Legal Experts Question Vaccine Incentives

Attorneys debate whether giving bonuses to employees who get the shots violates privacy laws or discriminates against non-vaccinated staff.

February 23, 2021

ALEXANDRIA, Va.—Retailers, foodservice operators and medical facilities are offering monetary bonuses to employees if they get vaccinated against COVID-19, but according to Bloomberg Law, these U.S. companies are making an offer that is in murky legal territory.

“The law is really unsettled here, and I haven’t seen any cases on it, but I could see that coming up,” said Valdi Licul, an attorney at Wigdor LLP. “Even when we have the best of intentions, we have to be mindful that there are other people whose rights can be stepped on.”

One question is whether incentives could be deemed as so enticing as to be coercive, violating federal anti-discrimination law. Another is whether providing bonuses is a form of discrimination against workers who can’t get vaccinated for medical or other reasons.

Last week, more than 40 major business groups asked the U.S. Equal Employment Opportunity Commission to comment on the matter, and the agency is considering the issue. It’s not known exactly how many employers are offering incentives, but several large companies have officially announced them.

Tennessee-based Dollar General Corp., which has more than 140,000 store employees, is offering “frontline hourly team members” four hours pay. Colorado-based meat processor JBS USA is offering $100 bonuses to its nearly 66,000 U.S. workers. Oklahoma-based Love’s Travel Stops is offering $75 to its 29,000 employees. Illinois-based grocery chain Aldi, with a workforce of 25,000, is offering two hours pay for each dose an hourly worker receives. European grocer Lidl is offering $200 in extra pay for the 5,000 workers in its U.S. stores.

The 26,000-employee Houston Methodist hospital group is offering a $500 bonus, according to Marc Boom, CEO. “We’re talking about giving people a bonus to thank them for their hard work they’ve done this past year, but also making that bonus contingent on them getting vaccinated,” he said.

John McDonald, a partner with McGuireWoods who represents companies in employment matters, said prioritizing workplace safety is one justification for the incentives: “We’re trying to stem the tide of a pandemic that’s wreaking havoc in all aspects of society,” he said.

Offering vaccine incentives, which potentially touch on worker health information, has triggered concerns about federal laws. The Americans with Disabilities Act and the Genetic Information Nondiscrimination Act, for example, require “wellness” programs that mandate the disclosure of medical information to be voluntary.

Employers may be open to discrimination claims if an employee isn’t receiving a benefit available to coworkers, according to Licul. For example, if a worker receives a vaccine exemption because of a religious belief but misses out on a bonus, “you could argue that I’m being discriminated against on the basis of my religion.”

The EEOC previously attempted to clarify what kind of incentives can be offered by employers to encourage worker participation in company wellness plans, but its first take was struck down by a federal judge. Last month, the agency proposed rules that say employers may offer no more than “de minimis” incentives, like a water bottle or “a gift card of modest value.” Gym memberships or airline tickets, for example, wouldn’t qualify as “de minimis,” the agency said.

But in terms of vaccine incentives, finding the line between what is voluntary and what is compelled is difficult, Licul said. “As the incentive becomes de minimis, it ceases to be an incentive, so what’s the point?”

According to Sharon Masling, a partner with Morgan Lewis and former EEOC official, the administrator of the vaccine also could be a factor in whether ADA requirements apply. “Where this becomes an issue is not in respect to the vaccine itself, but rather the screening questionnaires prior to getting a vaccine,” she said.

It’s possible that an employer could avoid that issue if it provides an incentive for the employee to get the vaccine from an unrelated third party, such as a local pharmacy. “If that’s the case, then there are no limits on incentives,” Masling said.

Some unions, such as the United Food and Commercial Workers, want a green light for incentives to ensure safe workplaces. Local 32BJ SEIU’s President Kyle Bragg also supported incentives, stating they were a more effective strategy than just requiring the vaccine.

For insights directly from legal counsel about COVID-19, vaccines and workers comp, attend the NACS HR Forum, taking place live-virtually from March 9-11. Virtual hiring practices, building a pipeline of leaders and diversity conversations are a taste of other topics being delivered by key HR leaders from Sheetz, Maverik, Pilot and Kum & Go.