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Big Companies Mandating the COVID Vaccine: What Can We Learn?

By Roy Rasmussen Reviewed By Mike Lucas
By Roy Rasmussen
By Roy Rasmussen Reviewed By Mike Lucas

With more large companies mandating COVID vaccine policies, what are the implications for small businesses?

We’ve gathered a few case studies to review. We also will provide some legal and policy background on the issue of employers requiring COVID vaccines for workers. In addition, we’ll look at the vaccine policies of some of the largest U.S. companies. Also, we’ll consider companies with different policies to illustrate some different scenarios businesses may encounter and what this means for small businesses.

Background: FDA Vaccine Approvals and the Path Out of the Pandemic Plan

Since COVID-19 vaccine shots began rolling out in December 2020, workers and business owners alike have been faced with the question, “Can an employer force you to get a vaccination?” 

Initially, one of the legal issues this raised was that COVID vaccines hadn’t yet been approved by the Food and Drug Administration (FDA), a process that normally takes years. In the absence of FDA approval, the applicable legal framework fell under Emergency Use Authorization (EUA) provisions of the Federal Food, Drug and Cosmetic (FD&C) Act, which are designed for exceptional situations requiring rapid responses. 

EUA provisions don’t allow for mandatory vaccines for unapproved products, placing the question of employer-mandated vaccines in legal limbo.

FDA Grants Vaccine Approval

To circumvent this issue, the FDA expedited its approval process, announcing on Aug. 23, 2021, that it had granted its first COVID-19 vaccine approval to a Pfizer-BioNTech COVID-19 vaccine to be manufactured and marketed under the name Comirnaty. The approval was extended to individuals 16 years and older, with EUA approval for those 12 to 15 and for third doses in certain immunocompromised individuals. 

At that time, the FDA updated EUA approval guidelines for existing doses of Pfizer-BioNTech COVID-19 vaccines that had already been manufactured using the same formulation as Comirnaty but are legally distinct.

On the heels of this, on Sept. 9, 2021, the White House announced a 6-pronged Path Out of the Pandemic plan that included vaccine mandates for federal workers, federal contractors, employees at health-care facilities participating in Medicare and Medicaid and private employers with 100 or more employees. 

Additionally, the White House announced that the Occupational Safety and Health Administration (OSHA) was developing an Emergency Temporary Standard (ETS) requiring employers to provide paid time off for employees to get vaccinated.

An airline employee wearing a mask gets a vaccination shot from a masked medical professional.

Mandates Requiring Vaccine for Work for Businesses With 100 or More Employees

While the legal dust stirred up by the debate over these policies will continue to swirl for some time, a couple of matters command particular interest for small businesses. 

First, companies with 100 or more employees must deal with OSHA’s rule that calls for affected employers either to:

  • Ensure all workers are fully vaccinated
  • Require unvaccinated workers to provide negative COVID test results on at least a weekly basis before returning to work

Otherwise, these companies face OSHA fines for noncompliance.

This will have the biggest impact on large companies. However, it won’t apply to most businesses, as 98.1% of U.S. companies have fewer than 100 employees, according to Census Bureau data summarized by the Small Business & Entrepreneurship Council, a nonprofit advocating for small businesses.

Employers in some states may find themselves caught in a crossfire between federal and state government policies drawn along partisan lines. Lawyers and politicians are wondering aloud, “Can employers mandate COVID vaccine policies?” 

For example, Montana and North Dakota have placed legal bans on vaccine mandates for private employees. As legal challenges head to the courts, employers will find themselves facing a fluid situation subject to rapid change. Updates on state vaccine mandate bills and bans are provided by the National Academy for State Health Policy, a nonpartisan forum for policymakers in state governments.

Paid Time Off for Vaccinations

Employers with 100 or more employees will be affected by OSHA’s ETS requiring paid time off for employees to receive vaccinations. The provision will apply both to the time required for the vaccination itself as well as time to recover from the effects of being vaccinated.

To promote vaccinations, the Internal Revenue Service (IRS) previously announced tax credits to reimburse small and midsize employers and certain government employers who provide paid time off for vaccinations. This applies to any business with fewer than 500 employees, including nonprofits, so even some companies that aren’t subject to the vaccine mandate for size reasons may be eligible for these tax credits.

With this general background in mind, let’s look at some case studies from individual employers with vaccine policies.

Walmart: Balancing General Vaccine Policies With Exceptions

Walmart is the largest U.S. corporate employer. Unlike many large companies, Walmart isn’t unionized. The retailer doesn’t have to negotiate its vaccination policies.

On July 30, 2020, Walmart said it would be requiring vaccinations by Oct. 4 for all associates in its home office headquarters, as well as all market, regional and divisional associates who work in multiple facilities, except those with approved exemptions. Because this doesn’t apply to the majority of associates at local Walmart stores, to promote vaccinations among other employees, the company offers free vaccinations at its locations for all associates, with financial incentives for associates who get vaccinated.

Walmart offers 2 hours of paid time off for receiving vaccinations. The company also provides up to 3 days of paid time off for recovering from vaccinations. Walmart’s announced vaccination policy includes a recognition that some employees can’t get vaccinated for medical reasons or religious reasons.

Key Takeaways

Walmart’s vaccination policy includes several elements which represent best practices smaller companies can emulate:

  • A general policy for employees at the company’s largest facilities, where there are more staff and risk of exposure
  • Guidelines for employees who travel between facilities
  • An adaptation of the general policy for employees at branch locations where risk levels may vary
  • Policies making it easy for employees who wish to get vaccinated to do so without missing work or pay
  • Positive incentives for employees who decide to get vaccinated voluntarily
  • Accommodations for employees who have medical or religious reasons for vaccination exemptions, a provision which helps Walmart stay compliant with Equal Employment Opportunity laws prohibiting discrimination based on criteria such as medical disabilities or religious beliefs

While Walmart is an exceptionally large employer, these general principles provide a useful template for employers of any size. However, you should make adjustments to your own individual situation. Be sure to do so with input from a labor attorney in regards to state and local regulations.

Disney: Negotiating Vaccines With Unions and Government Authorities

The case of Walt Disney represents a more complicated situation. The entertainment company had to contend with union pressure and conflicts between federal and state authorities. 

On July 30, concurrent with Walmart’s implementation of its vaccination policy, Disney announced it would be requiring vaccinations for all on-site salaried and non-union employees in the U.S. Disney gave employees who were already working on-site 60 days to complete their protocols. For employees working from home and new hires, they would need to provide proof of vaccination before beginning on-site work.

Initially, this didn’t extend to union workers. However, Disney was already negotiating with a union coalition. By the time the FDA approved the Comirnaty vaccine on Aug. 23, the company and union leaders had reached a deal. Under the agreement, union workers had until Oct. 22 to provide proof of vaccination to remain employed. That said, employees could request exemptions for medical or religious reasons.

While this brought Disney’s policy into accord with union leaders, a further complication has arisen from government regulations. 

In Florida, a Vaccine Passport Ban

In May, Florida legislators banned requirements for vaccine passports, an issue of concern to Florida’s tourism industry, which includes Disney’s Walt Disney World operation and related cruise operations. Disney’s policy brought the company into conflict with the policy of Florida’s state government, which has threatened fines for city governments that enforce vaccine mandates. The issue remains to be resolved in the courts.

Disney’s case illustrates the complexity that enters into the picture when unions and government authorities become involved. Small businesses can take away a couple lessons. 

One is to always factor in applicable union agreements before implementing any vaccination policy. Another is to work with all relevant government agencies to the extent possible to minimize friction. When different government agencies come into conflict, be prepared to negotiate in a difficult position. This underscores the value of consulting an attorney before deciding on a policy.

A syringe labeled “COVID-19 vaccination” is surrounded by question marks.

Cisco: Handling Vaccines in the Hybrid Workplace

Technology provider Cisco uses a hybrid workplace model which combines on-site workers with a significant number of remote workers, and their vaccination policy reflects this. Even before the pandemic, Cisco took a hybrid-first approach to the workplace, with only a third of its employees in the office full-time. 

In the wake of the pandemic, Cisco is refining its hybrid work model to promote even greater flexibility on how many days workers are in or out of the office. Every worker will be considered a hybrid worker. Some will work from home 5 days a week with only occasional office visits.

Consistent with this flexibility, Cisco takes a hybrid approach to vaccination policy. Critical on-site workers must follow COVID-19 protocols similar to those found in other large corporations. This includes those involving vaccination status, a Cisco representative noted in a statement to Raleigh, N.C., news site WRAL TechWire. However, Cisco only extends this policy to on-site employees. This leaves remote workers free to make their own decisions about vaccinations.

Cisco’s approach illustrates the flexibility that a hybrid work model offers for employers. It underscores how companies with a remote workforce have more options with a vaccination policy. That’s because there is a social distancing factor built into remote work.

Develop the Right Vaccination Policy for Your Workplace

These cases studies illustrate different scenarios large and small businesses face when it comes to vaccination policies. 

Walmart’s case exemplifies some general issues applicable to a nonunionized workforce. Disney provides an example of some complications that may arise when unions and government agencies are factored in. Cisco underscores the flexibility that a hybrid workspace allows. 

Indeed, different companies face different sets of issues. There’s no one-size-fits-all approach that applies across the board. Develop a vaccination policy that fits your situation and needs in consultation with your company’s legal adviser.

Roy Rasmussen Contributing Writer for Fast Capital 360
Roy is a respected, published author on topics including business coaching, small business management and business automation as well as an expert business plan writer and strategist.
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