The Wild West of Vaccine Incentives

What you need to know about corporate vaccine incentives

As COVID-19 vaccines are now available to all adults in the US, many employers are considering offering vaccine incentives to their employees and President Biden is making it more enticing. Last week the POTUS called on all companies — big and small — to offer paid time off for employees to get a COVID-19 vaccine dose and/or recover from any side effects, and he laid out the details of a tax credit to help small businesses afford such leave.

But don’t saddle up too soon as there are factors to consider in order to avoid getting sued.  

In a December 2020 publication, the Employment Opportunity Commission (EEOC) outlined that employers can require employees to get vaccinated as a condition of going back to work — with qualifying accommodation requests. Many organizations have said they will not require workers to get vaccinated; but, will instead encourage them to do so. That is a big difference!

“How,” you ask? By providing incentives and keeping a vaccination program voluntary. Many employers are offering perks such as additional PTO, gift cards, free rides to and from vaccination site, and even cash to employees who provide proof of vaccination. Some advice:  keeping the program voluntary is slightly simpler and avoids many of the legalities of a mandatory system; but enter at your own risk as it also carries its own complexities in a complicated and unsettled area of the law.

Back to the EEOC… the Commission has been grappling with employer-paid incentives for participation in wellness activities for some time; and, it is still not clear whether the COVID-19 vaccine will fall within the parameters of wellness activities. On Jan. 7, 2021, the EEOC released a set of proposed rules limiting the value of incentives awarded for participating in programs which  collect employee health information.

Employers need to consider limitations on the amount of the incentive under the ADA, in addition to the need to provide an accommodation due to objection based on disability or religious beliefs. When an accommodation is required, the employer would need to consider alternatives to getting the vaccine, such as periodic COVID-19 testing or working remotely, so the employee with the disability-related or religious objection is still able to participate in the incentive.

Ok, so here is another administrative step to consider:  Cash bonuses to incentivize employee vaccinations carry wage and hour risks.  Such payments could be deemed nondiscretionary bonuses under the Fair Labor Standards Act (FLSA) and would require ancillary overtime adjustments for some employees. Nondiscretionary bonuses must be included in an employee’s regular rate of pay when calculating overtime, so in the pay period in which an employee receives a vaccination incentive bonus, the employee’s regular rate of pay may also increase. Did you catch that? Any overtime compensation the employee earns during that period would also increase. This may create a slight, unanticipated payroll expense and an additional administrative burden for the employer.

What about new hires? There is an emerging trend where employers are requiring that candidates be vaccinated or be willing to get their COVID-19 shot within 30 days of hire.

Now onto proof… Can an employer ask for vaccination proof? Yes. According to the EEOC (Question K3), simply requesting proof of receipt of a COVID-19 vaccination is unlikely to elicit information about a disability, and therefore is not a disability-related inquiry. But the questions should stop there.  Be cautious and do not ask about why an individual did not receive a vaccination. This “why” question is where you may inadvertently elicit information about a disability.

How can you protect yourself? Simplify it to a “yes” or “no” signed questionnaire or ask for proof and warn the employee to not provide any medical information as part of the proof to avoid implicating the ADA. Oh, and it is very important that employers stay consistent in their policies as well. Employers should not single out certain employees or departments to provide proof and should implement the same requirements for all similarly situated employees. 

So, what can you do? The CDC Says Employers Should Create Supportive Policies: The U.S. Centers for Disease Control and Prevention (CDC) said employers can help increase vaccinations among essential workers by providing information about vaccines and creating supportive policies.

By providing information about the COVID-19 vaccination and establishing supportive policies and practices, employers can help increase vaccine uptake among essential workers. Although COVID-19 vaccine supplies are currently limited, it is not too early to share clear, complete, and accurate messages, promote confidence in the decision to get vaccinated, and engage your employees in plans to address potential barriers to vaccination. Strong confidence in the vaccines within your workplace leads to more people getting vaccinated, which leads to fewer COVID-19 illnesses, hospitalizations, and deaths.

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