowing them to simply answer yes or no. An employer is permitted to require proof of vaccination but needs to ensure the proof produced does not contain any private medical information that would violate HIPPA rules. 

If an employer inquires about the vaccination status of employees, they cannot disclose that specific answer to other employees. An employer may be able to make general statements such as “50% of the department is vaccinated.” However, the appropriateness of general statements or aggregated responses will vary depending on the makeup of a company (e.g., saying “50% of the department” may actually violate privacy issues if the department only has five employees).


Could an employer be held liable for not mandating vaccination?

While you consider the consequences of mandating COVID-19 vaccines at your workplace, the reverse scenario—not mandating any vaccine policy at all—can have some important consequences as well. 

  • Could an employee have a cause of action if the employer does not have a vaccine requirement and that type of business is required by law to mandate?
  • Could there be an argument for an employee to sue on the basis of unsafe workplace? 
  • Could not mandating vaccination be a violation of OSHA standards? 
  • If the employer mandated other protective measures (e.g., masks, social distancing) would that be sufficient?

Seeking legal counsel as you consider these options is recommended.


General employer considerations

Due to the sheer unpredictability of the pandemic and the moving goalposts of government guidance, make it a priority to discuss your company’s options and responsibilities with legal counsel before making any decisions related to vaccination mandates. You may also want to touch base with your state workers’ compensation agency, the Centers for Disease Control and Prevention and the National Institute of Health.

Keep a record of your internal and external discussions on mandating vaccines and what steps you take in order to reach your ultimate decision.

If your company is considering incentivizing or requiring employees to get the vaccine, don’t forget to evaluate your workforce’s needs and consider the cost of such a program (e.g., offer free PTO or cost of transportation to vaccine site) while planning for the overall vaccination effort.

Finally, communication is key. Roll out a well-thought-out communications plan that informs your employees of the benefits and potential risks of the vaccine, but avoid sending communications that could sound like medical advice. A recommended way of communicating is by providing links to public health websites and encouraging employees to consult with their healthcare providers.

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