Who will pay for testing under Biden’s new vaccine mandate for businesses?

CNN

By Jeanne Sahadi, CNN Business

Companies are running the numbers this week as they comb through recently released guidance on how to implement President Biden’s Covid-19 vaccination mandate.

According to the guidance released Thursday from the Occupational Health and Safety Administration (OSHA), employers with at least 100 employees must offer workers up to four hours of paid time during business hours to get the vaccine and paid time off to recover from the effects of the shots if needed.

The rules allow private-sector employers covered under the rule to offer their staff the alternative of getting tested weekly if they choose not to get vaccinated. But employers are not obligated to offer that option. If they don’t, unvaccinated workers would be fired, unless they were exempt from the vaccine requirement for religious or medical reasons.

Should a company offer employees a testing option, the company will not need to pay for the cost of the test or the time it takes to get one under OSHA’s rules. That cost would be the employee’s, according to the guidance.

But here’s the thing: state law will ultimately dictate who pays.

“OSHA is not creating a new obligation for employers to pay for tests. But it can’t do anything about state laws that mandate employers pay for such tests,” said Devjani Mishra, who is the leader of the Covid–19 Task Force and Return-to-Work Team, as well as the Vaccination Working Group of Littler Mendelson, an employment law firm.

By her count, most states — between 30 and 40 — already have laws on the books that will put the onus on the employer to pay for testing costs, in part because it would become a requirement of a person’s job to get one should they choose not to be vaccinated.

Some employers, she said, are estimating their costs could reach millions of dollars for the year once they factor in the mandate’s new record-keeping requirements, the costs of per-person weekly tests and the additional cost of providing on-site testing, which would reduce the time it would take an employee to otherwise travel to and from an outside testing place.

Given that employers only have until January 4 to fully comply with the new mandate, the decision on whether to offer testing as an alternative may ride in part on what they can get done by that time, Mishra said.

It will also rest on the employer’s cost-benefit analysis of just making vaccines mandatory. There’s the risk that employees who don’t want to get vaccinated will leave if there’s no testing option, but there’s also the benefit that the entire staff would be vaccinated and it would cost the company less in time and money than offering tests. In states where they would be allowed to pass testing costs along to workers, employers will also need to weigh how onerous those costs would be on its lower-paid employees, since the tests required may cost north of $100 per week, Mishra said.

Many companies, such as Citigroup, have already gone ahead and issued a get-vaccinated-or-get-fired mandate. So companies just making their call now can look to those who went before to see what fallout, if any, they are experiencing.

OSHA estimates that, in aggregate, complying with the mandate rules will cost employers close to $3 billion. But, as the American Action Forum notes, that only reflects aggregate costs over the six-month period that OSHA’s Emergency Temporary Standard remains in effect. And it does not include testing costs employers would incur in various states should they offer their workforce that option.

Due to the additional costs and effort to set up a testing regimen in a short time, the benefit of simplicity, speed and lower costs may win the day for some employers, said Mini Kapoor, an associate at the law firm Haynes Boone.

“My view is a lot of employers will go toward [only] mandating the vaccination.”

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