Employer Groups Seek Clarity on COVID-19 Vaccination Incentives

As the COVID-19 vaccinations become more widespread, companies are considering whether or not they should require their employees to be vaccinated and/or whether they should incentivize them to do so. Before you decide to provide any type of incentive for getting vaccinated, you should read the article just released by the Society for Human Resource Management (SHRM) below.

SHRM and coalition partners ask the EEOC about financial rewards

By Stephen Miller, CEBSFebruary 5, 2021

As the COVID-19 vaccine becomes more widely available, there are legal factors employers should bear in mind when deciding whether to offer incentives to encourage vaccination.

The Society for Human Resource Management (SHRM) is part of a coalition of employer groups asking the U.S. Equal Employment Opportunity Commission (EEOC) for guidance. These business leaders are seeking answers about whether incentives of more than minimal value are legal.

Answers Sought

In a Feb. 1 letter, SHRM and 41 other business groups asked the EEOC to clarify "the extent to which employers may offer employees incentives to vaccinate without running afoul of the Americans with Disabilities Act [ADA] and other laws enforced by the EEOC." The ADA prohibits employers from coercing employees to participate in wellness activities.

The letter, whose signatories include the U.S. Chamber of Commerce, the National Restaurant Association and the National Retail Federation, states: "Employer-provided incentives can assist governments in quickly and efficiently distributing vaccines," but "[l]egal uncertainty about providing such incentives, however, has many employers concerned over liability and has made them hesitant to act."

The business groups encouraged the EEOC "to define what qualifies as a permissible incentive as broadly as possible."

The letter "is the product of significant concern regarding the legality of a vaccination incentive program," wrote Nicole Kamm, a partner with Fisher Phillips in Los Angeles. She cited a January survey by the law firm in which 43 percent of the 700 employers that responded were unsureabout whether to offer some form of incentive to those workers who receive the vaccine, such as cash, gifts or paid time off (PTO). Many commented that their hesitancy was fueled by legal uncertainty.

Regulatory Limbo Continues

The EEOC has been grappling with employer-paid incentives for participating in wellness activities, and it's unclear whether those activities include receiving vaccinations. On Jan. 7, it released a set of proposed rules limiting the value of incentives awarded for participating in programs that collect employee health information. For the most part, the guidance permitted only items of minimal, or "de minimis," value, such as water bottles or gift cards of modest amounts.

The EEOC concluded that high-value incentives would violate the ADA or the Genetic Information Nondiscrimination Act (GINA) by coercing participation in wellness activities. An exception was provided for "health contingent" wellness initiatives that measure goal achievement in programs that are part of or qualify as group health plans.

On Jan. 20, however, the Biden administration withdrew the proposed regulations from publication in the Federal Register under a regulatory freeze until the newly appointed EEOC chair, Charlotte Burrows, reviews and approves the rules.

In their letter to the EEOC, the business groups stated: "We recognize that wellness incentives have been closely scrutinized over the years and are the subject of recent regulations. We believe, however, that the paramount needs of the current [coronavirus] crisis can be distinguished from wellness programs. We strongly encourage the EEOC to act quickly and provide guidance on this important issue."

Using Incentives

Among U.S. companies that are offering incentives, Amtrak recently announced it will spend $3 million in cash bonuses to encourage workers to get vaccinated. "We believe the vaccine offers the best way to keep our employees safe and contribute to the wellness of local communities," the company said in a statement.

Several big grocery chains have announced similar incentives, with paid time off to visit vaccination sites and bonuses of up to $200, the Washington Post reported.

A survey of more than 1,000 U.S. adults by incentive solutions company Blackhawk Network found that offering monetary incentives to employees could be an effective way to encourage vaccination. According to Talbott Roche, Blackhawk's CEO and president, "Last year's events significantly impacted many Americans' financial security, so it's no surprise that monetary incentives can be effective in motivating people to receive the COVID-19 vaccine." One-third of those responding to the firm's survey said they would be vaccinated for a $100 incentive or less. 

Caution Urged

"Many employers may … incentivize employees to get the vaccine by offering them money or extra PTO days to get the needle," FisherBroyles partner Eric B. Meyer wrote for the SHRM Blog in January. "But, if you're thinking about doing something similar, slow your roll," or you could risk being sued, he advised, referencing the EEOC's proposed rules before they were put on hold.

HR consultancy Willis Towers Watson recommends that employers do not mandate vaccines or add them to an incentive program at this time, noting regulatory uncertainty and other concerns.

Benefits broker HUB International similarly advised that "it is yet to be seen if the EEOC rules will support financial rewards for employees and covered dependents who voluntarily get a COVID vaccination as part of a wellness program. … Since guidance has yet to emerge, employers should proceed with caution" and discuss the issue with legal counsel.

Wade Symons, leader of HR consultancy Mercer's regulatory resource group, recommended, "If providing a vaccination incentive, employers should consider any applicable limitations on the amount of the incentive under the ADA, in addition to the need to provide an accommodation due to disability or religious objection." When an accommodation is required, he said, "the employer would need to consider alternatives to getting the vaccine, such as periodic COVID testing or working remotely, so the employee with the disability-related or religious objection is still able to earn the incentive."

A Different View

Al Lewis, CEO of Quizzify, an employee health care education company, believes that vaccine incentives should be permissible without violating the ADA and GINA, as long as employers don't collect personal health information. Asking whether an employee has allergies that the vaccine might trigger shouldn't be a problem, he said, because "while incentivized COVID vaccines with allergy inquiries would be a technical violation [of the ADA], this is not an example of what the EEOC is trying to prevent. Incentivized flu shots requiring allergy inquiries have been the standard of care for years, even with no safe harbor."

Although the EEOC has yet to weigh in on COVID-19 vaccination incentives specifically, Lewis believes that when it does, it won't bar the incentives. "Don't expect an endorsement," he said. "That's not what they do. But unless they say no … consider their answer to be yes."

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