Are COVID-19 vaccine incentives the right fit for your company?

In December of 2020, the U.S. Equal Employment Opportunity Commission (EEOC) published guidance on employer mandatory COVID-19 vaccination policies. The guidance explained that with few exceptions, employers can require employees to receive the COVID-19 vaccine. Even though mandatory COVID-19 vaccines have been deemed permissible by the EEOC, employers remain hesitant.

As the vaccine becomes more readily available and millions of U.S. residents are being vaccinated on a weekly basis, employers looking for solutions to encourage their workforce may want to consider whether implementing an incentive program is right for them.

Many high-profile employers in retail and food services have announced their own incentive programs designed to encourage employees to get the vaccine.

Employers considering an incentive program have several options available. For example, employees can be offered paid leave to obtain the vaccine during work hours, or even vacation time. Employers also can provide cash incentives. But not so fast! There are considerations for employers when determining these programs.

For example, if an employer elects to provide a cash incentive, it should ensure that the payment is large enough to be effective, but not so large as to be viewed coercive. So, a $5 gift card to Starbucks will probably not hack it. Nor would a $1,000 cash bonus. The incentive amount varies depending on the industry, but most employers have provided between $75 and $100 to each employee.

It’s important to note that cash incentives may qualify as nondiscretionary bonuses under the Fair Labor Standards Act (FLSA) and state law, and would therefore need to be calculated into a nonexempt employee’s regular rate of pay when calculating overtime.

Employers also need to ensure their incentive does not run afoul of prohibitions under the Americans with Disabilities Act (ADA) against coercing employees to participate in wellness activities. Optional wellness programs are permitted, so employers should be sure to define their incentive program as voluntary.

Employers should be careful that vaccination incentives do not discriminate against employees who are medically or religiously exempt from receiving the vaccine. Under these circumstances, employers should consider alternatives such as regular COVID-19 testing or remote working.

As they say, “Don’t feel like the Lone Ranger!” To date, government agencies have provided little guidance regarding vaccine incentives. Employers should remain flexible and proceed with caution. It would be wise to seek the advice of counsel before implementing a policy. In all honesty and with today’s turbulent political climate, it will be difficult to overcome some employees’ distrust and suspicions about the COVID-19 vaccine.

Employers who decide against implementing an incentive program can still maintain a safe workplace by encouraging social distancing, remote working and good hygiene. Sharing current Centers for Disease Control and Prevention (CDC) information and providing resources regarding the availability of vaccines will also assist your employees during this difficult time.

The information and opinions expressed are for educational purposes only and are based on current practice, industry related knowledge and business expertise. The information provided shall not be construed as legal advice, express or implied.