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Status of the OSHA ETS on COVID-19 Vaccination for Employers with 100 or More Employees

The first 10 days of January will be action-packed on the Supreme Court floor. The court will hear challenges to the Occupational Safety and Health Administration’s (OSHA) Emergency Temporary Standard (ETS) on January 7, 2022. If the court agrees that the ETS is legally permissible or does not rule on the challenge before January 10, 2022, employers with 100 or more employees must develop, enact, and enforce a mandatory COVID-19 vaccination policy or a policy that allows employees to choose between getting vaccinated and submitting to weekly testing and wearing face coverings.

OSHA published the ETS in November 2021, but due to a number of legal challenges, the ETS was stayed on a national level. The U.S. Court of Appeals for the Sixth Circuit dissolved the stay on December 17, 2021, and OSHA quickly revised its enforcement deadlines. OSHA has stated that it will not issue citations for noncompliance with any requirements of the ETS before January 10, 2022, except that it will not issue citations for noncompliance with the ETS testing requirements before February 9, 2022, so long as an employer is exercising reasonable, good faith efforts to come into compliance with the standard.

In sum, the ETS requires employers to incentivize employees to get vaccinated by providing them with up to four hours of paid time off to obtain each primary dose of the vaccine and to provide paid time off if an employee experiences side effects from vaccination. Alternatively, if an employee chooses not to get vaccinated, employers are not required to pay for the weekly testing. However, depending on local and state law, employers may be required to pay for the time it takes for employees to get tested depending on the circumstances. Employees may be exempt from the vaccination mandate, but not the weekly testing requirement, if they request and are granted an exemption or accommodation based on a disability, medical condition, or a sincerely held religious belief.

The ETS also requires a number of record-keeping requirements, certain notices to be provided to employees, and a formal written policy that outlines the employer and the employee’s obligations. OSHA has published sample policies, answers to frequently asked questions and other resources here.

Status of the Federal Contractor COVID-19 Vaccination Rule

Similar to the OSHA ETS outlined above, there have been a number of legal challenges to President Biden’s Executive Order (EO) 14042 mandating that federal contractors enact and enforce mandatory COVID-19 vaccination for their employees. On December 7, 2021, the U.S. District Court in the Southern District of Georgia issued a nationwide injunction blocking the mandate’s implementation. The Eleventh Circuit Court of Appeals denied the administration’s request to immediately lift the injunction, but it did set an expedited briefing schedule for the appeal. If all goes according to the court’s schedule, there will be a ruling no earlier than mid-January, which will likely proceed to the Supreme Court for review regardless of the outcome.

The federal contractor rule differs from the 100-employer ETS as it does not permit a weekly testing option for employees unless they are unable to be vaccinated based on a sincerely held religious belief or disability. OSHA has been silent on whether employers who would otherwise be covered by the federal contractor rule, but also have 100 employees, must comply with the 100-employee ETS while the nationwide injunction is in place. However, out of an abundance of caution, employers that have 100 employees or more who would also be covered by the federal contractor rule should be ready to implement the requirements of the OSHA ETS by the applicable deadlines unless the Supreme Court rules otherwise.

Status of the CMS Rule on COVID-19 Vaccination

The Centers for Medicare and Medicaid Services (CMS) announced a rule requiring workers at health care facilities that participate in Medicare or Medicaid to be fully vaccinated along with a host of other reporting and data-tracking requirements. This rule applies to employees, whether clinical or non-clinical, as well as students, trainees, and volunteers in covered facilities. It also covers employees who work in these facilities under a contract or other arrangement.

The CMS Rule is currently enjoined in 25 states, including Missouri, and the Supreme Court is set to hear the legal challenges on January 7, 2022. However, with respect to the remaining states and territories, including Illinois, CMS will move forward with enforcing its vaccine mandate. By January 27, 2022, staff at all health care facilities included within the regulation must receive the first dose of a COVID-19 vaccine (or the single-dose Johnson & Johnson vaccine) prior to providing any patient care, treatment, or other services within the covered facility and the second dose of the vaccine by February 28, 2022. Guidance regarding the requirements can be found here, and more coverage is on our Health Care Today blog.

However, CMS has stated that employers that are not subject to the requirements of the CMS Rule should be prepared to comply with the OSHA ETS or the Federal Contractor rule. The agencies have stated that the ultimate goal is for as many employers and employees to be covered by the various vaccination mandates as possible.

Minimum Wage Increases for Federal Contractors

On January 1, 2022, Executive Order 13658 takes effect. The order increases the minimum wage to $11.25/hour for workers performing work on or in connection with existing covered contracts. Additionally, tipped workers on covered contracts must be paid a minimum cash wage of $7.90/hour. However, Executive Order 14026 will raise the minimum wage to $15/hour for employees under covered contracts that are entered into, renewed, or extended on or after January 30, 2022. The rate will be determined annually starting January 1, 2023, by the Secretary of Labor.

The minimum wage increase applies to all federal contracts for construction covered by the Davis-Bacon Act; contracts for services covered by the Service Contract Act; concessions contracts, such as contracts to furnish food, lodging, automobile fuel, souvenirs, newspaper stands, and/or recreational equipment on federal property; and contracts to provide services, such as child care or dry cleaning, in federal buildings for federal employees or the general public. The Department of Labor has indicated that the rule will be applied broadly to workers to protect workers performing “on” covered contracts (i.e., workers directly performing the specific services or construction called for by the contract’s terms) as well as workers performing “in connection with” covered contracts (i.e., workers performing other duties necessary to the performance of the contract). This will include workers who provide support on covered contracts that is necessary for the performance of the contract, such as a security guard monitoring a covered project.

DOL Final Rule regarding Partial Withdrawal of Tip Regulations

The Department of Labor partially withdrew its prior regulations with respect to tipped employees under the Fair Labor Standards Act (FLSA). Under the FLSA, employers can satisfy the minimum wage requirements for tipped employees by paying them at least $2.13 per hour if the employees earn enough in tips to make up the difference between that wage and the full minimum wage. The difference is referred to as a tip credit. The Final Rule can be found here.

The Final Rule clarifies that an employer may only take a “tip credit” when an employee is performing work that directly produces tips or work that directly supports work that is tip-producing (also known as side work in the service industry) and “is not performed for a substantial amount of time.” The DOL defines this standard as exceeding 20 percent of the employee’s workweek or performed for a continuous amount of time exceeding 30 minutes, which is generally referred to as the 80/20 rule. However, the DOL explained that an employer must pay workers full minimum wage for any work does not directly or substantially support tip-producing activities and for side work that exceeds the 80/20 rule.

The DOL also clarified several amendments to section 3(m) of the FLSA that concern tip pooling. The Final Rule establishes the DOL’s right to assess civil monetary penalties up to $1,100 per violation against employers that unlawfully retain employees’ tips. Employers are precluded from keeping any of the tips that tipped employees receive whether they intend to claim a tip credit or not. While employees must retain all of the tips they receive, employers can still establish a tip pool for tip sharing among employees who customarily receive tips. However, the Final Rule establishes that supervisors and managers cannot take tips from a tip pool.

Additionally, the DOL now permits employers to require customarily tipped employees (such as servers) and customarily non-tipped employees (such as dishwashers and cooks) to pool their tips and split the proceeds. But if this non-traditional tip pooling is utilized, employers cannot take a tip credit. The new rule also requires employers to redistribute tips collected as part of any mandatory tip pool no later than when employers pay wages to employees.

Finally, the Rule creates new recordkeeping obligations for those employers that operate a mandatory tip pool but do not take a tip credit, which include identification of tipped employees on payroll records and maintenance of weekly or monthly tip amounts received by each employee. With this Final Rule, employers that currently take a tip credit should evaluate whether the nontraditional tip pool option may have an employee morale benefit that outweighs the benefit of claiming the tip credit.

If you have questions or would like to discuss any of the issues outlined here, please contact an attorney in Greensfelder’s Employment & Labor Practice Group.