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How companies are cracking down on unvaccinated employees

December 15, 2021, 10:00 PM UTC

Many companies that had once dangled carrots like days off from work to encourage their employees to get COVID vaccinations are now using sticks. 

Earlier this year, supermarket chain Kroger offered employees a $100 bonus to encourage them to get vaccinated, for example. But fed up with workers refusing to get their jab, the company decided last week to implement harsher tactics.

Unvaccinated Kroger employees who are salaried and not in a union will now have to pay $50 extra monthly for company health insurance. And workers who contract COVID-19 will no longer get two weeks of paid time off.

Kroger is among a growing contingent of large companies that are penalizing employees who refuse to get vaccinated against COVID, nearly a year after vaccines first became available. And so far, companies say the results are promising and that any initial fears of mass worker resignations owing to crackdowns were overblown.

The rise of the Omicron variant of COVID is adding urgency for many companies in ensuring that their workers are vaccinated. Although earlier research shows the variant is less dangerous than its predecessors, it’s highly contagious.

Under an emergency order in September, the Biden administration directed companies with more than 100 employees to ensure that all employees were vaccinated by Jan. 4. However, an appeals court later blocked the rule, calling it a “one-size-fits-all sledgehammer.”

“From economic uncertainty to workplace strife, the mere specter of the Mandate has contributed to untold economic upheaval in recent months,” Judge Kurt D. Engelhardt of the New Orleans–based U.S. Fifth Circuit Court of Appeals wrote in his decision.

Still, companies are free to implement their own policies that punish unvaccinated workers.

In September, Delta Airlines announced a $200 monthly health care plan surcharge for unvaccinated workers. The company cited the huge cost of treatment for unvaccinated workers who fall ill as the reason for hitting vaccine-averse employees in their pocketbooks.

“The average cost of a COVID hospitalization to Delta is $50,000. We’ve spent an enormous amount of money in this last year and a half—very sad situations at that,” Delta CEO Ed Bastian told the Detroit Economic Club last month

Within two weeks of announcing the policy, 20% of Delta’s unvaccinated workers got their first jab. By November, the rate of companywide vaccination had risen from 75% to 90%, according to Bastian, who added that there was no increase in employee turnover or resignations because of the extra charge. 

Utah grocery chain Harmons and banking giant JPMorgan Chase have instituted health care surcharges similar to Delta’s. This week, JPMorgan also announced that unvaccinated employees would no longer be allowed inside the company’s New York headquarters and that because of that ban, vaccinated employees would no longer be required to wear masks at work. “It seems unfair” for vaccinated workers to be penalized because others refuse to get the shot, the company said in a statement. 

Other companies have been even tougher. 

In August, United Airlines announced it would begin firing its 593 unvaccinated employees (a very small percentage of the airliner’s 67,000 U.S. employees). By October the company said that the number of unvaccinated employees dropped by nearly half to 320, which a United spokeswoman said proved that the company’s tougher policy was working.

This week, Google told its employees that they would lose pay and eventually be terminated if they refused to comply with the company’s vaccination policy. An internal memo warned that employees who failed to show proof of vaccination or apply for religious or medical exception by Jan. 18, 2022, would be placed on “paid administrative leave” for 30 days, followed by “unpaid personal leave” for up to six months. Those who still fail to be vaccinated will be terminated, the company said.  

“Our vaccination requirements are one of the most important ways we can keep our workforce safe and keep our services running,” a Google spokesperson said in a statement.

A recent survey by human resources consulting firm Willis Towers Watson found that this new hard-line approach towards unvaccinated employees may soon be widely implemented. The poll of 961 companies found that 17% of businesses surveyed are considering penalizing unvaccinated employees with a health care surcharge. 

“We have reached a point in the pandemic where employers that have worked hard to make it easy for employees to get vaccinated are also considering approaches to make it more difficult for employees to remain unvaccinated,” said Dr. Jeff Levin-Scherz, population health leader at Willis Towers Watson. 

Still, just 2% of companies have already started applying surcharges to the health care premiums of unvaccinated workers, the survey found. About one in five organizations still offers financial incentives to workers who get vaccinated.

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