By Mauro Ramirez, Partner, Fisher Phillips
The general public has reacted to the COVID-19 vaccine with both enthusiasm and apprehension. Primary concerns relate to the vaccine’s speedy development when compared to prior vaccines and its potential side effects.
Even healthcare workers have expressed such concerns. According to data collected by the Kaiser Family Foundation (KFF), as of December 2020, about 29% of healthcare workers said that they probably or definitely would not get vaccinated. The Centers for Disease Control and Prevention continues to encourage frontline healthcare workers to vaccinate based on their risk for exposure and their importance to the healthcare system’s ongoing capacity. However, apprehension remains.
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Considering this situation, many employers have grappled with the question of incentivizing employees to take the vaccine. Below we consider two broad incentive categories – paid time off and financial incentives – and the interplay with pertinent employment laws.
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The Cornerstone: An Effective Communication Strategy.
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As an initial and critical point, a robust communication strategy can both educate employees and build trust in the vaccine. Misinformation or lack of information poses a significant challenge. Employees who receive clear information from trusted sources are more likely to get vaccinated. Further, workplaces are small communities. Employees, therefore, are often driven by social interactions and communications. In other words, employees are more likely to feel comfortable taking the vaccine if friends or trusted colleagues do the same. An effective communication strategy may include various tactics designed to build trust regarding the rigor and integrity of the vaccine’s development and approval processes as well as transparency regarding potential side-effects.
Providing educational information and engaging in open communication with employees does not pose significant risk from an employment law perspective. To the contrary, employers should incorporate a rigorous educational communication strategy to accompany any incentive program that offers something of tangible value to workers.
General Legal Parameters.
The legal issues pertinent to incentive programs span various laws including those prohibiting discrimination; requiring accommodations; and setting wage and hour standards. Of particular note are the Americans with Disabilities Act (ADA) and the Health Information Portability and Accountability Act (HIPAA). Under these laws, offering certain incentives to employees – even as innocuous as gift cards – would likely cause your program to be considered part of a “wellness program.”
Unfortunately, the state of the law related to wellness programs currently remains in flux. In January 2021, the Equal Employment Opportunity Commission (EEOC) issued a proposed rule expressly permitting only de minimis incentives as passing muster under participatory wellness programs. The proposed rule contained language referring to a permissible incentive as a “water bottle” or something of equivalent value. However, the Biden administration withdrew the proposed rule under a regulatory freeze, typical during presidential transitions. The proposed rule is now pending review and it is unclear when or what form it may re-emerge. Nonetheless, the EEOC’s commentary on incentives remains instructive. Employers can also reduce the risk of possible claims if they stay out of the actual vaccine administration process, leaving that to an independent third party instead. Even then, however, the ADA and wellness program rules will critical if and when an employee wants to qualify for an incentive, but is unable to do so because of certain medical or religious reasons.
In short, if the value of the incentive is too high, the EEOC believes that employees could feel coerced to participate, thus leading to wellness program rules violations when employees are “forced” to disclose protected medical information in order to gain the incentive. The safest incentives, therefore, are relatively small, and offering more robust incentives will likely come at a higher risk.
- Paid Time Off.
An employer may provide all employees a specific amount of paid time off (PTO), two hours, a half day, or a full day, for example, which could be used to obtain the vaccine. Once the employee receives the time in their PTO bank, it is up to them to get the vaccine of their own accord, but the employer would not mandate nor require proof of inoculation. Since the employer is not mandating how an employee spends their time during this block of hours, you run a very low risk of liability with respect to wage and hour concerns, accommodation issues, or wellness program rules. As a result, this option carries a low risk.
The risk increases, however, if the PTO benefit incentive is contingent or limited in scope. For example, an employer may consider informing employees that, if they choose to voluntarily receive the vaccine, they will be entitled to PTO at a certain level. Under this circumstance, PTO may constitute more than a de minimis incentive depending on the amount. Incentives that are too high may lead to claims that the vaccine was not actually voluntary and therefore a violation of the wellness plan rules. Further, employers should also consider offering the same levels of PTO to those unable to be vaccinated due to valid disability status or religious beliefs as a reasonable accommodation.
- Financial Incentives.
A de minimis incentive is generally a low-risk option with respect to wellness program considerations. Although there is no bright-line rule, a de minimis incentive is a low-cost item, such as a water bottle, a similar item, or a modest gift card (likely at a value of $25 or less). The higher the value, the greater the risk that your program will be seen as unnecessarily coercive and therefore in violation of the wellness program rules. Further, the risk may not outweigh the benefit. According to the Journal of the American Medical Association (JAMA), research shows that monetary incentives are in fact likely to discourage vaccination, particularly among employees who are most apprehensive.
Some employers have attempted a non-direct financial incentive, such as making vaccine recipients eligible for internal drawings for prizes. The pivotal question will be whether the value of participating is so great that it exceeds the de minimis threshold described by the EEOC, rendering the incentive improper. That argument may boil down to whether the value that an employee receives for participating (e.g., a chance to win a bigger prize) is equivalent to the value of a raffle ticket or equivalent to the prize that is ultimately received.
Even with de minimis incentives, employers should still consider reasonable accommodations for employees who establish a legitimate disability or religious related reason for not receiving the vaccine. Employers should also consider potential wage and hour issues arising from providing additional “compensation” to non-exempt employees.
In sum, as the COVID-19 crisis has repeatedly demonstrated, healthcare employers must continue to weigh risks and benefits in making decisions about how to reduce safety risks, while balancing operational needs and potential legal exposure.