Vaccine incentive programs: employer considerations

As greater swaths of the population become eligible for vaccination over the coming months, employers who require an in-person workforce are considering vaccines as a way to get their employees back to work safely and their struggling businesses back on track.

For employers wary of implementing a vaccine mandate (especially where current EEOC guidance on employer mandates is fuzzy at best), some are hoping to achieve widespread vaccination of their employees through vaccine incentive programs. These programs provide employees with various benefits in exchange for vaccination including stipends and additional paid time off. However, there are a number of considerations employers should be aware of regarding such programs.

UPDATE: On May 28, 2021, the US EEOC issued updated guidance that addressed vaccine incentive programs. Read more >>

Vaccine incentives

In January 2021, the EEOC issued proposed regulations concerning wellness programs (which would include vaccine incentive programs) however, such regulations were withdrawn under the Biden Administration’s regulatory freeze. While the proposed regulations are no longer available on the EEOC website for review, a January 7, 2021 press release announcing the proposed rule-making states that generally “employers may offer no more than a de minimus incentive to encourage participation in wellness programs.” In the absence of current and controlling guidance however, employers have been left to their own devices in structuring and implementing vaccine incentive programs for their workforces.

Examples of vaccine programs offered by some employers include:

Kroger: $100.00 payment to all associates who receive the full manufacturer-recommended doses of the COVID-19 vaccine.

Instacart: $25.00 Vaccine Support Stipend to offset any loss of wages incurred during the time it takes for an employee to be vaccinated.

Amtrak: Two hours of straight-time pay with proof of vaccination plus excused absences from work to obtain the vaccine.

ALDI: two hours of pay for each dose of the vaccine.

Chobani: up to six hours of paid time (3 hours for each dose) for employees to become vaccinated.

Dollar General: one time payment equivalent to four hours of regular pay upon vaccination.

Employers should tread carefully

Employers should tread carefully, however, as these incentive-based vaccination programs may run afoul of federal anti-discrimination laws such as the ADA and Title VII of the Civil Rights Act.

If a cash incentive for vaccination is offered, for example, to all employees but several employees are unable to be vaccinated due to underlying medical conditions, there is a potential discrimination issue based upon disability under the ADA.

Additionally, while employers offering cash bonuses and other benefits may feel as though they are being generous to their employees, employers must be especially careful in structuring the incentives so that the benefit bestowed upon the employee is not so great as to call into question the voluntariness of the employee’s decision to vaccinate. In other words, if an incentive is too appealing where the employee would be hard-pressed to decline, then that could be construed as a form of financial coercion.

On April 15, 2021, in response to an inquiry from various employer organizations regarding “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 EEOC stated that “agency expects to update its technical assistance about COVID-19 to address these issues, among others, and that work is ongoing.” Employers should continue to monitor the EEOC website for that guidance when it becomes available.

Employers must also be vigilant in monitoring state and local guidance regarding employer mandates of the COVID vaccine. For example, the state of Utah has passed legislation prohibiting governmental employers from making COVID vaccination a condition of employment. This prohibition does not apply to private employers.

RELATED: Employers mandating vaccines – what you need to know >>

Disclaimer: The information contained herein is not intended to be construed as legal advice, nor should it be relied on as such. Employers should closely monitor the rules and regulations specific to their jurisdiction(s) and should seek advice from counsel relative to their rights and responsibilities.

By Megan Butz
General Counsel, HR Compliance, Checkwriters
Megan joined Checkwriters in 2020 and is responsible for reviewing, revising, and implementing internal policies of the company, advising on human resource, employment, and labor matters, and monitoring and publishing state and federal legal updates to the Checkwriters News and Compliance Center for distribution to thousands of clients around the country. Before joining Checkwriters, Megan served as a judicial law clerk for the justices of the Massachusetts Probate and Family Court performing legal research and writing, followed by private practice in Cape Cod.

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