On Thursday, September 9, 2021, President Biden announced his administration’s latest plan to increase the number of Americans who are vaccinated to combat the spread of COVID-19. For private employers, the most significant portion of the plan is President Biden’s direction to the Occupational Safety and Health Administration (OSHA) to develop an Emergency Temporary Standard (ETS) requiring employers with 100 or more employees to mandate vaccinations for their employees or require their employees to produce a negative COVID-19 test result on at least a weekly basis. This ETS is expected to cover approximately 80 million workers.
The Solicitor of Labor has commented that the ETS is expected to be published in the coming weeks. The ETS will go into effect immediately upon publication except for those states with their own OSHA-type laws. Those states will have up to 30 days to conform their laws to the federal edict, and once they do so, the edict will apply to the same employers subject to the federal order, plus other employers the states choose to extend the rule to, such as public employers.
The ETS is expected to require employers to provide paid time off to employees to get vaccinated and to recover from any side effects of the vaccination. Employers violating the ETS may be fined up to $14,000 per violation. This may mean that employers subject to the ETS who are found to have violated it may have to pay a penalty of up to $14,000 per facility at which the ETS was found to have been violated, but these fines may compound by the number of employees or weeks of noncompliance.
While the information provided regarding the planned ETS has prompted a number of questions from employers, most of those questions cannot be answered until the ETS is published. Once published, litigation by its opponents will likely commence. Even if that occurs, at least until a court determines otherwise, employers will have to determine how to respond to the ETS.
Uncertainties for Employers
A key question for many employers is whether they will be covered by the ETS. Neither President Biden’s announcement nor any of the following communications from the Biden administration provide any guidance for employers regarding how OSHA will determine who will be included in the 100-employee headcount. For example, it is not yet clear whether part-time workers will be counted the same as full-time workers, or whether contract workers should be included in any headcount. It is not known whether or not the headcount will be based on a “snapshot” as of a particular date or if a look-back period will be specified. As with any law or regulation based on employee headcount, employers will have to analyze the impact of any potential joint employment relationships or the combination of affiliated entities. While much remains unknown, it is generally expected that employers which are legally required to file EEO-1 surveys will be subject to the ETS.
Employers will also face questions related to employee testing, including whether employers will have to pay for the test and how to handle documentation of those test results. If the ETS does not require employers or the government to pay for the costs of testing, and if state law does not require that employers reimburse these costs, requiring employees to pay for the tests may provide an incentive for employees to become vaccinated. Additionally, requiring employees to pay for testing may create wage and hour problems if the costs result in employees making less than minimum wage. Even if the ETS does not require that employers pay for testing, state and local laws, including California state law, may require employers to reimburse employees for any mandated medical tests as a business-related expense. If employers are required to or choose to pay for testing, there is a concern that this could amount to the creation of a group health plan for the purposes of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) as well as the Employee Retirement Income Security Act (ERISA). The logistical challenges connected with testing documentation for large numbers of employees include ensuring that any test results are maintained separate from employee personnel files and that only those who need to know the test results to protect the workplace are granted access to those results.
Preparing for the ETS
While employers will not have clarity on this issue until the ETS is published, there are certain steps employers can take now so they can respond more quickly once the standard is known. Employers should ensure that they have an accurate employee census that reflects part-time and full-time status as well as a headcount of any independent contractors. Employers should work with counsel to understand what their employee headcount is under other federal laws.
Further, the ETS will likely include a requirement that employers document employee vaccination status in addition to collecting and maintaining required COVID-19 testing results. Accordingly, if employers have not done so, they should begin collecting data from their employees regarding vaccination status. As with test results, any vaccination records should be treated as confidential and maintained separately from personnel files.
Finally, employers covered by the ETS will have to prepare to handle a number of requests for accommodation under the Americans with Disabilities Act (ADA) and requests for religious accommodation under Title VII of the Civil Rights Act of 1964 (Title VII).
In addition to the ETS, President Biden’s plan includes a vaccine mandate for federal contractors and an expansion of the existing mandate for certain healthcare facilities.
On the same day he announced the plan, President Biden signed an executive order applicable to federal contractors, regardless of whether or not those contractors are working at government worksites. The executive order applies to “any workplace locations in which an individual is working on or in connection with a Federal Government contract or contract-like instrument” and requires vaccination, with no testing alternative. This requirement applies to new government contracts or extensions or renewals of existing contracts entered into or renewed/extended on or after October 15, 2021. Certain types of federal contracts are excluded from the executive order (e.g., grants, contracts for employees working outside the United States, and subcontracts solely for the provision of products).
In addition, Centers for Medicare and Medicaid Services (CMS) has been directed to implement rules requiring health care facilities, including hospitals, dialysis facilities, ambulatory surgical settings, and home health agencies, to mandate vaccination of their workforces as a condition for participating in the Medicare and Medicaid programs. The CMS rules will expand the coverage of an existing vaccine mandate previously issued to 15,000 nursing homes.
The new CMS rules will cover about 50,000 providers and more than 17 million workers, the majority of health care workers across the U.S. It is assumed that penalties for noncompliance will follow the same model laid out by CMS for its nursing home mandate, from an initial notice of noncompliance, through civil penalties and withholding of payments, and finally removal from the Medicare and Medicaid programs.
Employers must prepare now for the issuance of the ETS, the forthcoming rules from the CMS, and any new federal contracting obligations. Dykema will issue an e-alert when the ETS is published and when the CMS rules are enacted, but employers should consider reaching out to counsel in advance so that they understand the expected impact of these rules.