As we advised last week, on September 9, 2021, President Biden issued a new COVID-19 Action Plan that directs federal OSHA to issue a new Emergency Temporary Standard requiring all businesses with 100 or more employees to ensure their workers are either vaccinated or tested once a week.  In response to this Action Plan, we are getting a number of questions from clients relating to various employment-related issues, including a variety of wage and hour issues.  Given that it is a safe assumption that many of you either already have, or will have, similar questions, we thought it would be beneficial to set forth some of the common questions we have received below:

Question 1.  For employees who claim that they cannot receive the vaccine due to religious or medical reasons and thus will need to receive weekly COVID-19 testing, who will be required to pay for that testing? 

Answer:  Biden’s announcement and Action Plan do not say whether it is the employer or employee who is responsible to pay for testing. Thus, we cannot answer this question with absolute certainty.  Nevertheless, there are subtle signals in the language of the Action Plan that appears to indicate the Administration’s intentions to place the cost burden on the employees:

(1) Clues in the Language of Biden’s Action Plan.  The Action Plan states that unvaccinated workers need to “produce a negative test result on at least a weekly basis before coming to work.”  The other requirements discussed in the Action Plan consistently state an affirmative duty by employers; e.g., “to provide paid time off,” but with regard to testing, the Plan talks about an employee’s action of producing a negative test result.  The Action Plan could just as easily have mandated that employers “conduct testing,” “ensure testing,” “provide testing,” or contained any other language indicating this is the employer’s affirmative duty as opposed to a duty of the voluntary unvaccinated worker.  By way of example, Cal/OSHA’s COVID-19 ETS includes a provision requiring employers to pay for COVID-19 testing under certain circumstances, and the regulation specifically states that “employers shall make COVID-19 testing available” at no cost.  Thus, if the White House was set on having employers pay for the cost of COVID-19 testing, we would have expected more explicit language saying so.

(2) Biden’s Tone –Anti-Unvaccinated.  We could also sense in President Biden’s tone that he was somewhat fed up with non-vaccinated individuals.  He stated in his speech that:

There’s pretty direct blame cast at unvaccinated individuals, so it would follow that the intent is to apply a little pain to their decision to remain unvaccinated.  It would also seem to undermine the purpose of this rule – to get more people vaccinated – to provide employees who have been unwilling to get vaccinated such an easy off-ramp from getting vaccinated now; i.e., I still don’t want to get vaccinated and my alternative is a testing program that costs me nothing, and in fact gets paid for my time spent doing something other than working.

(3) The relatively low cost of testing and the ease of accessibility. Another reason to think it is the Administration’s intent that employees pay for their own testing is that Biden’s Action Plan talks a lot about the White House’s initiatives to make testing cheaper and more accessible to everyone.  For example, to make testing more accessible, President Biden announced that certain retailers will start selling at-home rapid tests for no profit for the next three months, resulting in a 35% price cut by the end of the week.  The strongest argument against making employees pay for the testing is the cost is too great for an individual vs. a company, but these measures ameliorate some of that concern.

(4)Incentivizing Employers to Voluntarily Implement “Hard” Vaccine Mandates. Another reason OSHA may put the cost of testing on employers’ shoulders is the possibility that many employers will just not provide the testing option if the employer has to pay for it.  Just because the ETS will allow for both a vaccine AND testing option does not mean employers have to provide both.  EEOC, OSHA, and the Dept. of Justice, as well as multiple federal courts, have already expressed that employers may lawfully implement hard vaccine mandates in the context of this pandemic.  The Biden Administration likely felt it did not have legal authority to set such a hard line for private employers, but that is clearly its preference.  So, asking employers to pay for the weekly testing could be a strategic way to get that result.

(5) But Beware of the Influence of Unions. On the other side of that scale, as OSHA crafts the ETS, the Department of Labor may face pressure from its most sacred constituency – national unions – to not force employees to bear any cost (or consequence) from refusing to be vaccinated.  It certainly aligns with OSHA’s natural instinct to not place a personal burden on workers.  Ultimately, however, we think the ETS will address the costs of compliance in line with the incentives the ETS is trying to create.  That is, employers bear the cost for the outcomes desired by the Administration – getting employees vaccinated – but employees have to pay for testing, which is an offshoot of the behavior the Administration is trying to discourage – refusing to get vaccinated.  Essentially, the employee will be left with two choices – get paid time off to get vaccinated (and recover from any adverse side effects), or pay for weekly testing.

Ultimately, while we think the ETS should address the costs of compliance in line with the incentives the ETS is trying to create (i.e., employers bear the cost for the outcomes desired by the Administration – getting employees vaccinated – but employees pay for testing when they refuse to get vaccinated), but it is hard to envision this Dept. of Labor, made up of officials with very deep, personal roots in organized labor, putting a costly burden on workers.  Without serious advocacy by industry, our best guess is OSHA will place the cost burden on employers.

Question 2.  If employees have to pay for testing, should the time spent getting the test be compensable?

Answer: As a rule of thumb, testing protocols must comply with applicable wage and hour laws, which provide that time spent on receiving employer-required tests should almost always be treated as compensable. Indeed, federal regulations state that time spent by employees waiting for and receiving medical attention on the premises or at the direction of the employer during their normal working hours on days when they are working constitutes hours worked and thus are compensable.  Here, however, the tests are not being required by the employer but rather are a result of a government mandate.  In that context, the Ninth Circuit recently affirmed the dismissal of a wage & hour lawsuit that alleged that an employee was not paid for time spent waiting in the TSA security line.  The court held, in part, that since the security screening is mandated by federal law, the company exercised no control over the employee during the screening process and thereby was not responsible for paying the employee for that time.  That rationale appears to be directly applicable to government mandated COVID testing/vaccinations, as it is the government, and not the employer, that is exerting control over the employee’s testing/vaccination process.  Thus, at this point we do not believe that the Action Plan requires employers to pay employees for the time they spend getting tested.

It is important to keep in mind, however, the federal Fair Labor Standards Act (“FLSA”) requires that an employee be paid at least the applicable state or federal minimum wage for all hours worked during each workweek.  And, if an employee’s weekly testing reduces his/her pay to an amount that is below the minimum wage, he/she may not be receiving at least the state or federal minimum wage for all hours worked.  Given the minimal amount of time it takes to receive a weekly test, we do not believe it is likely that an employee’s weekly wages would fall below the applicable minimum wage.  In the unlikely event that scenario does occur, however, it would be prudent for employers to ensure that their employees receive at least an amount equal to their minimum wage for all hours worked during that workweek. 

Question 3.  What should an employer do if an employee cannot provide test results in a given week because of lack of availability or significant lag-time due to large volume of testing?

Answer:  Although technically in this scenario the employer would be within its rights to terminate an employee due to their failure to get tested, we would not recommend terminating the employment of an individual who has not produced a negative test due to no fault of their own, such as a lack of availability or lag due to a large volume of testing.  Instead, an unpaid leave of absence until they can get tested (and receive a negative result) would be much less risky from a legal perspective.  Indeed, although not completely analogous, many companies are placing employees who have sought exemptions to mandatory vaccinations on unpaid leaves of absences (see, e.g., an article discussing United Airlines’ policy here).

Question 4.  Is it possible that the employer would be required to pay for testing for those employees who qualify for a religious or medical exemption?

Answer:  There is nothing in Biden’s announcement or the Action Plan that indicates that there would be a two-pronged approach to deciding who would pay for testing, depending on whether the individual simply declined the vaccination or if he/she sought an exemption (either religious or medical).  Thus, although it is possible that the DOL could announce such a rule, such an outcome is unlikely. Rather, we believe the answer to this question is the same as the answer to #1 above.

That being said, assuming that employees are responsible for paying for their own testing, an offer by an employer to pay for the testing of an employee who qualifies for a religious or medical exemption could be at least part of a reasonable accommodation granted to such an employee.  Keep in mind, however, that employers should not have a blanket reasonable accommodation for all requesting employees that is decided before the request is made.  Rather, an employer should only decide what reasonable accommodation is appropriate, and then potentially grant such reasonable accommodation, after an individualized assessment with the requesting employee, and after an interactive process between the employer and the employee has occurred in which it is determined what is, or is not, a reasonable accommodation.

We hope you find these wage and hour-related FAQ’s helpful. As the ETS becomes a reality in the near future, there will undoubtedly be plenty more employment-related questions that arise. We will continue to keep you updated on the latest developments.