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Covid Vaccination Incentives: The Risks And Rewards For Employers

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Offering incentives to workers to get their vaccine shots for Covid-19 — as Dollar GeneralTrader Joe’s, and Instacart said they plan to do—appears to be a generous and important gesture that can help address the worsening pandemic. But is the carrot and stick approach right for all companies?

Dr. Bob Bollinger, a professor of infectious diseases at Johns Hopkins University, said,  “To stop this epidemic and get us all back to a new normal as soon as possible, we will need all segments of society to increase community uptake of vaccination[s].

“Companies have an important opportunity to contribute to this effort. Incentives could certainly be considered as one component of a company’s broad and comprehensive strategy to encourage and support vaccination of their employees,” he noted.

Offering Multiple Incentives 

John Ross, the CEO of Test Prep Insight, an online education company with 10 employees, offers them more than one incentive. Because he heard some people may experience side defects after their second shot, “I’m giving employees the day off after they get their second dose of the vaccine, plus the two following days off paid, regardless of whether they actually have a reaction.”

After his employees receive their second shot, Ross said he will give each of them a $100 gift card for Starbucks, Amazon or REI. Then, after all the workers have received the vaccine, “I will take them all out to dinner at a nice steakhouse, where I [will] pick up the tab. They can order whatever they want—[appetizers], wine, surf and turf—I don't care. I am hoping this last incentive creates some peer pressure amongst employees, as I really want them all to get the vaccine.”

Ross started offering the incentives on January 1. “The response has been overwhelmingly positive, and every one of our 10 employees has indicated a willingness to participate and get their vaccine.”

His approach, of course, might not work for cash-strapped companies and organizations with a large number of employees.

Saying No To Incentives

Some business executives, however, are not eager to jump on the vaccine incentives bandwagon.

Bryan Towey is the founder and CEO of The Bryan Towey Organization, which has over 100 employees around the world. “My organization will not be offering incentives to employees who choose to take the vaccine. The decision to take a vaccine is personal and should not involve outside influences. While many companies may be antsy to get back to normal as soon as possible, getting involved with the medical decisions of employees is a slippery slope,” he said. 

Startup company Get Golden Visa decided against offering incentives. After considering the benefits and disadvantages, Charles Taylor Harris said, “...there are the legal concerns, particularly in a liability-heaven like the U.S. We ultimately decided not to go ahead with a vaccine compensation for our employees in order not to cause any liability issues. “ 

Harris, who is a director of the company, predicted that,”It won't be long before we start seeing legal ads reading ‘If you received the Covid-19 vaccine in 2021, you may be entitled to compensation.’”

A Debatable Issue

Joseph Slater, a law professor labor at The University of Toledo College of Law, said, “Whether or not paying employees to get Covid-19 vaccinations is a good policy for employers is debatable.”

Impacting The Bottomline

“On one hand, the country is facing an unprecedented public health crisis, and widespread vaccinations are the only way—short of literally millions of deaths in the U.S. alone—to alleviate the crisis,” Slater said. “Also, certain employers may only be able to operate profitably if they can assure customers that patronizing their business will not pose significant health risks, and publicizing vaccination of staff will be one effective way to make such assurances. 

“On the other hand,” he said, “employers have limited resources, and spending money to incentivize what at least most of their employees should be doing and what most of their employees almost certainly would be doing without an extra financial incentive may not be the wisest use of those resources. Employers do not typically pay employees to get vaccinations or otherwise protect against other serious diseases.”

Natalie Sanders, a labor and employment attorney with Brooks Pierce, advises employers on how to navigate the pandemic. She noted that, “Companies want their employees to get vaccinated in order to promote the health of their employees and their customers. [They] also have a financial interest in getting their employees vaccinated because the disruptions due to employee absences related to Covid are tremendous. So, of course, companies are looking at ways to incentivize their employees to get vaccinated.”

Upsetting Some Workers

Another downside, according to Ross at Test Prep Insight, is that a vaccine incentive plan, “… may upset certain segments of workers. With the politicalization of the vaccine, mask policies and the regulatory environment that has evolved around Covid, offering incentives for getting the vaccine may be seen as a political move by some employees.”

Avoiding Discrimination Allegations

Jonathan B. Orleans, chair of the employment and labor practice at the law firm Pullman & Comley, said, “... providing employees with a financial incentive to get the vaccine is a fine idea, provided that employers don’t leave themselves open to discrimination claims.”

“An employee who can’t be vaccinated due to a disability should probably be offered some alternative way to earn the reward,” Orleans noted. “Without such an alternative, the employer could be accused of disability discrimination. Similarly, an employee who refuses to be vaccinated based on a sincerely held religious belief should probably also be offered an alternative way to earn the reward, lest the employer be accused of religious discrimination.”

Other Risk Factors

The potential legal and other risks bring to mind the sardonic comment that, “No good deed goes unpunished.”

Sanders observed that,”The risks associated with creating incentives for employees depends on the type of incentives being considered.”

She said most employers are being conservative with regard to the incentives by focusing on the removal of barriers to employees. “For example, providing employees with two hours of pay to get the vaccination means the employees do not have to choose between vaccination and loss of pay or increased costs in childcare or travel expenses. This also may protect employers from wage violations where the vaccine may be given in circumstances or at times that federal or state regulators would view as time that should be compensable.”

Sanders cautioned that dealing with privacy and accommodation under the Americans with Disabilities Act are among the biggest risks facing employers in providing vaccination incentives. She said the issues include:

  • Who is gathering and maintaining the information about an employee who gets vaccinated in order to show they qualified for the payment? An employee’s vaccination information is medical information that would need to be kept confidential by an employer. 
  • How is the employer dealing with accommodation situations? For example, if an employee is not able to get the vaccination due to an underlying medical condition, will that employee feel that they should have received the payment the vaccinated employees received because the employee did not have the ability to get vaccinated?  

Proposed Federal Regulation

The U.S. Equal Employment Opportunity Commission (EEOC) is now considering a proposed regulation that employment and labor lawyer Mark Kluger said, “is legally relevant to the kinds of incentives that employers can offer.”

He noted,”Right now this is just a proposed regulation but it should be considered by employers [in the U.S.] before offering too much of an incentive for employees to get the vaccine. The rule making process takes months and while the regulation does not specifically address the vaccine, those of us who represent employers recognize its likely application.”


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