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How President Biden’s Vaccine and Testing Mandates Impact Businesses

COVID testImage by Fernando Zhiminaicela

In his latest effort to curb the spread of COVID-19, President Joe Biden has announced new steps his administration will take that significantly impact millions of employees and the businesses they work for. Included are directives for companies (including private) that employ 100 or more people to have their employees vaccinated or undergo at least weekly COVID-19 testing. The directives also include 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 that implements 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 months. During this time, OSHA will work to issue a permanent standard that must go through the typical rulemaking process.

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

And there may be little time to prepare. So far there is no deadline for OSHA to issue these requirements, only that they 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.

There are also 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 these 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. A key question is therefore how the Taskforce 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.

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The Safer Federal Workforce Taskforce is directed, by September 24, 2021, to issue such Taskforce 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 Taskforce 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.

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Attorney Gordon W. Prince is an associate at the law firm Gawthrop Greenwood, PC, with offices in West Chester and Greater Wilmington. His practice includes business and corporate lawcontractsfinancing and secured transactions. He can be reached at 610-696-8225 or gprince@gawthrop.com

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