On September 9, President Biden announced that the Occupational Safety and Health Administration (OSHA) will introduce a new COVID-19 vaccine mandate applicable to certain United States businesses. Under the OSHA’s emergency temporary standard (ETS), eligible employers must require their employees to be vaccinated or submit to weekly COVID-19 testing.
Biden’s announcement comes nine months after healthcare professionals administered the first COVID-19 vaccine in the U.S. and just weeks after the Food and Drug Administration (FDA) gave full approval to the Pfizer-BioNTech vaccine. It also follows a two-week period that saw the highest number of daily cases in the U.S. since the overall peak in January. According to recent research from the University of Oxford, the U.S. ranks last among Group of 7 (G7) nations in vaccination rates despite having purchased enough vaccine doses to vaccinate 300 million Americans.
The mandate will provide a shot in the arm to the U.S. vaccination campaign. President Biden says it will apply to 80 million workers—equal to the number of Americans who have yet to become vaccinated despite being eligible.
Who Does The OSHA COVID Vaccine Mandate Apply To?
The new OSHA rule applies to all U.S. companies with over 100 employees. The mandate will affect around 100,000 private-sector companies in the United States.
The new rule also applies to federal employees and government contractors—with a caveat. Whereas private-sector employers can give their employers the option of receiving the vaccine or undergoing weekly testing (more information below), companies and individuals who work with the government must be vaccinated.
“If you want to work with the federal government and do business with us, get vaccinated,” said President Biden. “If you want to do business with the federal government, vaccinate your workforce.”
President Biden also ordered vaccine mandates for healthcare workers. Facilities that receive Medicaid and Medicare funding must now require their workers to receive the vaccine, with no weekly testing option. This rule will apply to over 17 million healthcare professionals across more than 50,000 U.S. facilities.
What Does The OSHA COVID Vaccination Requirement Mean for Employers?
Many major companies already require that their workers be vaccinated. The OSHA mandate takes the pressure off of others weighing whether to implement their own mandate, effectively deciding for them.
Brett Coburn, an employment lawyer at Alston & Bird, says the mandate may come as a relief to employers that were undecided about implementing vaccine requirements. “Some employers I think may welcome it,” he said. “It kind of takes it out of their hands to some extent to say, ‘Sorry, OSHA said we have to do this and we have to follow what OSHA tells us.’”
Still, the OSHA rule leaves companies with at least one tricky decision: Will they require employees to be vaccinated or give employees the option of undergoing weekly testing? Employers that choose the latter path will have another question: who will pay for the cost of the weekly tests?
Under federal law, insurance providers must pay for COVID-19 tests that a healthcare provider orders. That rule does not apply to routine workplace tests, leaving it up to employers to decide whether they will pay for the tests or require their workers to do so.
Both options have drawbacks: companies risk alienating workers by requiring them to pay for their tests, while employers that pay for tests themselves take on more financial burden. Employers avoid this decision by removing the testing option and requiring employees to be vaccinated. While requiring vaccines will be off-putting to some talent, it will be a selling point to the 70% of employees who prefer their peers to be fully vaccinated before returning to the office.
When Does the Plan Take Effect?
As the OSHA is currently drafting the rule, it has not yet been formalized or officially implemented. Once the plan becomes official, private-sector workers will likely have between 50 and 90 days to comply. Because OSHA will introduce the plan as an ETS, it will be effective for a maximum of six months. At that time, the OSHA must make it a permanent standard or let it expire.
For government workers and healthcare professionals at eligible facilities, the mandate takes place immediately. Federal employees and contractors have 75 days to become vaccinated, placing the deadline around the end of November.
What Are The Financial Implications of the COVID-19 Vaccine Mandate?
Employers must plan for the costs related to the OSHA COVID vaccine plan. Companies that fail to test their workers or mandate vaccinations will face fines of up to $14,000 per violation.
Companies also must pay workers for any time off related to vaccinations, whether due to receiving shots or recovering from side effects. To offset these costs, employers can tap into federal tax credits.
Companies with fewer than 500 employees can receive up to $17,110 for each employee who takes paid leave due to COVID-19-related reasons such as recovering from the vaccine. Employers can also redeem tax credits of up to $5,110 per employee for time spent away from work awaiting COVID-19 test results, receiving a vaccine, or recovering from vaccine side effects.
Ensure Compliance With Market-Specific Expertise
Employers must stay on top of new developments as the OSHA continues drafting specifics of the rule. At the same time, companies must take time to understand how the new federal mandate fits in with state rules (Arizona, for example, has already announced a lawsuit against the Biden administration for imposing the mandate). Partnering with an employment expert like Velocity Global helps you ensure compliance with local and federal laws, no matter where you engage talent.
With expertise in all 50 U.S. states and over 185 countries worldwide, Velocity Global takes the guesswork out of your distributed workforce management. Whether you engage full-time employees, independent contractors, or any type of talent in between, we have the knowledge and solutions to provide a fully compliant and stress-free experience. Reach out today to find out how our experts can make life easier for your company.