How President Biden’s Vaccine Mandate Impacts Businesses

In his latest effort to curb the spread of COVID-19, President Joe Biden announced new steps his administration would be taking that will have significant impacts on millions of employees and the businesses that employ them. Included in this announcement are directives for the implementation of rules that will require companies (including private) that employ 100 or more people to have their employees vaccinated or undergo at least weekly COVID-19 testing. The directive also included vaccine mandates that affect both public and private companies that contract with the Federal government.

Employers with 100+ Employees

In the coming weeks, the Labor Department’s Occupational Safety and Health Administration (OSHA) plans to issue an emergency temporary standard implementing a requirement for large companies (100 or more employees) to mandate vaccinations or weekly testing for employees. Besides the vaccination or weekly testing requirement, the standard is expected to require these employers to give workers paid time off to get vaccinated or to recover from any side effects of getting vaccinated.

OSHA’s power to issue emergency temporary standards is authorized by statute, 29 U.S.C. § 655(c)(1), which permits the Secretary of Labor to enact an emergency temporary standard “if he determines (A) that employees are exposed to grave danger from exposure to substances or agents determined to be toxic or physically harmful or from new hazards, and (B) that such emergency standard is necessary to protect employees from such danger.” OSHA can do this without going through the normal rulemaking process, however, an emergency temporary standard may only be in place for a period of six (6) months. During this time, OSHA will be working to issue a permanent standard that must go through the typical rulemaking process.

The maximum penalties that can be issued by OSHA is currently $13,653 per violation. The maximum penalty for willful or repeated violations is $136,532 per violation. Thus, failure to comply can prove costly for employers.

There has been no deadline announced for these requirements to be issued, rather just that they will be issued in the coming weeks. It is expected that the specific requirements will become known the day OSHA publishes the emergency temporary standard with such standards having an effective date shortly thereafter, leaving these large employers little time to prepare.

There are currently many unanswered questions including who will pay for the testing of employees, whether this rule will be applicable to employees who work remotely, and how to properly address situations when an employee claims an exception to being vaccinated.

Federal Contractors

President Biden’s Executive Order (EO) regarding federal government contractors does not expressly state that said contractors must have a vaccinated workforce. Rather, the EO directs that all federal contracts entered into on or after October 15, 2021 include a clause that the contractor and any subcontractors shall comply with all guidance for contractor or subcontractor workplace locations published by the Safer Federal Workforce Taskforce for the duration of the government contract. The “clause shall apply to any workplace locations (as specified by the Task Force Guidance) in which an individual is working on or in connection with a Federal Government contract or contract-like instrument.” A key question is therefore how the Task Force Guidance will define “workplace locations.” This yet to be drafted required contract clause is to be included in most new contracts; new contract-like instrument; new solicitation for a contract or contract-like instrument; extension or renewal of an existing contract or contract-like instrument; and exercise of an option on an existing contract or contract-like instrument.

The Safer Federal Workforce Taskforce is directed, by September 24, 2021, to issue such Task Force Guidance including definitions of relevant terms, explanations of protocols required of contractors and subcontractors to comply with workplace safety guidance, and any exceptions. The presumption is that this Task Force Guidance will include a vaccine requirement, with limited exceptions, similar to the one recently mandated for federal workers.

Medical Workforce & Unions

Last week, the Biden administration also announced the requirement for all staff within all Medicare and Medicaid-certified facilities to be vaccinated. Thus, the vaccination requirement expands past just nursing home staff, and now includes hospitals, dialysis facilities, ambulatory surgical settings, and home health agencies, among others, as a condition for such institutions participating in the Medicare and Medicaid programs.

The unions appear to be split on these new directives and the issues they raise. To date, there has not been anything released indicating any special rules for unions. Some unions are taking the position that matters involving workplace requirements and discipline are items that need to be negotiated, as opposed to just being ordered and mandated. Meanwhile, other unions have come out in support of these requirements, including the American Federation of Labor and Congress of Industrial Organizations, which is the largest federation of unions in the U.S.

The specifics surrounding these new directives are currently scarce, with more details to come in the weeks ahead. Gawthrop Greenwood and its team of Business Law lawyers continue to review developments as they unfold. If you have any questions, please do not hesitate to call us at 610-696-8225.