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With Covid-19 cases declining in the United States, mask mandates lifting, and life getting back to a little more like normal, many employers are considering bringing employees back to the office, and how to do so safely. As a part of this return to in-office work, many employers are gauging vaccination rates among staff and asking whether they can provide a little extra incentive to employees to get their shots. But is this legal?

Yes. The EEOC recently issued guidance that makes clear that an employer may offer incentives to employees to get vaccinated. The EEOC draws a distinction between an employer offering incentives for employees to get vaccinated through the employer (through a vaccination clinic on-site, for example) and employees being vaccinated on their own through a pharmacy or other health care provider.

If an employer is the one offering the vaccine, then any incentive must not be “so substantial as to be coercive.” There is no corresponding limit on the size or nature of an incentive (or penalty) offered by employers asking for proof of vaccinations obtained in the community, but employers would be well-cautioned to be careful in setting the size of an incentive. In either situation, a $50 or $100 gift card may motivate employees who are on the fence about being vaccinated, when a $5 or $10 gift card might not move the needle (so to speak).

If an employer decides to offer vaccination incentives, it must be careful to protect employee confidential health information if it is going to keep a record of proof of vaccination. Similarly, employers should bear in mind that the IRS considers cash or cash equivalents (like a gift card) as “never excludable from income” – i.e. it would need to be reported as part of the employee’s income for employer and employee payroll tax purposes.

If you have any questions about Covid-19 vaccination incentives or workplace policies, please reach out to your FOS attorney.