For the unaided construction contractor, navigation of changing vaccine mandates can be daunting, and it is no wonder there continues to be confusion about these mandates’ effects. Members of the construction industry have been discussing these rules in terms of how they apply to contractors working on federal or state projects. Now, the federal government is expanding mandates to include all employers with at least 100 employees, regardless of whether they work on federal or state projects.
New mandate applies to all employers
On Nov. 4, the federal government – through the Occupational Health and Safety Administration (OSHA) – issued a new mandate as an Emergency Temporary Standard (ETS) that now applies to all employers with 100 employees or more. In response, several states immediately filed legal actions in federal courts, and on Nov. 6, the Court of Appeals for the Fifth Circuit issued an immediate stay of the ETS pending arguments over whether OSHA had authority to issue the mandate. While the ETS is currently on hold, employers should prepare to comply.
Under the ETS, all employers are required to ensure their employees are vaccinated or undergo weekly COVID-19 testing and test negative in order to work. The ETS requires employers to pay employees for up to four hours at the regular rate of pay for purposes of receiving the primary vaccination dose. Employers may require employees to use accrued but unused sick leave or paid time off to recover from the side effects of a vaccine dose, but may not require an employee to use vacation time if that is in a separate bank of leave. Employers also may not require employees to exceed their paid leave balances so that they go negative. The ETS does not require employers to pay for the costs associated with testing, but provides that other laws or collective bargaining agreements may apply. Oregon and Washington both have state OSHA plans and have 30 days in which to adopt the federal standard, or create their own more restrictive standard.
Prior federal mandate: new effective date
The federal government previously ordered a more onerous requirement for contractors working on federal projects: mandate vaccination for employees who do not have a religious or medical exemption from vaccination – full stop. Basically, there is no testing option for contractors working on federal public works projects. So, non-contractor employers affected by the new ETS might fare better because they would be able to hire employees who agree to comply with the weekly testing requirements versus vaccination.
For public works contractors, including those whose federal contracts have since been modified to include a vaccine mandate clause, the White House recently announced that it would delay the deadline for employees to be fully vaccinated from Dec. 8 to Jan. 4, 2022. Therefore, employees must provide proof of vaccination, or have a medical or religious exemption, or enter the disciplinary process for removal of employees who refuse vaccination.
Contractors that work for the federal government might experience some relief depending on the outcome of several lawsuits filed by different states against the federal vaccination mandates. As of this writing, at least four lawsuits are pending in federal district courts. In these cases, contractors are arguing that the federal mandate is unconstitutional.
COVID-19 has been challenging for employers, and this recent spate of vaccine mandates is not going to make it any easier for contractors to complete projects on time or within budget. And, of course, these evolving mandates will likely constrict an already-tight labor market. Contractors that are affected by these government mandates should consider requesting formal contract modifications to address these effects. Alternatively, they should carefully review their applicable contracts to evaluate whether they can credibly submit a change order request to alleviate potential effects. Also, a force majeure clause might be instructive depending on its exact language.
Whether there might eventually be relief for contractors through the courts remains to be seen. As it stands now, contractors must begin to comply with the vaccine mandates. A best practice for contractors moving forward will be to establish a company-wide vaccination policy, which will vary depending on whether a contractor contracts with the federal, state or local government. For contractors with federal or state contracts, the policy should mandate vaccination and provide information on medical and religious exemptions. For contractors subject to the ETS, one requirement of the standard is for employers to create a vaccine policy that either requires mandatory vaccination, or that allows testing as an option.
Stephanie Holmberg is a Schwabe, Williamson & Wyatt shareholder and the leader of its real estate and construction industry group. Contact her at 503-796-2953 or firstname.lastname@example.org.
Jean Back is a Schwabe, Williamson & Wyatt shareholder. Contact her at 503-796-2960 or email@example.com.