Gifts and bonuses in exchange for vaccination could violate the law

Widespread vaccination can assist businesses assuring customers of their safety, potentially allowing them to remain open or attract more business. Similarly, vaccination promotes the health of employees, potentially avoiding disruptions due to employee absences. Encouraging vaccination may also be helpful for vaccination uptake, which is important when considering the vaccination levels necessary to build herd immunity. 

As a result, some corporations are offering financial incentives to their employees in exchange for getting vaccinated. For example, Amtrak is offering employees two hours of pay, and the Kroger grocery chain provided $200 worth of store credit and outright payment. However, experts suggest that such incentives can actually have a negative effect and create waste and inefficiency in paying employees when most would gladly get vaccinated for free. In contrast, others note that vaccination is the only real option for curbing the COVID-19 pandemic, and with a significant portion of the U.S. population remaining hesitant, it helps to incentivize employees to get vaccinated as soon as possible. 

As offering incentives, rather than mandating vaccination, has become more and more popular for employers looking to encourage their employees to get vaccinated, employers should be mindful of the key considerations of providing their employees with incentives for receiving the vaccine to avoid potential challenges and maintain a healthy and productive workplace.

First, employers must ensure any incentive they offer does not violate the Americans with Disabilities Act. The Equal Employment Opportunity Commission enforces the ADA and limits general wellness incentives. To date, the EEOC has released only limited guidance on vaccine incentives, merely suggesting that employers keep incentives to small (or de minimis) gifts, such as “a water bottle or gift card of modest value,” but it has not defined the boundaries of what incentives are acceptable, even though many businesses have asked the EEOC to clarify the limits of vaccine incentives.

Second, if employers offer incentives to receive a vaccine that some of their employees cannot receive due to medical or religious reasons, they are in danger of potentially violating discrimination laws because some of their employees cannot receive that benefit. Wellness programs require reasonable accommodation for disabilities unless such accommodations are costly, compromise safety, decrease workplace efficiency, infringe on the rights of other employees, or require some employees to do more than their share of hazardous or burdensome work. Also, persuasive incentives would violate the ADA or Genetic Nondiscrimination Act (“GINA”) by making wellness programs coercive rather than voluntary as financial incentives put excessive pressure on people with lower incomes, but small benefits will likely not cross that line.

Third, the ADA prohibits employers from coercing employees into providing their disability-related information, which could be solicited by the screening questionnaires about receiving COVID-19 vaccines. Employers must be judicious not to elicit details about their employees’ disabilities, especially when they are the ones providing the vaccine.

Another concern is for monetary incentives or incentives paid via time off, which can be regulated by the Fair Labor Standards Act. Monetary incentives can be deemed nondiscretionary bonuses, which under the FLSA must be included in the employee’s rate of pay for that period. By including this additional pay, the overtime pay rate calculation is impacted, and failing to adjust for it would violate the law. These incentives not only add an additional expense (higher overtime pay rate), but also add administrative burdens for the employer to ensure they are compliant. The FLSA also requires compensation for employment-based costs if the expenses reduce the employee’s wages. In this instance, incentivizing vaccination may take time or travel  leading to cost. Employers may choose to compensate employees for these costs, including time spent getting vaccinated or the logistical expenses of getting the vaccine. However, these costs must consider the potential limit that may be set by the EEOC.

Employers considering a vaccine incentive program should use caution, delaying if possible, for clearer guidance. However, if a program is moving forward, employers must make the program voluntary, should keep any incentives small in value, offer accommodations for medical exceptions and religious beliefs, and offer non-monetary or in-kind incentives to avoid violations.   

Additional research would be valuable to expand our understanding of whether and what kinds of COVID vaccination incentives are likely to inflame skeptics’ concerns or would be welcome – with hesitancy levels already high, increasing such hesitancy can have dire effects.

Dr. Y. Tony Yang is a professor and the executive director of the Center for Health Policy and Media Engagement at the George Washington University. Dr. Paul Delamater is an associate professor in the Department of Geography and a faculty fellow at the Carolina Population Center, at the University of North Carolina at Chapel Hill.