Many major employers are going ahead with policies to require employees to take steps to combat Covid-19, even if the Supreme Court says they don’t have to do so.
A survey by management consultant Gartner of more than 200 major employers last week found 30% still are requiring or will require their employees to get vaccines. Another 50% have policies in place or in the works to give employees a choice between vaccine or weekly tests. Only 20% are dropping all policies that would require action by their employees.
President Joe Biden announced federal rules last fall that would have required employers with 100 or more workers to require them to get vaccinated or have weekly tests. Employers could choose to comply by requiring vaccines with no testing option. A separate federal policy would require vaccines, with no testing option, for federal contractors.
But the US Supreme Court struck down the rule on the larger employers on January 13, and the Biden administration formally dropped the rule Wednesday. Lower federal courts have put the federal contractor mandate on hold.
Still, employers are moving ahead with their own policies, as they are free to do even if they can’t be required to do so.
“All of the legal wranglings indicate that if a company wants to have a mandate, they can have a mandate,” said Brian Kropp, the chief of research at consulting firm Gartner’s HR practice.
Kropp said 45% of the employers it surveyed in December — before the court ruling — were planning vaccine mandates or had one in place, while the other 55% intended to give employees the choice between vaccine or testing. All the employers that Gartner surveyed have 1,000 or more employees.
Why some companies are dropping mandates
The 20% of employers who are now dropping any vaccine or testing requirement are doing so because of pushback from employees who oppose such a rule, or due to the cost and effort to put such rules in effect.
“A lot of companies explained that they were doing so only because the government told them they had to do it,” Kropp said. “Now they don’t have to.”
He said among the major employers who have dropped all vaccination or testing requirements are General Electric (GE), which has about 56,000 US employees, and Starbucks (SBUX), which has 235,000 US employees.
GE said that its change of policy is prompted by the court decision.
“In the US, the vast majority of our employees are vaccinated. We continue to encourage all our employees to be vaccinated,” said a GE spokesperson.
Starbucks also cited the Supreme Court decision for its change in policy.
“We respect the court’s ruling and will comply,” John Culver, chief operating officer and group president for North America at Starbucks, said in a notice to Starbucks employees. He said Starbucks will follow local requirements, and that the company still encourages workers to get vaccinated and boosted.
Reasons employers keeping mandate
Kropp said part of the reason 80% of the employers it surveyed are going ahead with the plan is the desire to cut down on absenteeism among workers. With the surge of Covid cases due to the very contagious Omicron variant, the number of sick days is soaring and some employers have been forced to cut back operations due to reduced staffing.
The vaccine doesn’t necessarily prevent cases caused by Omicron, but it does reduce the chance of serious cases that require hospitalization or cause death.
And the cost of hospitalization for employees suffering from Covid can be substantial. Last fall, Delta Air Lines (DAL) disclosed it spent an average of $50,000 per employee or covered family member hospitalized with Covid. While Delta does not have a vaccine mandate, it raised the insurance premium for non-vaccinated employees by up to $200 a month.
Delta and other airlines did suffer from increased flight cancellations during the holiday travel season due to a combination of employees calling out sick because of Covid and bad weather. Delta estimated the canceled flights during the final two weeks of 2021 cost it $80 million.
United Airlines (UAL) does have a vaccine mandate that it put in place before the federal rules were announced. It said virtually all of its US employees are now vaccinated. And while it had its own flight cancellations during the holidays due to workers coming down with Covid, it said those cases are more mild than they would have been without the mandate.
“Because of our vaccine requirement, we are no longer losing vaccinated employees to Covid, and we still don’t have any vaccinated employees hospitalized,” said United CEO Scott Kirby in comments to investors last week.
Citigroup (C) announced a vaccine mandate in October after the federal rules were announced. It gave its 65,000 US employees until Jan. 14 to provide proof of vaccination or apply for exemption from the policy. Those who did not do so were placed on unpaid leave and will be terminated at the end of January if they are still not in compliance. That policy is still in place.
The company said it has received near total compliance with employees either getting vaccinated or being granted exemptions.
“This level of compliance helps us create a safer workplace, protect your families and our communities, and ensure continuity of our business operations,” said Sara Wechter, head of human resources at the bank, in a post on LinkedIn. “Our goal has always been to keep everyone at Citi healthy, and we sincerely hope all of our colleagues take action to comply.”
Different rules across the country
Nationally, Citi employees can request exemptions for health or religious reasons. State rules and laws in Texas and 10 other states with limits on employer mandates often allow employees to request an exemption for reasons of personal beliefs. But while Citi did not have to put the policy in place for employees in most of the country, in its hometown of New York City, the city government ordered all private employers to mandate vaccines for all employees not working remotely.
The courts have not yet struck down those rules because they were imposed by health officials, unlike the federal rules which were mandated by the Labor Department’s Occupational Health and Safety Administration. The difference between rules in different states and cities is one of the things that employers were hoping to avoid with a national rule, said Kropp.
“What companies want is simple, straightforward thing so they know exactly what they have to do to meet the letter of the regulation,” he said. “This seems to be moving to the states and cities.”
That also can prompt national employers to keep vaccination rules in place, to comply with the most stringent rules that apply to a significant number of their employees.
