On Sept. 9, 2021, President Biden announced a broad six-part strategy to combat COVID-19 at the federal level, including extensive new vaccination and testing requirements for large private employers, certain federal contractors and subcontractors, and healthcare organizations.
Links to Resources
Highlights for Employers
Warning that “[w]e’re in the tough stretch and it could last for a while,” President Biden said the first prong of his “Path Out of the Pandemic” focuses on “vaccinating the unvaccinated” — noting that “there are still nearly 80 million Americans eligible to be vaccinated who have not yet gotten their first shot.” Per the Biden administration plan, the president:
- Is directing the federal Department of Labor’s Occupational Safety and Health Administration (OSHA) to develop and issue an Emergency Temporary Standard (ETS) to “require all employers with 100 or more employees to ensure their workforce is fully vaccinated or require any workers who remain unvaccinated to produce a negative test result on at least a weekly basis before coming to work.”
- Businesses that do not comply will face fines up to $14,000 per offense, an administration official told The Associated Press. This appears to be a rounded reference to the OSHA maximum fine for serious citations, which is $13,653.
- Is directing OSHA to develop a rule through the new ETS “that will require employers with more than 100 employees to provide paid time off for the time it takes for workers to get vaccinated or to recover if they are under the weather post-vaccination.”
- Is expanding the prior Centers for Medicare & Medicaid Services (CMS) COVID-19 vaccination requirement announced for long-term care facilities to now “require COVID-19 vaccinations for workers in most healthcare settings that receive Medicare or Medicaid reimbursement, including but not limited to hospitals, dialysis facilities, ambulatory surgical settings, and home health agencies.”
- Per the White House, this action covers more than patient-facing employees alone and “will apply to nursing home staff as well as staff in hospitals and other CMS-regulated settings, including clinical staff, individuals providing services under arrangements, volunteers, and staff who are not involved in direct patient, resident, or client care.”
- CMS responded to the action plan, noting that it is developing emergency rules it will issue in October 2021. CMS’ release states that the rules will apply to “all providers and suppliers that participate in the Medicare and Medicaid program,” but also suggests this will be limited to certified facilities.
- Has issued an executive order (EO) that extends the new requirement that all federal executive branch workers be vaccinated “to employees of contractors that do business with the federal government.” However, notably, the new EO will not go into effect immediately and will apply only to certain federal contractors and subcontractors. Specifically, the EO requirements:
- Will be implemented through insertion of contractual clauses in any covered “new contract; 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” for applicable federal contractors and subcontractors “at any tier,” with “initial steps” to be taken by the Federal Acquisition Regulatory Council and applicable agencies by Oct. 8, 2021.
- Will apply to such contracts and contract-like instruments only if:
- “it is a procurement contract or contract-like instrument for services, construction, or a leasehold interest in real property;
- it is a contract or contract-like instrument for services covered by the Service Contract Act, 41 U.S.C. 6701 et seq.;
- it is a contract or contract-like instrument for concessions, including any concessions contract excluded by Department of Labor regulations at 29 C.F.R. 4.133(b); or
- it is a contract or contract-like instrument entered into with the Federal Government in connection with Federal property or lands and related to offering services for Federal employees, their dependents or the general public.”
- Will apply only “to any workplace locations (as specified by the Task Force Guidance) in which an individual is working on or in connection with a [covered, applicable] Federal Government contract or contract-like instrument.”
- Will not apply to all federal contractors and subcontractors who are otherwise subject to Executive Order 11246 (i.e., the executive order that deals with affirmative action). Instead, the new vaccination EO is largely limited to certain contracts for services, including services provided at or in connection with federal property or land, leased real estate, construction or concessions. Or, put another way, most “supply” contracts providing “goods” to the federal government (and similar subcontracts to federal prime contractors) are not covered by the vaccination EO.
Initial Open Issues
Naturally, with the supporting OSHA ETS, CMS provisions and federal contract clauses yet to be issued, there are a number of open issues.
- Will employers be reimbursed for the cost of required COVID-19 vaccinations and/or testing (e.g., similar to the tax credit pass-through mechanism adopted under the Families First Coronavirus Response Act (FFCRA))?
- Will employers be reimbursed for the cost of any added “hours worked” and overtime pay obligations imposed for time that non-exempt employees spend getting vaccinated or tested for COVID-19?
- What specific scientific evidence supports OSHA’s establishment of expanded ETS protocols (i.e., similar to the evidence cited in support of OSHA’s earlier ETS adopted to protect healthcare and healthcare support service workers from occupational exposure to COVID-19)?
- Does OSHA have authority under its ETS protocol to require employee paid time off on a private employer’s nickel?
- Does the EO meet the basic implementing standard required under the Federal Property and Administrative Services Act, 40 U.S.C. 101 et seq., that the new requirements promote “economy” and “efficiency” in procurement?
- Will liability protections for employers under state workers’ compensation law or the federal Public Readiness and Emergency Preparedness Act (PREP Act) apply?
- Will there be liability protections for employers who are forced to terminate employees for failure to comply with the federal vaccination or testing requirements?
- How will potential disability and religious accommodations under the Americans With Disabilities Act (ADA) and Title VII of the Civil Rights Act of 1964 (Title VII) apply and be implemented?
- Will CMS extend the staff vaccine requirement to all participating Medicare and Medicaid providers and suppliers including small physician offices, or limit it to certified facilities?
- Will the new requirements survive injunctive and other challenges based on arguments that the obligations are outside the mandate of OSHA or an unlawful stretch of the U.S. Constitution’s interstate commerce clause?
Likely, time, regulations and litigation will tell. And McGuireWoods will be closely monitoring these developments and issuing further guidance over the coming weeks.