HR REPORT: Show Me the Money: Vaccination Incentive Policies

Workplace morale, political concerns, the emergency use authorization – these reasons, among others, are why many public employers are not presently mandating the COVID-19 vaccine.  Nonetheless, and especially in light of the recent CDC guidance stating that vaccinated individuals can be indoors without masking or social distancing (, employers are looking to maximize the number of vaccinated personnel at their workplaces. That being the case, employers are asking whether they may implement a vaccine incentive policy, and if so, what would that look like? Fortunately, the Equal Employment Opportunity Commission (EEOC) recently issued new guidance on such incentive policies.

Before the new guidance was issued, employers seeking to offer a vaccine incentive faced a sea of uncertainty. Mainly, they had to be mindful of the Americans with Disabilities Act (ADA) and the EEOC’s Proposed Rules for incentives for wellness programs sponsored by employers. Title I of the ADA prohibits discrimination against individuals on the basis of disability in regard to employment compensation and other terms, conditions, and privileges of employment, including “fringe benefits available by virtue of employment, whether or not administered by the covered entity.”  Fringe benefits include the benefits offered to employees who become vaccinated. Under the Proposed Rules, which were frozen by the Biden administration, there was an argument that for a vaccine incentive to be lawful (i.e., in compliance with ADA), the incentive could only be de-minimis, meaning something of little or nominal value. For example, an employer could offer a bottle of water or a $5 gift card, but not airline tickets or $100 to employees who became fully vaccinated.

The new EEOC vaccine guidance makes clear that employers may offer any incentive to employees who affirmatively state that they have been vaccinated, or to those who provide documentation (vaccination card) or other confirmation that they received a vaccination. The incentive offered is only limited when employers administer the vaccine directly or through an agent to their employees – in that case, the incentive cannot be so substantial as to be coercive.

In short, then, the EEOC has stated that employers may offer a vaccine incentive and may require employees to provide proof of vaccination to receive the incentive. Therefore, the question becomes: how should employers implement a vaccine incentive policy? Below are three steps employers should follow when crafting an incentive policy.

First, employers must decide whether, and, if so, how they will require proof of vaccination in order for employees to qualify for the incentive program. Employers have a few options here: they could establish an incentive program based entirely on the honor system; or, to ensure employees are being vaccinated, they could require some type of proof, such as having employees provide a written certification confirming their vaccination status or by asking employees to provide a copy of their vaccination card. If either of these latter options are selected, the employer must maintain such documentation as confidential employee medical information.

Second, employers must determine what incentive they will offer to employees for being vaccinated.  Nationally, many companies are offering paid time off for employees to be vaccinated. Giants like Amazon are offering frontline workers who get vaccinated a bonus of up to $80. Walmart takes the prize for a unique twist on a vaccination incentive: employees who show their vaccination card are being offered a $75 bonus; however, if they do not show their card, but tell Walmart that they have been vaccinated, then they may take their masks off.  While this approach may be problematic for a number of reasons, it is an interesting twist. Incentives, therefore, can be monetary, leave benefits, an option to take masks off, or some other incentive.  As outlined by the EEOC, the only limitation here is that the incentive cannot be coercive if the employer is administering the vaccine themselves or through an agent.

Third, employers must determine how they will treat employees who do not get the vaccine. In light of the recent CDC guidance – indicating “mask or vax” – employees who are not vaccinated should continue to wear PPE and social distance. Of course, different rules for vaccinated versus unvaccinated employees can have an impact on morale within the workplace. To avoid a situation in which only unvaccinated people are wearing masks, employers would be wise to adopt a policy clearly stating that vaccinated people can also continue to wear masks if they prefer to do so.

In addition to the three steps, employers with unionized workforces must be mindful that a vaccine incentive will likely be subject to bargaining. Hence, it would be prudent to consider establishing a labor/management strategy for approaching the union about the topic in advance.

While employers have shied away from implementing a mandate, many have been explicit that they want their employees to become vaccinated. The EEOC has cleared the way, at least under federal law, for employers to nudge their employees toward becoming vaccinated by implementing incentives. As with any important policy, before implementing a new vaccination incentive policy, employers should discuss the changes with their legal counsel.