Category Archives: Regulatory Risk

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What Employers Need to Know About Federal COVID-19 Vaccine Mandates

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In an effort to combat the COVID-19 virus and its subsequent variants, the Biden administration has instituted three important mandates that employers should be aware of as they may impact their business. First, the Emergency Temporary Standard (ETS), issued by the Occupational Health and Safety Administration (OSHA), requires that all employers with 100+ employees mandate vaccination or weekly testing. The second mandate involves federal workers and contractors and requires them to obtain a vaccination without any option for weekly testing. The final mandate was issued by the Centers for Medicare and Medicaid Services (CMS), and requires vaccination of all healthcare workers at CMS-covered facilities.

OSHA’s Emergency Temporary Standard

The mandate that has the most wide-ranging impact is Occupational Health and Safety Administration’s (OSHA) Emergency Temporary Standard (ETS) that calls for employers with 100 or more employees to either require employees to obtain a COVID-19 vaccination or to prove compliance with a weekly-testing program. This ETS is expected to affect over 80 million employees. 

On December 17, the Sixth Circuit Court of Appeals lifted the stay placed on OSHA’s ETS issued by the Fifth Circuit in November. The court held that OSHA does have statutory authority to mandate national vaccines and/or testing for employers with more than 100 employees. Specifically, it outlined that because COVID-19 is a virus that causes bodily harm, OSHA was well within its administrative authority to regulate the health and safety of employees. 

Since the Sixth Circuit’s decision to dissolve the stay, OSHA announced that it will not be issuing citations for noncompliance with the ETS requirements until January 10 and the testing requirements will not be enforced until February 9 with the caveat that the employer must make good faith efforts to come into compliance as soon as possible.

After this ruling by the Sixth Circuit, eight groups challenged the OSHA vaccine mandate and filed emergency applications with the U.S. Supreme Court asking it to stay the mandate again until the case can be heard in the highest court. On December 20, the Supreme Court requested a response from the federal government by December 30. And, on December 22, in an almost unprecedented move, the Supreme Court ordered oral argument on these emergency applications, which will take place on January 7.

Despite the fact that the validity of the ETS is now squarely before the Supreme Court, employers should still operate as if the ETS will go into immediate effect. OSHA has implemented new deadlines to reflect the current status of the ETS.

By January 10, employers should:

  • Track employee vaccination status
  • Create a database detailing vaccination information for each employee
  • Require unvaccinated employees to wear a mask
  • Provide paid time off for employees to get vaccinated and recover

As of February 9, 2022, employers must also require unvaccinated employees must start testing for COVID weekly. Self-administered or self-read tests would not comply. Employers must observe or use a proctor and have employees tested on site, or at a recognized testing facility.

The Mandate for Federal Employees and Contractors

The second mandate stems from President Biden’s executive order that requires most federal employees or contractors to get vaccinated. This mandate does not have a testing option.

On December 7, the U.S. District Court for the Southern Section of Georgia granted a preliminary injunction to temporarily halt the enforcement of the Biden’s administration’s vaccine mandate for federal contractors.The court found that the administration had overstepped the bounds of it authority under the Federal Property and Administrative Services Act 40 U.S.C. 101 et. seq. The injunction effectively prohibits enforcement of the federal contractor vaccine mandate in all 50 states and any territory of the United States. However, on December 17, the Eleventh Circuit, denied the government’s motion to stay. This effectively upheld the injunction. The court found that the government had failed to show that it “would be irreparably harmed absent a stay.”

The CMS Mandate

The third mandate is an interim file rule of the Centers for Medicare and Medicaid Services (CMS), which requires vaccination of all healthcare workers at CMS-covered facilities throughout the United States. The CMS mandate is currently enjoined by court order in 25 states and continues in full effect in 25 other states. After the ruling by the Fifth Circuit in November, however, CMS suspended implementation and enforcement of the mandate pending resolution of the challenges before the Supreme Court.

Court Overturns Prop 22, California’s Gig Worker Classification Law

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On August 25, the Alameda County Superior Court in California declared that Proposition 22 (better known as Prop 22) violated the state’s constitution, overturning it and potentially putting a portion of the state’s gig work industry in peril. The controversial California ballot measure designated app-based gig workers like rideshare and food delivery drivers as independent contractors, meaning that the companies they ostensibly work for would not have to provide a minimum wage, health insurance, unemployment, sick leave or other benefits. Because the initiative was a ballot measure, the court found the law restricted the state legislature’s ability to regulate compensation rules, and said the measure also illegally prevented workers from collective bargaining and unionization. However, this ruling does not mean that gig workers will automatically be considered employees, as no previous law mandated that classification.

Before Prop 22’s passage in November 2020, California passed AB 5 in May 2019, which instituted a more rigorous test to determine whether workers were employees or independent contractors: if “the person is free from the control and direction of the hiring entity in connection with the performance of the work,” the work was outside the company’s usual business, and if the worker “customarily engaged in an independently established trade, occupation or business of the same nature as that involved in the work performed.”

Rideshare companies like Uber and Lyft essentially ignored AB 5 and poured $224 million into fighting for Prop 22, making it “the most expensive ballot measure in California history,” according to the Los Angeles Times. The measure passed with around 59% of the vote.

In a small concession for workers, Prop 22 did provide for a health insurance stipend, but an August 2021 UC Berkeley Labor Center survey of 500 drivers showed that only around 10% of workers were receiving it, and 40% had not heard about it at all. Since work hours are only defined by the time spent driving with a passenger, others do not work the required 15 hours per week on one app to qualify for the stipend. These and other factors prompted drivers and the Service Employees International Union (SEIU) to sue the state seeking to overturn the law.

For now, the Superior Court ruling will likely not change much for gig workers in California, as Uber and other companies have announced their intention to challenge it in higher courts and may ignore any of its other legal implications, leaving everyone involved with a shaky status quo: an overturned law that is effectively still being followed.

As Risk Management wrote in May, one danger of the continuing ambiguity surrounding gig worker classification is misclassifying workers, which can lead to heavy fines or lawsuits. For example, in January 2020, D.C.-based contractor Power Design Inc. agreed to pay $2.5 million for misclassifying 500 workers as independent contractors rather than employees. In August, food delivery app company Postmates settled with the city of Seattle for nearly $1 million for violating the city’s Gig Worker Paid Sick and Safe Time (PSST) ordinance. The payment will go to cover city fines and compensate more than 1,600 workers for back wages. Additionally, withholding benefits, overtime, and meal and rest breaks (whether a result of misclassification, or in general) can result in workers filing class action lawsuits against the company, potentially resulting in significant costs, impacting productivity and damaging the organization’s reputation.

Another risk for gig work companies is insufficient safety measures for workers. Unlike with formal employees, companies often do not provide gig workers with safety training and may not offer formal ways to report safety concerns. This creates an environment where workers who are often under pressure to complete as many rides or tasks as quickly as possible may get into accidents or leave dangers unreported, creating liabilities for themselves and the company.

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Other states have their own gig work regulations either on the books or in the works and President Joe Biden has expressed support for gig worker classification as employees, but there is currently no national legislation on this issue. However, in March, the House of Representatives passed the Protect the Right to Organize Act (or PRO Act), which would reclassify gig workers as employees, affording them all the benefits included in that status.

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The Senate has not yet taken up the measure.

New York City’s New Biometric Information Law Governs Collection and Use of Consumer Health Data

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For risk professionals, the COVID-19 pandemic has increased the importance of ensuring customer and employee safety measures are incorporated into operations, processes and future strategies. As many businesses reopen from pandemic shutdowns or return from remote work arrangements, some enterprises are now exploring both the effectiveness and the risks associated with conducting health screenings that collect biometric information and other personal health data.

This month, New York City released the Biometric Information Law, a new measure that goes into effect on July 9 and imposes disclosure requirements on businesses that collect consumer biometric information.

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It also sets parameters on what they can do with that information, most importantly, prohibiting the exchange of biometric information for anything of value.

As detailed in recent client notice from the law firm Reed Smith, highlights from the law include:

  • The measure requires a business that “collects, retains, converts, stores or shares biometric identifier information of customers” to place a “clear and conspicuous sign” near all consumer entrances that, in plain language, discloses the collection, retention or sharing of biometric information.
  • It stipulates that it is unlawful to “sell, lease, trade, share in exchange for anything of value or otherwise profit from the transaction of biometric identifier information.”
  • It establishes “an ‘aggrieved’ consumer’s private right of action,” meaning that “[a]ny person who is aggrieved by a violation by this chapter is entitled to commence an action to enforce its protections.”

There are key exclusions, however, as “governmental agencies, employers, or agents” are expressly excluded from compliance with any provision.

New York is not the only state to enact a law attempting to govern how organizations can use biometric information. Arkansas, California, Illinois, Texas and Washington have also set guidelines for businesses.

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Indeed, the recent Risk Management Magazine article “Preparing for Biometric Litigation from COVID-19” addresses the imminent and critical questions businesses must answer when collecting and handling such data.

Sensitivities surrounding the confidentiality of biometric and other health information are not new in certain industries, such as healthcare. Further, even before COVID-19, risk professionals were already grappling with the risks associated with new biometric technologies and the data collected, especially with regard to facial recognition, wearables and even the rise in popularity of telehealth.

Now, with every organization on high alert about infectious diseases and how quickly they can interrupt business, health and safety have become top priorities for every risk professional in every sector.

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As risk professionals look to new technology for help with these concerns, monitoring the emerging regulation and security risks around health and biometric technology will become increasingly critical in balancing benefit and risk to their organizations.
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Data security will continue to remain a significant threat, but New York’s Biometric Information Law should serve as a reminder that what the organization does with that data can also have a lasting impact on the enterprise’s reputation and consumer trust.

For more information to help risk professionals manage new health technology and data, check out these articles from Risk Management Magazine:

COVID-19 Vaccines: Should You Mandate, Motivate or Educate Employees?

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For the past year, employers have grappled with unprecedented workplace safety and human resources challenges, forced to address safety measures that were unfamiliar for many industries. Employees have become accustomed to daily health screening and masks, and human resources has added COVID safety training and enforcement to its job duties. As vaccines are becoming more prevalent, employers have to now decide whether they should vaccinate their workforces. Making this decision can seem daunting and the applicable employment laws can seem overwhelming. However, there are some baseline considerations that may help.

As a threshold matter, employers are obligated under the OSHA General Duty Clause to provide a safe working environment to their employees. At the direction of President Joe Biden, OSHA released new comprehensive guidance regarding COVID workplace safety, including a 16-point list of essential components of a workplace safety program. OSHA recommended that employers make the vaccine available to eligible employees at no cost, and made clear that employers must continue to enforce COVID safety protocols regardless of an employee’s vaccination status “because at this time, there is not evidence that COVID-19 vaccines prevent transmission of the virus from person-to-person.”

Employers now must determine whether they will mandate, motivate, or educate employees to receive the vaccine. They will first have to determine whether the vaccine will provide a safer working environment. While it seems clear that the vaccine will minimize or eliminate the vaccinated individual’s COVID symptoms, it remains unclear whether a vaccinated worker may spread the virus to others. Therefore, a vaccinated workforce may still be a contagious one.   

Businesses that serve in-person customers may benefit from mandating the vaccine. A local restaurant or retailer may be able to advertise that its staff is vaccinated encouraging patrons to return. While a mandatory vaccine program may be complex, the benefit of returning customers may outweigh the pain of a program. Conversely, in an organization where most employees have remained remote and business has continued at normal levels, the complexity of a mandatory program may not be worth it. In the latter scenario, it may be better to implement a voluntary program, which is easier to administer and has less compliance complexity. Employers will have to weigh the return on investment for each approach.

Employers will also have to determine their appetite for risk. Many initially lean toward a mandatory vaccine approach in an effort to protect employees from becoming seriously ill. However, even mandatory programs pose liability risks for employers. Essentially, there are two schools of thought regarding mandatory vaccine programs:

  1. A vaccinated workforce is essential to safety. A vaccinated workforce will reduce community spread and bring the workforce closer to herd immunity. The fewer employees that become symptomatic or sick, the sooner we may reduce COVID-19’s spread. Likewise, it would be negligent, or a violation of the employer’s General Duty obligations, to not mandate eligible employees to receive the vaccine.
  2. The vaccine is too new to mandate. On the other hand, some believe that it would be negligent, or a violation of an employer’s General Duty to require employees to receive the vaccine, noting that the vaccine is merely under emergency authorization. Consequently, mandating that eligible employees receive the vaccine would create employer liability for any possible harm the vaccine could cause to employees.  

It is also important to note that mandatory programs will likely trigger workers compensation coverage for any medical services and/or lost time associated with employee reactions to the vaccine. Workers compensation coverage is not always a bad thing. Employers should remember that the workers compensation exclusive remedy provision protects employers from negligence and tort claims (but not gross negligence). 

Employers should also consider the practical and operational complexities associated with a vaccination program. Employers who implement a mandatory program must be prepared to enforce the rules. They may be faced with difficult decisions regarding candidates and eligible employees who refuse to receive the vaccine (without any legal protections). Can the employer continue to recruit and retain talent under a mandatory program?

Regardless of where an employer lands on the vaccine program spectrum, they must take their employee complaints and concerns seriously. Likewise, employers must not take adverse action against a complaining employee. Employee OSHA whistleblower cases have reached unprecedented numbers. As of February 5, there have been 4,738 COVID OSHA whistleblower complaints filed in the previous 12-months. Before 2020 (and COVID-19), the largest number of complaints received by OSHA in a 12-month period was 3,355 in 2016.

The good news, if there is any, is that employers that provide safe working environments, are open to employee concerns, and communicate with workers are already taking positive and proactive steps to avoiding liability and litigation. The following best practices may be helpful: 

  • Review your COVID safety program to ensure it comports with OSHA’s 16-point COVID prevention program guidance, and continue to review and update as guidance and regulations change.
  • Provide managers and employees regular safety training, and provide managers with training to enforce safety programs, hold employees accountable, and document all safety incidents and violations.
  • Stay up to date with regulations. OSHA has updated emergency temporary standards, and local and state laws continue to change rapidly.
  • Update anti-retaliation policies to include COVID safety protocols. Also consider a whistleblower hotline and ensure that managers are trained and understand how to take seriously and address employee concerns and complaints.
  • Be sure your workforce has the most current information regarding COVID-19, its symptoms and transmission, and the vaccine. Also be sure to provide all communication in multiple languages for a multilingual workforce.

Ultimately, COVID workplace safety is at the core of any employer’s operations. Whether an employer mandates, motivates or educates its employees to receive the vaccine, they must continue to evolve and enforce their COVID safety protocols.