EXECUTIVE SUMMARY: With growing availability of vaccines, many employers are considering whether and how to ensure that their workforce remains safe in anticipation of getting their operations back to normal. To meet this need, employers can adopt either a mandatory or voluntary vaccination program. If an employer chooses a voluntary program, it may include incentives to encourage employee participation.
Mandatory vaccination programs are permissible, so long as an employer follows EEOC guidance regarding employees whose disability may make a vaccination inadvisable, or employees who object to receiving a vaccination because of a sincerely held religious belief. Because of widespread skepticism surrounding vaccines, however, employers may want to consider the effect of a mandatory program on employee morale and the risk of legal disputes.
Voluntary vaccination programs are becoming common, especially when accompanied by incentives. Employers must pay attention to the same disability and religious exemption issues present in mandatory programs, and may face additional regulatory compliance obligations. Such voluntary programs, however, avoid employee dissatisfaction that may accompany a mandatory program. Examples of employer incentives in voluntary vaccination programs include offering 2-6 hours of wages, cash bonuses, flexible scheduling to accommodate appointments, and excused absences for employees who suffer side effects from the vaccine.
Now that COVID-19 vaccines are becoming more widely available, many employers are trying determine the best way to get most or all of their workforce vaccinated in order to minimize the likelihood of spreading COVID-19 in the workplace. Mandatory? Voluntary? Incentives? Unfortunately, the federal government has not issued clear guidance on many of these issues. Several states, including Indiana, have introduced legislation designed to limit or prohibit an employer’s ability to force employees to get vaccinated.
Further complicating matters is a somewhat surprisingly widespread reluctance of employees to receive the vaccine for a variety of reasons. Understandably, employers are reluctant to alienate employees or, in extreme cases, run the risk of facing complaints that could lead to litigation.
This memo addresses these issues in three parts: (1) examining employee attitudes regarding the vaccine; (2) employer vaccination program options; and (3) examples of some major employer incentivized voluntary vaccination programs.
EMPLOYEE ATTITUDES TOWARDS VACCINATIONS
While every workforce is different, it is helpful to consider a benchmark of sorts that describes general attitudes toward receiving the vaccine. The chart below compares attitudes from surveys taken by the Kaiser Family Foundation in September, 2020, and December, 2020.
Note that this survey asks participants about vaccines “deemed safe by scientists.” But a substantial portion of the population does not believe the vaccines are safe for a variety of reasons. Some think the vaccines were introduced too quickly under emergency use authorizations to be proven safe and effective. Some simply want to wait until the sample size of vaccine recipients is large enough to provide confidence that the vaccines are safe. Some don’t trust the government that was behind the rapid development of the vaccines. Some believe anecdotal evidence, much of it based on misinformation, that the vaccines can cause severe side effects.
EMPLOYER VACCINATION PROGRAM OPTIONS
Given the widespread reluctance of many employees to get the vaccine, employers must find the right balance between maintaining good relations with these employees and maintaining a safe and productive workplace. Employers can, of course, avoid the issue of vaccinations altogether by continuing pre-vaccination guidance of mask-wearing, social distancing, and regular handwashing, etc., but that may not be a satisfactory solution either in terms of productivity or overall employee morale.
If an employer chooses to implement a program that includes vaccinations for its workforce, there are two options: mandatory and voluntary. Both types of programs must comply with applicable law and regulation.
General Legal and Regulatory Considerations
The CARES Act requires group health plans to cover without cost-sharing all COVID-19 vaccines that have received a recommendation that makes them a “qualifying coronavirus preventive service” with respect to the individual involved. Plans are not permitted to exclude coverage for (or impose cost sharing on) any qualifying coronavirus preventive services. This requirement applies only to non-grandfathered group health plans and does not apply to retiree-only plans.
Therefore, employers who sponsor medical plans must make vaccines available to participants at no cost. Mere mandated availability, however, does not address the issue of whether an employee wants to take advantage of this benefit.
A mandatory vaccination program is permissible, subject to some exceptions. The EEOC essentially says employers can require that employees get vaccinated as a condition of going to work. However, they must be prepared to exempt employees with disabilities and religious objections. In those cases, an employer must offer a reasonable accommodation to the employee—such as working remotely or being reassigned—as long as the accommodation doesn’t cause “undue hardship” for the employer.
The Americans with Disabilities Act (“ADA”) applies when employers make disability-related inquiries or request medical examinations designed to elicit information about a disability. According to the EEOC, a vaccination is not a medical examination. The screening questions asked prior to vaccination administration, however, are likely disability-related inquiries. If an employer offers the vaccine, or contracts with a third party to offer the vaccine to employees (for example, in an onsite vaccination program), then the vaccination program must comply with the ADA’s voluntary wellness program rules.
Employers that ask for proof of vaccination, and nothing more, have not made a disability-related inquiry under the ADA. However, if an employer asks why an employee did not receive the vaccine, then the EEOC has indicated that such a question would be a disability-related inquiry subject to the ADA.
The ADA allows an employer to have a qualification standard that includes “a requirement that an individual shall not pose a direct threat to the health or safety of individuals in the workplace.” However, if a safety-based qualification standard, such as a vaccination requirement, screens out or tends to screen out an individual with a disability, the employer must show that an unvaccinated employee would pose a direct threat due to a “significant risk of substantial harm to the health or safety of the individual or others that cannot be eliminated or reduced by reasonable accommodation.” Employers should conduct an individualized assessment of four factors in determining whether a direct threat exists: the duration of the risk; the nature and severity of the potential harm; the likelihood that the potential harm will occur; and the imminence of the potential harm. A conclusion that there is a direct threat would include a determination that an unvaccinated individual will expose others to the virus at the worksite. If an employer determines that an individual who cannot be vaccinated due to disability poses a direct threat at the worksite, the employer cannot exclude the employee from the workplace—or take any other action—unless there is no way to provide a reasonable accommodation (absent undue hardship) that would eliminate or reduce this risk so the unvaccinated employee does not pose a direct threat.
If there is a direct threat that cannot be reduced to an acceptable level, the employer can exclude the employee from physically entering the workplace, but this does not mean the employer may automatically terminate the worker. Employers will need to determine if any other rights apply under the EEO laws or other federal, state, and local authorities. For example, if an employer excludes an employee based on an inability to accommodate a request to be exempt from a vaccination requirement, the employee may be entitled to accommodations such as performing the current position remotely. This is the same step that employers take when physically excluding employees from a worksite due to a current COVID-19 diagnosis or symptoms; some workers may be entitled to telework or, if not, may be eligible to take leave under the Families First Coronavirus Response Act, under the FMLA, or under the employer’s policies.
Managers and supervisors are reminded that it is unlawful to disclose that an employee is receiving a reasonable accommodation. They also may not or retaliate against an employee for requesting an accommodation.
An employee may object to a mandatory vaccination based on the employee’s sincerely held religious belief, practice, or observance. Once an employer is on notice that an prevents the employee from receiving the vaccination on that basis, the employer must provide a reasonable accommodation for the religious belief, practice, or observance unless it would pose an undue hardship under Title VII of the Civil Rights Act. Courts have defined “undue hardship” under Title VII as having more than a de minimis cost or burden on the employer. EEOC guidance explains that because the definition of religion is broad and protects beliefs, practices, and observances with which the employer may be unfamiliar, the employer should ordinarily assume that an employee’s request for religious accommodation is based on a sincerely held religious belief. If, however, an employee requests a religious accommodation, and an employer has an objective basis for questioning either the religious nature or the sincerity of a particular belief, practice, or observance, the employer would be justified in requesting additional supporting information.
If an employee cannot get vaccinated for COVID-19 because of a disability or sincerely held religious belief, practice, or observance, and there is no reasonable accommodation possible, then it would be lawful for the employer to exclude the employee from the workplace. This does not mean the employer may automatically terminate the worker. Employers will need to determine if any other rights apply under the EEO laws or other federal, state, and local authorities.
Pending State Laws
Before considering the establishment of a mandatory vaccination program, Indiana employers should bear in mind two bills under consideration in the current legislative session that limit the ability of employers to impose mandatory programs. As of this writing on March 11, 2021, neither of these bills has gone through the complete legislative process. Employers should confirm the status of these bills by the end of the legislative session before committing substantial resources to a mandatory program.
Senate Bill No. 74
Synopsis: Workplace immunization prohibition. Prohibits an employer from requiring, as a condition of employment, an employee or prospective employee to receive any immunization if the immunization is medically contraindicated for the employee or receiving the immunization is against the employee’s religious beliefs or conscience. Allows for a civil action against an employer for a violation.
House Bill No. 1488
Synopsis: Vaccination exemptions. Prohibits an employer from requiring, as a condition of employment, an employee or prospective employee to receive an immunization that: (1) has been approved for emergency use; and (2) lacks full approval from the federal Food and Drug Administration (FDA). Prohibits an employer from: (1) inquiring into; or (2) otherwise requiring an employee or prospective employee to disclose; the reason for refusing an immunization that: (A) has been approved for emergency use; and (B) lacks full approval from the FDA. Allows for a civil cause of action against an employer for specified violations.
For the reasons described above, many employers are considering ways to incentivize employees to get vaccinated rather than establishing a mandatory program. Incentives can take many forms, including extra pay, paid time off, gift cards, or tangible gifts. Employers that offer incentives to employees to get vaccinated may be creating group health plans under the Employee Retirement Income Security Act of 1974 (ERISA). In addition, incentivized vaccination programs may need to comply with the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the ADA. Finally, guidance issued under the Genetic Information Nondiscrimination Act of 2008 (GINA) provides a road map for employers to avoid running afoul of GINA.
When an employer provides or pays for employees’ medical care, the employer has likely created a group health plan under ERISA. Because a vaccination is medical care under ERISA, if an employer provides or pays for employees to be vaccinated, then the employer may want to be mindful of ERISA. Certain vaccination programs that incentivize employees to get vaccinated could create an ERISA compliance obligation. Although such a program could be subject to ERISA, compliance is generally not overly burdensome. Many employers may decide to wrap the vaccine incentive programs into their existing medical plans for ERISA compliance purposes.
HIPAA-Covered Wellness Programs
Certain ERISA-covered health programs are subject to HIPAA’s nondiscrimination rules. If a program is subject to those nondiscrimination rules, and an employer wants to incentivize wellness activities (such as vaccinations), then the program must comply with HIPAA’s wellness program rules. Earlier in the pandemic, the U.S. Department of Health and Human Services, U.S. Department of Labor, and U.S. Department of the Treasury provided guidance stating that a wellness program offering COVID-19 diagnosis and testing would not be subject to the HIPAA nondiscrimination rules. However, that guidance did not explicitly extend to vaccination programs.
Without explicit guidance exempting vaccination programs from HIPAA’s nondiscrimination rules, employers that are incentivizing vaccination programs may want to consider how those rules impact their vaccination programs. HIPAA-covered wellness programs that rely on employees satisfying a standard related to a health status factor are called “health-contingent” programs. A health status factor could include an employee’s allergy or other medical condition that makes vaccination medically inadvisable. A vaccination program with an incentive might be considered a health-contingent wellness program because certain employees would be unable to receive the vaccine due to adverse health status factors. An incentive offered by an employer to employees who take the COVID-19 vaccine may then be governed by the HIPAA wellness program rules.
There are two main consequences to a wellness program being considered a health-contingent program under HIPAA: (1) the program must comply with HIPAA’s limits on incentives, and (2) employees who cannot receive the vaccine due to adverse health status factors must be provided a reasonable alternative method for earning the incentive. In general, the HIPAA wellness program incentive limit is tied to the cost of coverage under the employer’s medical plan. HIPAA limits wellness program incentives to 30 percent of the total cost of medical plan coverage (the percentage is increased to 50 percent for programs that include a tobacco-cessation incentive). In applying the limit, all incentives related to health-contingent wellness programs must be included. That is, an employer that already offers incentives for a health-contingent wellness program (such as a premium discount for achieving certain biometric outcomes) must consider those incentives in addition to the vaccination program incentives when applying the incentive limit. All of those wellness program incentives, taken together, must be below the applicable limit.
In addition, HIPAA requires that employees who cannot receive a vaccine due to an adverse health status factor (such as an allergy to the vaccine) be provided with an alternative method for earning the incentive. An employer will have wide latitude in determining the alternative method. It may be a doctor’s note informing the employer that the employee cannot receive the vaccine, or there may be an additional activity that the employee must complete (such as completing targeted training related to reducing the spread of COVID-19). If the employee completes the reasonable alternative standard, the employee must be able to earn the same incentive as an employee who was vaccinated.
The ADA guidance described above in connection with mandatory vaccination programs applies equally to voluntary programs: a vaccination is not a medical examination. The screening questions asked prior to vaccination administration, however, are likely disability-related inquiries.
GINA prohibits employers from requesting genetic information from their employees, except in very limited circumstances. Because GINA defines “genetic information” very broadly, GINA can apply unexpectedly to wellness programs. For example, collecting certain information from an employee’s spouse can be considered genetic information related to the employee. Employers that administer the vaccine or contract with a third party to do so may want to ensure that the screening questions asked prior to administering the vaccine do not elicit genetic information. The EEOC advises employers that request proof of vaccination to warn employees not to provide genetic information as part of the proof of vaccination. For employers that provide this warning, any disclosure of genetic information may be considered inadvertent and not a GINA violation. Employers that provide incentives to an employee’s spouse, or that collect medical information related to an employee’s spouse, may want to be careful when designing their plans to avoid application of GINA.
EXAMPLES OF VOLUNTARY VACCINATION PROGRAMS
This discount grocery chain, which has more than 2,000 stores across 37 states, is offering its hourly employees up to four hours of pay — two for each dose of the vaccine. Its salaried workers will receive flexible hours so they can be vaccinated.
The national train service recently announced its goal to have all of its roughly 20,000 workers vaccinated for COVID-19. To encourage employees to get the shots, Amtrak is offering to pay them the equivalent of two hours of regular wages once they can show proof of vaccination. Amtrak also is allowing workers to take excused absences to recover from any side effects they might experience within 48 hours of receiving the shots.
The company, a yogurt and dairy products maker, said in a statement that it will cover up to six hours of time for hourly Chobani employees to get vaccinated. That’s three hours for each of the two doses required for the COVID-19 vaccines currently authorized for emergency use.
This chain, headquartered in Orlando, Florida, operates 1,815 restaurants across the nation, including such well-known brands as Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, and Eddie V’s. According to the Orlando Sentinel, Darden CEO Gene Lee recently sent a letter to employees announcing that the company will offer hourly employees two hours of pay for each dose of the vaccine they receive (four hours total).
The company will use an employee’s earnings, including tips, over the most recent 13 weeks to calculate the pay rate, with a maximum of $20 an hour, the Sentinel reports. Darden currently employs about 133,000 hourly workers.
With more than 500,000 employees in 35 states, Kroger is the nation’s largest supermarket chain. It has announced it will offer employees a $100 bonus once they can show proof of inoculation. Employees who can’t get the COVID-19 vaccination for medical or religious reasons can earn the $100 bonus by completing an educational course.
The company also has announced that it will be giving all of its essential and frontline workers an additional $100 store credit and 1,000 fuel points for use at its Fuel Centers.
This retail megastore is offering its hourly employees up to four hours of pay to compensate for the time they may have to take off to be vaccinated. The company also will reimburse up to $15 each way for its workers who take Lyft to their vaccination appointments.
This specialty grocery store chain will offer its workers two hours of their regular pay for each dose of the COVID-19 vaccine they receive. Trader Joe’s will also let workers adjust their schedules to accommodate vaccine appointments.