President Biden Will Require Certain Federal Contractors and Businesses to Mandate COVID-19 Vaccines or Regular Testing for Employees

On September 9, 2021, President Biden issued a six-pronged Path Out of the Pandemic (the “Plan”) and Executive Order on Ensuring Adequate COVID Safety Protocols for Federal Contractors (“EO”) that will require certain federal contractors and businesses with 100 or more employees to have their employees either fully vaccinated or subject to regular COVID-19 testing. While the new requirements are expected to impact over 80 million workers in the private sector, the full details of these requirements remain to be seen. The Plan directs the Department of Labor’s Occupational Safety and Health Administration (“OSHA”) to issue an Emergency Temporary Standard (“ETS”) in the coming weeks to provide further details on the new requirements. Similarly, the EO instructs the recently created Safer Federal Workforce Task Force (the “Task Force”) to issue guidance later this month detailing the requirements for federal contractors.

Expected Coverage

The Plan states that all businesses with 100 or more employees will be covered by OSHA’s ETS when issued. While the ETS and EO will likely cover all employees who work onsite at a covered employer, it is unclear whether the requirements will extend to employees who work full-time from their home offices.

The EO comes on the heels of the presidential mandate announced on July 29, 2021 (the “July Mandate”) for federal contractor employees, but goes a step further. The July Mandate required all federal contractor employees who work at federal facilities to attest to their fully vaccinated status or face repeated testing and other COVID-19 safety protocols, such as strict masking and social distancing requirements. The EO extends COVID-19 safety protocols to certain employees of federal contractors and subcontractors, regardless of whether they work at a federal facility. The EO, however, will not apply to all employees of federal contractors and subcontractors. Instead, it only applies to employees of federal contractors and subcontractors working on or in connection with the following types of federal contracts:

• Procurement contracts for services, construction, or a leasehold interest in real property;
• Contracts for services covered by the Service Contract Act, 41 U.S.C. 6701 et seq.;
• Contracts for concessions, including any concessions contract excluded by Department of Labor regulations at 29 C.F.R. 4.133(b); and
• Contracts entered into with the federal government in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public.

The EO expressly exempts the following types of contracts and workers:

• Federal grants;
• Contracts or subcontracts that are at or below the simplified acquisition threshold, which is currently $250,000, subject to limited exceptions;
• Subcontracts solely for the provision of products;
• Contracts with Indian Tribes and the Indian Self-Determination and Education Assistance Act; and
• Employees who perform work outside the United States or its outlying areas.

The EO requires all executive departments and agencies to include a clause in each covered contract, modification, or renewal requiring the contractor for the duration of the contract to comply with guidance issued by the Task Force related to the contractor’s workforce. The EO will require contractors to flow down this clause to all covered subcontracts at any tier.

Anticipated Requirements

It is anticipated that covered businesses will be required to have their employees either prove their fully vaccinated status or produce negative COVID-19 test results on at least a weekly basis before coming to work. OSHA has also been instructed to require covered employers to provide paid time off for the time it takes employees to get vaccinated and recover if they are under the weather post-vaccination. Employers in many healthcare settings that receive Medicare/Medicaid reimbursements will also be required to mandate COVID-19 vaccinations for their workers as a condition of those healthcare businesses receiving Medicare/Medicaid reimbursement.

The EO is silent about the actual requirements for contractors and instead relies on the Task Force to provide the “definitions of relevant terms for contractors and subcontractors, explanations of protocols required of contractors and subcontractors to comply with workplace safety guidance, and any exceptions.” Contractors, however, will likely be subject to similar vaccination or testing requirements that OSHA has been instructed to implement and requirements from the July Mandate for federal contractor employees working at federal facilities.

Many of the details of these new requirements are still unknown, including:

• How employees will prove their vaccinated status or negative COVID-19 test results;
• The confidentiality or privacy standards that will apply when collecting vaccination or testing information from employees;
• Whether there will be any exemptions for employees beyond accommodations for disabilities or sincerely held religious beliefs;
• Whether the standards will apply to employees who work full-time remotely;
• Any new guidance or standards that will apply beyond those already issued by the Equal Employment Opportunity Commission for accommodating workers with disabilities or sincerely held religious beliefs;
• Whether employers will be required to pay for COVID-19 testing; and
• Whether there will be a ramp-up period for compliance.

Businesses that do not comply could face OSHA fines of up to $14,000 per violation, but there are few other details about how these new requirements will be enforced or potential penalties or remedies that businesses may face for noncompliance.

Projected Effective Dates

Although the White House indicated that OSHA would issue its ETS in the coming weeks, no definitive timeline for the ETS has been announced. It took nearly six months for OSHA to develop emergency standards for healthcare employees. OSHA, however, will likely move quicker in issuing this ETS considering the significant spotlight on this issue and direction from the top. After the ETS is issued, employers may have some period of time to come into compliance before OSHA begins enforcement, but employers should not expect much breathing room. Indeed, employers were only given a few weeks to comply with OSHA’s emergency COVID-19 standards for healthcare employers.

Unlike the OSHA’s ETS, the EO provides timelines for implementation of its new requirements:

• By September 24, 2021 – The Task Force must issue its guidance.
• By October 8, 2021 – The Federal Acquisition Regulatory Council must amend the Federal Acquisition Regulations (FAR) to include the contract clause to implement the requirements of the EO and the Task Force.
• By October 8, 2021 – Contracting agencies must take steps to include the new clause in contracts entered into, renewed, or modified after October 15, 2021.
• October 15, 2021 – The new clause must be inserted into covered contracts that are issued, extended, or renewed on or after that date, subject to certain exceptions.

What Should Employers Do Now?

The ETS and EO may face legal challenges from employers, business groups, and state governments once they go into effect. Whether those legal challenges will succeed remains to be seen.

In the meantime, contractors and businesses covered by the Plan and EO should start planning for how they will implement and operationalize these new requirements. Employers that have not mandated vaccines will need to start thinking about how to navigate the numerous legal and practical issues that come with vaccine mandates, including obtaining and tracking vaccination status, testing policies and requirements, wage and hour compliance, accommodations for disabilities and sincerely held religious beliefs, confidentiality and privacy issues, and, if unionized, bargaining with their employee representatives. These new requirements should also be assessed in light of the numerous state and local COVID-19 safety protocols, which may conflict with the new requirements or provide additional protections or obligations. Although employers that have already mandated COVID-19 vaccines for their workers may have addressed many of these issues, those employers should revisit their policies and procedures in light of these new developments.