November 28, 2022

Volume XII, Number 332


Employer Considerations on Vaccine Mandates and Employee Incentives

Last week, the U.S. Food and Drug Administration (FDA) granted full approval for the Pfizer COVID-19 vaccine. This development, along with the recent surge of COVID-19 and the Delta variant, has led many companies to consider implementing vaccine mandates, offering vaccine incentives (such as enhanced paid time off, raffles, gift cards, and even pay raises), imposing surcharges or higher healthcare premiums on the unvaccinated, and other strategies to encourage employees to get vaccinated. When considering these strategies, employers must navigate a wide variety of employment and benefits-related laws to avoid lawsuits and penalties.

Employers are generally permitted to mandate COVID-19 vaccinations for their employees, but must consider and accommodate employees who cannot get the vaccine due to a disability or a sincerely held religious belief. In particular, the “sincerely held religious belief” exception features many potential traps for the unwary as the government has taken an extremely broad view of what is considered a “sincerely held religious belief,” and employers must navigate Equal Employment Opportunity Commission (EEOC) guidance limiting the circumstances in which employers are permitted to ask questions and what questions employers may ask.

While employers are generally allowed to offer vaccine incentives and “disincentives”, such incentives and “disincentives” are limited if the employer or its agent is administering the vaccine rather than relying on a third-party (e.g., pharmacy, employee’s doctor, or public clinic). Specifically, if the employer or its agent is providing the vaccine to employees, then, according to the EEOC, the employer cannot offer an incentive or disincentive that is so substantial as to be “coercive.” Unfortunately, the EEOC has not explained what it considers to be “coercive” other than to say that employees should not “feel pressured to disclose protected medical information,” which is prohibited by the Americans with Disabilities Act (ADA). However, this incentive limitation does not apply if the employer or its agent is not providing the vaccine, and, instead, is only offering incentives for employees who receive the vaccine from a third-party.

Finally, some employers are considering imposing higher healthcare premiums for unvaccinated employees due to the high cost associated with COVID-19. However, employers should consider the cost of the current coverage and the effect of COVID treatments for the unvaccinated as well as the wellness incentive limitations and how the planned surcharge may affect the affordability of coverage for purposes of the Affordable Care Act (ACA).

© 2007-2022 Hill Ward Henderson, All Rights ReservedNational Law Review, Volume XI, Number 242

About this Author

Gordan Hill Employment Litigator Hill Ward Henderson

Gordon is a Shareholder in the firm’s Litigation and Employment Law Groups, and is the firm's Assistant General Counsel for Labor and Employment matters. His practice primarily involves employment litigation and counseling, as well as noncompete litigation and general commercial litigation.

In his employment practice, Gordon advises, represents and defends corporate clients in a broad spectrum of employment-related issues. Gordon has successfully defended clients in a wide variety of employment-related litigation, but...

Robert A. Shimberg Commercial Litigation Attorney Hill Ward Henderson

Robert is a Shareholder in the firm's Litigation Group. His primary practice areas include commercial litigation, corporate compliance, cybersecurity, governmental relations and corporate investigations. He was formerly a prosecutor with the Hillsborough County State Attorney's Office.

Robert has provided compliance-related services and training to over 300 businesses around the country. He has defended businesses against consumer claims, class action lawsuits, and provided representation in connection with government agency inquiries and investigations and...

Kirsten Vignec Employee Benefits Attorney HIll Ward Henderson

Kirsten is a Shareholder in the firm's Corporate & Tax Group and practice co-chair of the Executive Compensation & Employee Benefits Group. Kirsten’s practice involves employee benefit matters associated with the design and ongoing administration of executive deferred compensation plans, welfare benefit plans, Section 401(k) plans, profit sharing plans, and pension plans. Kirsten represents tax-exempt entities, for-profit, private, and publicly-traded companies.

Kirsten represents clients before the IRS, DOL, and the PBGC with respect to employee benefits matters.


Jeff Wilcox Litigation Attorney Hill Ward Henderson Law Firm

Jeff is a Shareholder in the firm’s Litigation Group. His practice primarily focuses on employment law, including wage-hour compliance, FMLA and ADA compliance, allegations of discrimination and harassment, non-compete litigation, and handbook and policy drafting. 

Jeff is active in both professional and Bar-related activities.  He currently serves as a Director on the Hillsborough County Bar Association, Young Lawyers Division Board, and is a member of the Employment and Labor Law Committee in the Defense Research Institute.  In 2014, Jeff received the Hillsborough County Bar...

Ryan M. Guerin - Associate HWH Law complex commercial litigation labor and employment

Ryan is an associate in the firm’s Litigation group. His practice primarily focuses in the area of labor and employment. Ryan also covers an array of general and complex commercial litigation matters.

Ryan represents employers in litigation involving claims of employment harassment, discrimination, retaliation, leave laws, wage and hour laws, whistleblower laws, enforcement of and defense against non-solicitation and non-competition agreements, background check laws, and other employment-related claims. Ryan represents numerous industries, including clients...