UPDATE: After the article below was posted on Thursday 9/9/21, President Biden announced his 6-point COVID-19 Action Plan which includes the requirement for all employers with 100 or more employees to ensure that their employees are vaccinated or tested weekly. It appears that employers with less than 100 employees may continue to offer alternative incentives if they choose not to impose a mandate, as described in the article below. Details of the President’s mandate for larger employers are still unclear. ECRM will continue to monitor developments and keep readers informed.
By Renee Mielnicki, Esquire and Ben Orsatti, Esquire
Since the U.S. Food and Drug Administration (FDA) gave full approval to the Pfizer vaccine, many of our employers have been giving more thought to mandating vaccination of their employees. Some remain torn about making it mandatory and their reasons include a shortage of workers in certain industries.
If your organization isn’t ready to mandate vaccines for your employees, consider the following alternatives that may encourage your employees to get it.
Offer an Incentive
Offering your employees something positive if they get vaccinated, such as a financial reward, may boost your vaccination rate. Examples of incentives are a bonus or extra paid time off. To make an impact, it might be useful to benchmark incentives with other companies. You might also consider a survey of your unvaccinated employees to learn what may motivate them before you decide what incentive you will offer. If you’d like to read more about incentives being offered by other companies, check out this helpful article on AARP’s website.
As you may suspect, there are legalities around offering incentives. Those rules are best explained by the Equal Employment Opportunity Commission (EEOC) in its guidance on the topic: What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Law.
Broadly speaking, the EEOC is a federal agency that enforces anti-discrimination laws. Its guidance is worth heeding since these laws are easily overstepped by incentives that are not structured in a legally compliant way. Here is a summary of what you need to know:
- Federal anti-discrimination laws do not prevent employers from incentivizing employees who voluntarily receive the COVID-19 vaccine from a third party.
- An employer may offer such incentives if the vaccine will be voluntary, performed by a third party, and the incentive is not “so substantial as to be coercive” (likely less than 30% of the total cost for self only health insurance coverage offered by the employer).
- If the employer is administering the vaccines to its own employees, the incentives may not be dependent on the vaccination status of the employee’s family members. The 30% cost rule mentioned in the bullet above will also likely apply.
- Employers may provide information about vaccination to family members of their employees to educate them and raise awareness of its benefits. Incentives can be offered to family members if the vaccine is received through a third party (and the 30% cost rule will likely still apply), but not if it’s received from the employer.
Time Off Will Be Unpaid
Whether an employer must provide paid time off to employees who have been exposed to or are infected with COVID is a big source of confusion for our employers right now. If you recall, Congress passed the Families First Coronavirus Response Act (FFCRA) in 2020. This law required certain employers to provide paid sick leave and emergency family and medical leave. The requirement that employers provide this paid leave was effective from April 1, 2020 through December 31, 2020. The Consolidated Appropriations Act of 2021 extended employer tax credits for paid sick leave and expanded family and medical leave where employers voluntarily provide it to employees until September 30, 2021. However, this Act did not extend an employee’s entitlement to FFCRA leave beyond December 31, 2020. In other words, employers are not required to pay employees for FFCRA leave. That requirement expired December 31, 2020. If an employer chooses to pay for this leave, they can seek a tax credit until September 30th. After that date, even the tax credit expires.
Whether you must pay an employee off of work that is either exposed to or infected with COVID is now governed by two considerations: (1) any state laws that may require you to pay them; and/or (2) whether they are entitled to any paid time off under your policies. In certain cases, this may mean that employees off work due to COVID will go unpaid. Implementing and then communicating such a policy to your employees may encourage vaccination. The flip side to this strategy is it may risk that some employees don’t disclose they are sick or have been exposed, come to work, and spread COVID in the workplace. Be sure to analyze this risk when exploring this option.
Require Stepped-up PPE and COVID Testing
Requiring your unvaccinated employees to wear stepped-up personal protective equipment (PPE) and/or undergo regular COVID testing may also increase your vaccination rates.
Since the beginning of the pandemic, the Centers for Disease Control and Prevention (CDC) has recommended the unvaccinated be masked indoors. At the present time, the CDC recommends the vaccinated wear masks indoors, but only in areas that have substantial or high transmission. Another motivator may be to require the unvaccinated to wear stepped-up PPE, such as a N95 or KN95 mask. However, if you are an employer covered by the Occupational Safety and Health Act (OSH Act), you must first follow its respiratory protection standard, including medical evaluations and fit testing, before requiring employees to wear an N95 mask. Failure to follow this standard is a violation of the OSH Act and will subject you to penalties that could be imposed by the Occupational Safety and Health Administration (OSHA), the federal agency that enforces the OSH Act. The KN95 mask has ear loops, rather than adjustable straps like the N95, and does not fall under the respiratory protection standard.
You might also consider a weekly or bi-weekly COVID testing requirement for your unvaccinated, as well. Using one or both of these approaches may also help reduce the risk of your unvaccinated getting sick at work.
What about the cost? Questions about who pays for a COVID test and whether the employee must be paid for testing time must be explored if testing is mandated by the employer. Here are some helpful tips on pay issues related to requiring the vaccine:
- Costs of the COVID test itself: Health insurance plans are legally obligated to pay for any COVID test that is being performed for reasons related to diagnosis or treatment. Where the test is being conducted for any other reason, plans are not required to pay. That means COVID tests mandated by an employer as a part of a return-to-work protocol or for unvaccinated employees are not required to be paid. Mandatory employer testing could leave employees with a bill of $100 to $250 per test. Some state laws may require that the cost of the test be footed by the employer. Where they don’t, the employer is still likely required to pay. The EEOC’s Enforcement Guidance on Disability-Related Inquiries and Medical Examinations of Employees Under the ADA provides that an employer must pay for all medical-exam-related costs when an employer requires the examination because the employer reasonably believes the employee poses a “direct threat.” According to the EEOC, “COVID-19 poses a direct threat.” Therefore, the Americans with Disabilities Act (ADA) would most likely require an employer to cover the costs of diagnostic testing related to keeping that direct threat out of the workplace.
- Paying Employees for Test Time During Work Time: The Fair Labor Standards Act (FLSA) requires an employer to pay non-exempt employees for the time spent undergoing testing during the workday as well as time spent waiting for and receiving medical attention at their direction or on their premises during normal working hours. Other laws may offer greater protection and, in those cases, must be followed. For our exempt employees, the salary basis requirement would require they be paid for test time during work time. Time spent traveling to and from the test would therefore also need to be paid by the employer.
- Paying Employees for Test Time During Non-Work Time: Where a COVID test is done on non-work time, the employer must pay the employee if the time spent is considered “compensable” time. According to the U.S. Department of Labor, undergoing COVID-19 testing may be compensable for many employees because the testing may be necessary for them to perform their jobs safely and effectively during the pandemic. For example, where the test is mandatory because an employee regularly interacts with the public, such as a grocery store cashier, it is most likely that the employee must be paid. If testing doesn’t fit this category, it may not need to be paid if the employer doesn’t dictate where and when the test takes place. Again, state law may provide greater protection so it would need to be reviewed as well. To avoid these complicated questions, it might be easiest to require employees to get tested during work time at either the beginning or end of a shift, somewhere close to the worksite, and pay them.
Implement Healthcare Premium Surcharges
This one you have probably already heard about on the news. Delta Airlines is the first, that we know of at least, that will be charging unvaccinated employees on their health plan a $200 per month surcharge. Their reasoning was because the average hospital stay for COVID was costing them $50,000. Here is our analysis of this option.
To begin, this area of the law is untested and it is not entirely clear at this time if this option is legally permissible. If it is, we think it would need to be implemented as a wellness incentive program to ensure compliance with the Health Insurance Portability and Accountability Act (HIPAA) and the Affordable Care Act (ACA). There is no specific guidance yet on wellness programs related to vaccine incentives. However, some experts believe it might be permissible in certain circumstances. Guiding considerations might be:
- The amount of the surcharge should not exceed 30% of the total cost for self-only health insurance coverage offered by the employer.
- How does the surcharge interact with other wellness incentives offered? There are rules on total maximum rewards you can offer for wellness incentives. For example, if you offer incentives for smoking cessation, the total incentive for both cannot exceed 50% of the total cost of healthcare coverage.
- How long should plan participants have to get fully vaccinated? Shorter deadlines are most beneficial to quickly boost vaccination rates.
- What proof will be required to establish vaccination and to identify forgeries such as fake vaccination cards? What will be the consequences for a participant who submits forged documents?
- As COVID-19 variants continue to emerge along with more talk of vaccine boosters, should the program also include boosters, if available?
If you are an employer with questions about any safety, workers’ compensation, or human resources issue, contact East Coast Risk Management by calling 724-864-8745 or emailing us at firstname.lastname@example.org. We will be happy to help!
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