President Biden announced new strategies yesterday to combat COVID-19. The President’s plan includes requiring that federal contractors mandate that their employees be vaccinated against COVID-19 and that all private companies with 100 or more employees either mandate vaccination or ensure that unvaccinated employees are tested for COVID-19 at least weekly. Neither of these requirements have yet to take effect, and it is anticipated that they will be met with legal challenges when implemented.
President Biden announced a forthcoming Emergency Temporary Standard (“ETS”) from OSHA that will purportedly mandate that private businesses with 100 or more employees require their workforces to become fully vaccinated or test negative for the coronavirus at least once per week. The ETS is also expected to mandate paid leave to enable employees to get vaccinated. OSHA is expected to issue this ETS in the coming weeks. Many important details remain unknown until the ETS is issued, including timelines for compliance and whether any testing permitted by the employer in lieu of vaccination must be provided by the employer on company time.
President Biden also issued an Executive Order on September 9 which may deeply impact companies doing business with federal agencies. While the Executive Order speaks of contracting with parties that provide “adequate COVID-19 safeguards for their workforce,” it is anticipated that such safeguards will include a directive that all employees of federal contractors and subcontractors be vaccinated against COVID-19. The Executive Order provides for the inclusion of a clause in all federal contracts and “contract-like instruments” – including subcontracts at all tiers – that will specify that the contractor or subcontractor must comply with yet-to-be issued guidance from the Safer Federal Workforce Task Force. The President tasked the Safer Federal Workforce Task Force to issue relevant contractual terms for contractors, as well any applicable exceptions, by September 24, 2021.
The soon-to-be mandatory clause containing that guidance will apply to any new contract or contract-like instruments entered, extended, renewed, or options exercised on or after October 15, 2021. It may also apply to existing contracts, making compliance particularly problematic if there is vaccine hesitancy among an employer’s workforce. The clause will apply to transactions with the federal government involving the following:
- real property leasehold interests
- businesses offering services for federal employees, their dependents, or the general public in connection with federal property or lands.
Businesses providing any of these services or engaging in these transactions with any federal agency should be prepared to comply with the Task Force’s guidance. Similarly, even companies who may not be subject to the OSHA ETS or have direct federal contracts should also be mindful of these developments if they are doing business with an entity that is receiving federal funds. Many of these entities, such as healthcare organizations, have already imposed this mandate on their contractors and subcontractors performing work at their facilities. With the issuance of this Executive Order and OSHA’s forthcoming emergency rule, the trend toward companies being mandated by contract to require employee vaccinations could continue to grow.
McNees will continue to monitor these developments, including any ETS issued by OSHA, as well as updates on litigation seeking to block or challenge these requirements. Until then, we recommend that businesses begin to develop strategies to respond to these mandates.