As we discussed in a previous post, the US Equal Employment Opportunity Commission (“EEOC”) published guidance in December 2020 on employer mandatory COVID-19 vaccination policies. That guidance explained that subject to a few exceptions, employers can require that employees receive the COVID-19 vaccine as a condition of returning to, or remaining in the workplace. However, even though mandatory COVID-19 vaccination policies have been deemed permissible by the EEOC, many employers remain hesitant to mandate that their employees receive the vaccine. With that said, as the vaccine becomes more readily available, employers that are looking for an alternative solution to encourage their workforce to receive the vaccine, but without requiring it, may want to consider whether implementing an incentive program would be right for them. Indeed, a number of high-profile employers in multiple industries such as retail, transportation, and food services recently have announced their own incentive programs designed to encourage their employees to receive the vaccine, in lieu of implementing a mandatory vaccination policy.
Employers considering a vaccine-related incentive program do have options when it comes to incentives. For example, employees can be incented to receive the vaccine by through an offer of paid leave for time spent by employees to receive the vaccine during their regularly scheduled work hours, or additional vacation time to be used at a later date. Employers also can provide cash incentives to employees who receive the vaccine. However, there are some considerations employers should take into account when determining if an incentive program would be advantageous for them.
For example, if an employer elects to provide cash incentives, it should ensure that the incentive is large enough to serve as an effective incentive, but not so large that it could be viewed as coercive. The reasonableness of the amount of the cash incentive may vary depending on the industry and workforce makeup, but most employers who have implemented a cash incentive program so far have provided between $75 and $100 to each employee who receives the COVID-19 vaccine. In addition, it is important to note that these cash incentives may qualify as nondiscretionary bonuses under the Fair Labor Standards Act (“FLSA”) and state law, and would therefore need to be calculated into a nonexempt employee’s regular rate of pay when calculating overtime compensation.
Moreover, employers need to ensure that their incentive program does not run afoul of the prohibition under the Americans with Disabilities Act (“ADA”) against employers coercing employees to participate in wellness activities. Although the ADA prohibits employers from compelling employees to participate in such activities, optional wellness programs are generally permitted, so employers should be sure to define their incentive program as voluntary for employees. In addition, employers should avoid collecting personal health information as part of any pre-screening questions or any other part of their incentive program to steer clear of potential ADA or Genetic Information Nondiscrimination Act (“GINA”) violations.
Employers additionally should be careful that any vaccination incentive policy does not discriminate against employees who are medically or religiously exempt from receiving the vaccine. Accordingly, before providing a vaccination incentive, employers should consider any applicable limits on the incentive under the ADA and/or Title VII of the Civil Rights Act of 1964, and the potential need to provide an accommodation due to disability or religious objection. Some employees may have a disability that would make it unsafe for them to receive the vaccine, while other employees may object to receiving the vaccine on religious grounds, for example, due to the use of fetal cells by some manufacturers to make the vaccine. Under these circumstances, employers with incentive programs should consider accommodations that could serve as alternatives to getting the vaccine—such as regular COVID-19 testing or working remotely.
It is important to recognize that even though incentive programs may help facilitate faster and more widespread vaccination of employees, many legal uncertainties about providing such incentives remain and government agencies have provided little guidance to date regarding the extent to which employers may offer employees incentives to vaccinate. Given the current lack of guidance regarding incentive programs related to the COVID-19 vaccine, employers should proceed with caution and seek the advice of counsel before implementing such a policy. Further, when considering whether to implement an incentive program, employers should manage expectations, particularly with respect to employees who are skeptical about the vaccine. Although an incentive may encourage some employees to get the vaccine sooner than they would have otherwise, and may even persuade some workers to be vaccinated who otherwise would not elected to get vaccinated, it will likely not be a panacea that will be able to overcome some employees’ ingrained distrust and suspicions about vaccines generally, or the COVID-19 vaccine in particular. Moreover, before utilizing incentives, employers should review and consider state and local health laws and regulations that could apply to employer vaccination programs.
Employers who decide against implementing an incentive program can maintain a healthy and safe workplace in other ways, such as by encouraging social distancing, remote working, and good hygiene practices, sharing relevant and current CDC information, and providing resources regarding the availability of the vaccine and vaccination sites in their employees’ community.
 In January 2021, the EEOC proposed rules that provided guidance on wellness programs under the ADA and GINA, and indicated that employers could offer a “de minimis” incentive for employees to receive a COVID-19 vaccination. However, the Biden administration formally withdrew the proposed rules because they were not published in the Federal Register by President Biden’s inauguration date. As the vaccine becomes more available, it is likely that the EEOC and/or the US Department of Labor will provide additional guidance regarding vaccine incentive programs.