Question: Some of our employees have expressed concern about the possibility of a mandatory vaccine policy. What could we do to incentivize our employees to get vaccinated against COVID-19? What legal issues should we worry about?
Answer: The Centers for Disease Control and Prevention (CDC) has released a Vaccination Toolkit for Essential Workers, which includes a training slide deck, FAQs, and sample messaging that you can customize to communicate accurate information about vaccines. Although the CDC guidance refers to essential workers, the information applies to any workforce. For the manufacturing industry, the National Association of Manufacturers (NAM) has developed a program called “This Is Our Shot,” to help encourage COVID-19 vaccinations for manufacturing employees and their families. NAM offers several resources, as well as a recorded public service announcement entitled, “Love Frank.”
Some companies have considered offering bonuses to incentivize workers to get the vaccine, especially in high-risk industries. However, if an employee’s disability or religious belief prevents them from being vaccinated, you should offer a reasonable alternate option for obtaining the bonus. For example, one idea might be to send company-provided cards of encouragement to a local senior care center.
It’s possible that offering a bonus in exchange for proof of vaccination may implicate federal rules governing wellness programs, although the Equal Employment Opportunity Commission (EEOC) hasn’t yet weighed in on this exact question. Participation in any wellness program must be voluntary in order to avoid a violation of the Americans with Disabilities Act (ADA). There are limits on the value of wellness incentives you can provide to employees. The Health Insurance Portability and Accountability Act (HIPAA) permits employers to offer up to 30 percent of the total cost of employee-only health plan coverage as an incentive for employees to participate in a wellness program. In early January, the EEOC issued proposed ADA regulations limiting the value of incentives that can be offered in a wellness program that obtains medical information, permitting only “de minimis” incentives, such as a t-shirt, with limited exceptions allowing qualifying group health plans to follow the HIPAA 30 percent standard. The Biden administration has placed a regulatory freeze on these proposed rules, pending review. The apparent conflict between the HIPAA rule and the EEOC’s interpretation of “voluntary” under the ADA remains unresolved. One step you can take to reduce the risk of your vaccine incentive being deemed a wellness program is to avoid directly sponsoring a vaccine clinic, because that could entail health care professionals asking medical questions at your direction – instead, encourage employees to make their own arrangements to obtain the vaccine from a third party.
If you pay a bonus in a flat amount such as $25, the federal Fair Labor Standards Act requires you to pay overtime on the bonus for any nonexempt employees who work overtime during the workweek in which you pay the bonus. This means the amount you actually pay to those employees who worked overtime will be more than the $25 paid to coworkers who didn’t work overtime. See our Legal Guides, Effect of Bonus Payment Plans on Overtime Pay for Hourly Employees and Effect of Bonus Payment Plans on Overtime Pay for Nonexempt Salaried Employees.
You should also evaluate whether you want to pay employees for their time getting the vaccine. This might include allowing employees to be vaccinated during regular work hours or paying them for an after-hours trip to a clinic. The more you’re involved in the vaccinations, the more likely it is that an employee may file a workers’ comp claim if they have an adverse reaction that requires medical attention or time off work. According to the CDC, it’s common for people to experience side effects such as swelling, fever, and chills for a few days after getting a shot. (This is different from the much rarer occurrence of allergic reactions to the vaccine.) Because of the common side effects and the likelihood that people may need to miss work after one or both of the two shots, you probably shouldn’t encourage your entire workforce or an entire department to get the vaccine at the same time. You may also want to suggest they try to schedule their shots toward the end of their workweek, to minimize the amount of time they may need to miss from work. If that isn’t practical, due to the limited availability of vaccines, you should establish contingency plans in case you’re short-staffed.
Finally, union-represented employees may have rights that preclude a mandatory vaccine requirement or impact your ability to implement an incentive program. You’ll likely need to get the union’s agreement before taking action.
We know that this is a new, unfamiliar area for many of our employers as it continues to evolve from an employment law and public health perspective. Please reach out to your benefits adviser and your Vigilant Law Group employment attorney before implementing a mandatory or voluntary vaccine program with incentives in your workplace.