Giving bonuses to encourage employees to vaccinate? Proceed with caution

For months, all eyes have been on the progress of COVID-19 vaccination efforts. Now that vaccines are becoming more widely available to the public, employers are also wondering whether they can require employees to get vaccinated to reduce the risk of virus transmission in the workplace. The Equal Employment Opportunity Commission (EEOC) released guidance that strongly suggests employers can—carefully—mandate COVID-19 vaccination as a condition of employment. However, many employers don’t want to go so far as mandating vaccination—and would rather provide incentives designed to encourage vaccination within the workforce.

EEOC regulations proposed earlier this year offered guidance on these types of wellness incentives—but those regulations were unexpectedly withdrawn in February, leaving employers to wonder whether they’re permitted to take any action at all with respect to COVID-19 vaccination.

2021 EEOC wellness plan regulations

The EEOC has always been concerned with programs designed by employers to offer health-related incentives to employees. While wellness programs can provide motivation to keep employees healthy and reduce the costs of health care, they can also be construed as coercing employees into making health-related decisions if the incentives involved are particularly strong. They also present concerns that employers will use health-related information to discriminate on the basis of disability.

Early in 2021, the EEOC released a new set of regulations that would govern whether employers could permissibly offer certain wellness incentives to employees. Those rules were designed to replace regulations that were vacated by court order in 2018.

However, the EEOC opted to withdraw the new regulations in February 2021 in light of questions about their application to vaccine policies and the incoming Biden administration’s regulatory freeze.

Under the new regulations, employers would have been permitted to offer de minimis incentives to employees in exchange for participation in wellness programs, including things like water bottles, low value gift cards and other very small gift items. However, employers who also offered a health insurance plan in conjunction with the wellness program were permitted to offer incentives valued at up to 30% of the cost of coverage.

EEOC views on mandatory COVID-19 vaccines

Even before the release of the now-withdrawn regulations, the EEOC had clarified that administering a COVID-19 vaccine to an employee is not a medical examination for Americans with Disabilities Act purposes. Therefore, employers don’t have to prove that the vaccine is job-related or necessary for business. On the other hand, any pre-vaccination medical screening would trigger these requirements—because those screenings would likely pose questions that could elicit information about health status or a disability.

Under current EEOC guidance, employers can exclude an unvaccinated employee from the workplace if the employer has objective evidence indicating that the presence of that employee creates a direct threat to the health and safety of others in the workplace—and that threat cannot be diminished through reasonable accommodation.

Employers, however, can’t automatically fire employees who refuse to be vaccinated. Instead, they have to determine whether some alternate work arrangement, such as remote work, could be offered.

COVID-19 vaccine-related incentives: Where we are now

Importantly, the EEOC regulations would have offered guidance for employers interested in offering incentives to employees who receive the COVID-19 vaccine, rather than mandating across-the-board vaccination. Those employers should now exercise caution when encouraging employees to get vaccinated.

Even without the restrictive EEOC regulations, employers should always be careful about the size of the incentive they’re offering. Generally, smaller incentives are less likely to be viewed as coercive.

Employers also need to be mindful of the need to offer reasonable accommodation to employees with sincerely held religious beliefs, medical issues or disability that would prevent the employee from receiving a vaccination. In other words, employers may need to provide an alternative way to earn the incentive for employees who will not get the vaccine because of one of these protected reasons.

Reconsider plans to offer incentives

It’s historically been difficult to gauge what types of wellness incentives are permitted in the workplace. Given the lack of current guidance available, employers might want to reconsider any plans to offer bonuses or incentives to employees who opt to vaccinate—and instead simply offer access to information on the safety and advisability of getting vaccinated.

Robert Bloink, Esq., LL.M., has taught at the Texas A&M University School of Law and the Thomas Jefferson School of Law; in the past decade, Bloink has initiated $2B+ in insurance & alternative asset class portfolios, and previously served as a senior attorney in the IRS Office of Chief Counsel for the Large- and Mid-Sized Business Division. Bloink is also the co-author of Tax Facts, a reference solution that helps to answer critical tax questions and provides the latest tax developments.

William Byrnes, Esq., LL.M., CWM, is an executive professor and associate dean of special projects at the Texas A&M University School of Law. A pioneer of online legal education, he also is the author or co-author of 20 tax books and legal treatises. Byrnes is also the co-author of Tax Facts, a reference solution that helps to answer critical tax questions and provides the latest tax developments.

Sources:

1. https://www.klgates.com/EEOC-Withdraws-Proposed-Rules-on-Employer-Wellness-Incentives-Leaving-Uncertain-the-Permissibility-of-COVID-19-Vaccination-Incentives-2-17-2021 
2. https://www.mayerbrown.com/en/perspectives-events/publications/2021/01/mandatory-covid19-vaccination-policies-10-issues-us-employers-should-consider
3. https://www.eeoc.gov/wysk/what-you-should-know-about-covid-19-and-ada-rehabilitation-act-and-other-eeo-laws
4. https://www.natlawreview.com/article/eeoc-publishes-guidance-employer-mandatory-covid-19-vaccination-policies-us 
5. https://www.workforcebulletin.com/2021/02/25/eeoc-withdraws-proposed-wellness-incentive-rules-increasing-employer-covid-19-vaccination-incentive-uncertainties/

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