July 22, 2019

July 22, 2019

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July 19, 2019

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Promoting Wellness, Not Litigation

With ever-increasing employer health care costs, it’s not surprising that Workplace Wellness Programs are becoming more common and comprehensive. According to Fidelity Investment’s fifth annual wellness survey, 95% of companies plan to offer some kind of health improvement program for their employees, and plan to spend an average of $594 per employee on wellness-based incentives. In a bid to reduce health care costs, and protect employees and customers from illness, many employers have implemented coercive, or even mandatory Workplace Wellness Programs. When these programs make employee participation a term and condition of employment, employers must administer them with care or risk violating federal, state and/or local employment laws.

Flu Shots

In 1981, the United States Centers for Disease Control and Prevention (CDC) recommended that all health care workers be vaccinated annually. Today, the CDC recommends that everyone six months of age and older get a flu vaccine every season. In an effort to protect their employees, and the public, some health care and service industry employers, among others, have implemented mandatory flu shot programs. These programs require close attention to applicable wage and hour and anti-discrimination laws.

Federal law requires employers to pay employees for all hours worked, and many states, like California, require employers to reimburse employees for necessary expenditures or losses. Accordingly, an employer who mandates that employees get a flu shot as a condition of employment should ensure that employees are properly compensated and reimbursed for expenses incurred as a result of such mandate. For example, time spent by employees to schedule and travel to and from a clinic to obtain a mandatory flu shot should be paid. Similarly, employees must be reimbursed for the cost of transportation, any insurance co-payment, or other out of pocket expense directly related to a mandatory flu shot program.

California and Federal anti-discrimination laws also require employers to carefully consider an employee request to be exempted from mandatory flu shot programs due to a bona-fide religious or disability-related objection. Upon receiving such an objection, these laws require employers to give employees an alternative to a flu shot, unless that alternative – known as a “reasonable accommodation” – poses an “undue hardship” to the employer. Accommodations may include allowing employees to wear a mask, or providing a transfer to a different employment position with less exposure to the public. Whatever the outcome, each employee request for an exemption should be given individual and serious consideration.

Other Workplace Wellness Programs

Apart from mandatory flu shot programs, other Workplace Wellness Programs may be seen as mandatory, or at least coercive. In Watterson v. Garfield Beach CVS LLC, filed in the U.S. District Court for the Northern District of California, the plaintiff initiated a class action lawsuit on behalf of CVS cashiers claiming damages related to a Workplace Wellness Program requiring participants to complete an annual health screening and online wellness review. Plan participants who elected not to undergo the screenings had to pay an additional medical premium of $50 per month, according to the suit. The suit alleged that this program violated several sections of the California labor code, including failure to pay hourly wages, failure to indemnify for expenses, and unlawful wage deductions. After three years of litigation and appeal, the Ninth Circuit Court of Appeals found definitively in favor of the employer, holding that because CVS did not “require” the employee to sign up for health insurance, and because participation in the wellness program was not a “condition of her employment,” there was no violation of California wage and hour laws. Although the Court here found in favor of the employer, the employer was still subjected to three years of litigation. Thus, we recommend employers carefully structure their wellness programs to minimize the likelihood of litigation.

One easy way to avoid the appearance of mandatory or coercive Workplace Wellness Programs, and promote employee morale, is to provide incentives for participation, rather than penalties. For example, employers may offer employees a monthly “bonus” for their participation in a Workplace Wellness Program, taking into account this added cost when determining employee pricing. An incentive-based Workplace Wellness Program can provide substantial benefits to the employer and employee alike and, when designed and implemented correctly, keep both out of the courthouse.

Copyright © 2019, Sheppard Mullin Richter & Hampton LLP.

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About this Author

Wesley Shelton, Labor and Employment Attorney, Sheppard Mullin, Law firm
Associate

Wesley Shelton is an associate in the Labor and Employment Group in the firm's Orange County office.

Wesley Shelton advises clients in a wide range of labor and employment legal matters, including those related to global mobility and immigration issues.

Mr. Shelton has extensive experience handling all forms of discrimination and wage and hour violation cases in state and federal court.  He previously served as a Foreign Service Officer with the U.S. Department of State, working at U.S. Embassies and Consulates in West...

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