Update: Read the latest updates on the government’s workplace COVID-19 mandates and ADA accommodations.
What does the workplace look like in a post-COVID world? We’re starting to see it take shape right now, in real time, with companies making return-to-site plans for employees come fall. In advance of implementing a fully on-site or hybrid model of work, employers have numerous considerations to work through: Cleaning and sanitizing practices, updated workstation layouts, safety protocols, and vaccination protocol. Read on for information on vaccine disclosures, privacy concerns, and vaccine mandates and incentives from law firm Jackson Lewis.1
1. Is it lawful for an employer to offer employees a financial incentive to receive COVID-19 vaccinations?
In short, the employer can likely implement an incentive but, depending on how the program is designed, there may be several regulatory considerations and compliance obligations. The issues to consider include:
- The nature and amount of the incentive
- Whether the incentive program is, or is part of, a group health plan
- Whether the employer offers other wellness programs that need to be considered when assessing compliance
- The scope of the questions employers may ask employees to determine whether they have received a COVID-19 vaccination that qualifies them for the incentive
- Whether an employer’s personnel administers vaccinations or contracts with a third-party entity to administer vaccinations on its behalf
- How employers track and disclose which employees are vaccinated and eligible to receive the incentive
- How employers respond to employees who are unable to be vaccinated due to disability, religious beliefs or pregnancy
- Whether a vaccination incentive may have a disparate impact on employees in certain legally protected classifications
2. Is the incentive program a group health plan or part of a group health plan?
A vaccination incentive, in effect, is a form of a wellness program. Wellness programs that are part of group health plans or are considered stand-alone group health plans are usually subject to ERISA, ACA, HIPAA, COBRA and other federal laws governing employee welfare benefit plans. However, one advantage to this model is avoiding the application of certain state laws under the doctrine of ERISA preemption. There are several factors that likely will be considered in determining whether a wellness program is part of the group health plan. This includes without limitation, whether the program description is included in the summary plan description, whether the employee eligibility requirements for the plan are the same as the wellness program, and whether the incentive under the program is in the form of a plan benefit or cost, such as a premium discount.
3. Can an employer ask employees to disclose whether they have received a COVID-19 vaccination as part of a vaccination incentive program?
Yes, this should be permissible under federal law. Given informal, non-binding EEOC COVID-19 Guidance, it appears that asking employees solely to confirm whether they have received COVID-19 vaccinations should not be a disability-related inquiry or medical examination under the ADA. (See Q&A K3 from EEOC COVID-19 Guidance below). As referenced, it is critical for employers not to go beyond confirming vaccination status and/or requesting proof of vaccination. For example, the employer would not be able to ask why employees were not vaccinated and, if it did so, it would trigger other ADA compliance obligations and exposures including the ADA’s regulation of employee health programs that require employees to answer disability-related inquiries. Obviously, state and local law should always be examined.
K.3. Is asking or requiring an employee to show proof of receipt of a COVID-19 vaccination a disability-related inquiry? (12/16/20)
No. There are many reasons that may explain why an employee has not been vaccinated, which may or may not be disability related. Simply requesting proof of receipt of a COVID-19 vaccination is not likely to elicit information about a disability and, therefore, is not a disability-related inquiry. However, subsequent employer questions, such as asking why an individual did not receive a vaccination, may elicit information about a disability and would be subject to the pertinent ADA standard that they be “job-related and consistent with business necessity.” If an employer requires employees to provide proof that they have received a COVID-19 vaccination from a pharmacy or their own health care provider, the employer may want to warn the employee not to provide any medical information as part of the proof in order to avoid implicating the ADA.
4. Can the employer’s personnel administer vaccinations or contract with an entity to administer the vaccination without violating the ADA or other employment discrimination laws?
The EEOC’s guidance raises additional issues which must be considered if an employer administers or contracts with a third-party entity to administer the COVID-19 vaccine. By doing so, pre-screening questions will be deemed “disability-related inquiries” made by the employer, therefore, they must be “job related and consistent with business necessity.” It may be difficult for employers to meet this standard. If employers fail to meet this standard, then they may be found to have made unlawful disability-related inquiries under the ADA. To avoid those additional compliance risks, employers should administer the vaccine and provide any incentives through a voluntary employer-sponsored vaccination program and/or through community vaccination providers with whom the Company does not contract to deliver the vaccinations.
5. Can the employer offer financial incentives as part of a voluntary vaccine incentive program if it simply asks employees to disclose whether they have received a COVID-19 vaccination and/or provide proof of vaccination?
Yes, in this instance, awarding incentives likely would be permissible because the employer is not making disability-related inquiries or medical examinations in connection with the program.
6. Can the employer offer financial incentives as part of a voluntary vaccine incentive program if the employer is administering vaccines or contracting with an entity to administer vaccines on its behalf?
At this time, it is unclear what level of incentive would be considered “voluntary” but “de minimis” (i.e., relatively small or nominal) financial incentives would raise the least risk. On January 7, 2021, the EEOC issued Notices of Proposed Rulemaking (“NPRM”) addressing the ADA’s and GINA’s application to wellness programs. Based on the NPRM, employers that administer vaccines or contract with third-party entities to administer vaccines to employees on their behalf, may award only “de minimis” incentives for the vaccination program to be considered a voluntary program. The NPRM provides an exception to the “de minimis” (i.e., relatively small or nominal) financial incentives that would raise the least risk. On January 7, 2021, the EEOC issued Notices of Proposed Rulemaking (“NPRM”) addressing the ADA’s and GINA’s application to wellness programs. Based on the NPRM, employers that administer vaccines or contract with third-party entities to administer vaccines to employees on their behalf, may award only “de minimis” incentives for the vaccination program to be considered a voluntary program. The NPRM provides an exception to the “de minimis” limitation if the program is part of a group health plan. In that case, the program must comply with the ACA/HIPAA regulations governing wellness programs, along with all other ADA protections (other than the de minimis limitation), such as the obligation to provide a reasonable accommodation where appropriate. These proposed rules, however, were frozen by the Biden Administration and it is unclear whether they will eventually allow the NPRM to advance or revise these proposed rules while in office.
7. Can the employer track and disclose an employee’s vaccination status?
This raises interesting legal and practical issues. Even though asking an employee if they are vaccinated is not a disability-related inquiry, we believe the vaccination record, nevertheless, may be considered confidential medical information. (There may be some arguments to the contrary, but it is prudent for the employer to assume the vaccination record is confidential medical information.) Therefore, the vaccination record, and the employee’s status as being vaccinated, likely are subject to ADA and state/local law requirements for maintaining confidentiality and non-disclosure of employee medical records. In terms of recordkeeping, among other things, the ADA requires medical records and information be collected on separate forms and maintained in separate confidential and secure files. This raises the question of whether employers will maintain copies of vaccination cards and, if so, if they are maintaining paper or electronic copies. Next, will employers be recording employee vaccination status (vaccinated or unvaccinated) on a spreadsheet or database? If so, that resource also needs to be confidential and secure in accord with ADA and state law privacy and data security requirements. Employers seeking to mitigate risks can consider designing and implementing a vaccination program that avoids tracking and retaining vaccination status records. For example, employers might simply ask employees to show, but not submit, proof of vaccination and, upon doing so, provide employees an immediate cash award/gift card. In that circumstance, the employer would not be maintaining any confidential records. This simpler approach may make sense for some employers. In terms of disclosures, employers must consider carefully to whom they might disclose employee vaccination status and how, if at all, vaccination status might impact an employee’s job duties and interactions with co-workers, customers or others. If an employer’s policies or actions cause managers or co-workers to change behaviors towards unvaccinated employees (and certainly if an employer overtly identifies an employee’s vaccination status), such actions might give rise to claims of unlawful disclosure of confidential employee medical information. Navigating this consideration may prove challenging as some employees may equate vaccination status with reduced COVID-19 transmission risks. At this time, however, there is insufficient evidence to support such a connection and we suspect any such disclosures may expose employers to ADA “regarded as” disability discrimination claims. With these considerations in mind, we believe the safest approach right now is for employers to treat an employee’s vaccination status as a confidential medical record and limit disclosure only to those who need to know vaccination status to administer the incentive.
8. Must employers provide the vaccination incentive to employees who are unable to be vaccinated due to disability, religious beliefs or pregnancy?
Employers certainly must consider reasonable accommodation obligations for individuals unable to be vaccinated due to disability, pregnancy or religion. Employers may have to excuse employees from vaccination as a reasonable accommodation under the ADA, but such decisions require a case-by-case analysis and depend on the unique circumstances of each case. Usually, employers ask employees to submit notes confirming it is medically inadvisable for them to comply with a particular wellness requirement. Then, as necessary, employers often create a reasonable wellness alternative or simply waive the requirement and allow employees to receive incentives. If the incentive program triggers ERISA or Affordable Care Act requirements, a reasonable alternative likely also would be required under those laws. We rarely encounter religious-based objections to wellness programs, so it is difficult to predict how courts will assess requests for alternative accommodations under Title VII. Obviously, employers want incentives to motivate meaningful participation, so many will be understandably reluctant to excuse compliance with the requirement in order to obtain the incentive.
9. Will a vaccination incentive have a disparate impact on employees in certain legally protected classifications?
It is difficult and premature to assess whether any legally protected demographic group will be able to successfully challenge a vaccination incentive program. Employers should be concerned about this risk. However, the ADA essentially permits disparate impact claims by individuals (without proof of a class-wide impact) and some polling suggests members of certain racial or ethnic minority groups may be more reluctant to receive COVID-19 vaccinations. Disparate impact claims similarly are possible based on gender, religion, and pregnancy.
10. Is an incentive program safer than mandating vaccinations?
Although uncertainties remain, an incentive-based program likely will pose less financial risk and be safer than a vaccination mandate. Certainly, employers should think through any potential changes in employment status or assignments based on vaccination status, because those situations likely will create the greatest risk of workplace claims or litigation.
11. If the employer encourages but does not mandate employees to be vaccinated and provides a bonus to employees who choose to be vaccinated, must that bonus be considered part of the employee’s regular rate of pay for purposes of computing overtime?
As a general rule, all reward compensation given to a nonexempt employee must be included in the employee’s regular rate of pay for purposes of calculating overtime, unless there is a specific statutory exclusion. A more risk-averse employer may choose to include the bonus in the regular rate for purposes of computing any overtime, as the cost is likely not to be that significant compared to the cost of a legal challenge. For employers willing to take on some additional amount of risk with respect to this issue, they would argue that the bonus falls under the statutory exception of “similar payments to an employee which are not made as compensation for his or her hours of employment.” 29 U.S.C. 207(e)(2).
1 Jackson Lewis P.C. Disability, Leave & Health Management Practice Group.
This material originally appeared in March 2021 COVID-19 Resources and Advice.
This FAQ was prepared by members of the Jackson Lewis P.C. Disability, Leave & Health Management Practice Group. The FAQ provides guidance for employers who are considering offering incentives to employees who receive COVID-19 vaccinations. The FAQ does not assess facts or circumstances concerning a particular employer’s program; nor does it address how a particular employer’s policies, benefits or practices might apply to a vaccination incentive, whether voluntary or otherwise. As general guidance, the FAQ does not identify or analyze every potential issue employers might need to consider. Employers should make informed decisions and tailor policies and practices to their specific needs and risk tolerance before offering incentives to employees who receive COVID-19 vaccinations.This document is not, and should not be treated as, legal advice. Legal requirements, agency guidance and best practices are rapidly evolving. Vaccination incentives may or may not be appropriate for your business and we recommend you obtain legal advice from qualified employment counsel before adopting a vaccination incentive or related COVID-19 policies or practices.
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