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As normal banking activities resume, list of concerns includes mandated vaccinations, special accommodations and paid leave

By Steven S. Greene

With the rate of infection dropping and the level of vaccinations increasing, we are now turning our attention to resuming normal banking activities.

As we move forward, we are confronted with compliance questions and employee relations issues. The most compelling current topics include the ability of banks to mandate vaccinations, accommodation obligations, vaccine incentives and paid leave obligations.

Mandating vaccines

Filling syringe for vaccinationAs vaccines become more widely available, many are asking whether banks can legally require employees to be vaccinated as a condition of continued employment. Employees who refuse would be subject to termination. That question has legal and practical components. 

From a legal perspective, the Equal Employment Opportunity Commission, the federal agency that enforces the Americans with Disabilities Act, has provided specific guidance on this question. 

In its Dec. 16, 2020, responses, the EEOC stated that employers can require employees to show proof of vaccination to remain employed. The request and vaccination obligation are not viewed as improper under the ADA, or any other employment discrimination law enforced by the EEOC. 

At that same time, we are seeing an argument and one federal district court action in New Mexico, which challenges mandated vaccinations. The argument is based upon the federal law that regulates “emergency use authorizations.” Each of the three available vaccines is governed by an emergency use authorization. 

While this federal law does not specifically prohibit employers from mandating EUA vaccinations, it does contain an obligation to advise individuals regarding the “consequences” of declining the vaccination. We anticipate additional legal challenges to mandated vaccinations and the proper interpretation of this emergency use authorization statute is uncertain.

More generally, in our interactions with community banks, we recognize that some employees have sincere concerns about the safety of vaccines. We also see these concerns in communities across Texas. Texas Gov. Abbott has challenged the concept of “vaccine passports,” which gets to this same issue. Banks may be permitted to legally mandate vaccines, but it appears that negative employee relations and community relations implications will follow.

Duty to accommodate

Group of diverse business people

While the EEOC has advised that banks can implement mandated vaccination policies, we will need to manage two possible accommodation obligations. First, under the ADA, if an employee qualifies as disabled and if the impairment prevents the employee from being able to safely be vaccinated, the duty to accommodate would be triggered. 

Under those circumstances, the bank would be expected to consider a wide range of alternatives in which the individual could retain employment, but not obtain the vaccination. 

This could include remote work, workplace position and PPE measures. This duty to accommodate under the ADA only arises if the employees can demonstrate that they qualify as disabled and their specific disability conflicts with the ability to get vaccinated.

We may also have a duty to accommodate religious practices or observances under Title VII of the Civil Rights Act of 1964. This law is also enforced by the EEOC. Here, if an employee follows a specific religious practice or observance and obtaining the COVID vaccine is inconsistent with that practice, then we encounter another duty to accommodate. 

As before, we can require employees to provide proof defining the religious practice or observance and the conflict with the requested vaccination. If those burdens are satisfied, then we are expected to undertake an accommodation evaluation exercise. The duty requires the bank to make a reasonable accommodation to address the conflict, but banks are not obligated to accept the accommodation preferred by the employee or their treating physician. Banks do have flexibility.

Absent an employee qualifying for accommodation in connection with a disability or religious practice, the vaccine mandate can be implemented, and employees can be discharged for failing to satisfy that condition of employment.

Vaccine incentive

Money wrapped as a gift

Banks have also studied whether to offer employees an incentive to encourage them to get vaccinated. The thinking is to encourage that decision but leave that decision up to each employee’s own determination. 

From a legal perspective, these incentives are permissible. Cash payments or awards may have tax or withholding obligations, but they remain an available option. One concern that has arisen involves vaccine complication liability for the bank. 

If the bank encourages an employee to be vaccinated through incentives and if the employee experiences complications, does the bank become potentially liable for that exposure. The answer is unknown. The decision whether to offer incentives and the nature of the incentives are solely within the discretion of the bank. 

Return to office

Bank tellers working during pandemic

As we have worked through these disruptions, most of our organizations directed employees to work remotely. In some cases, we still have employees working remotely. Another question that has arisen is whether banks can require employees to return to bank offices.

Here, in the vast majority of cases, the answer is yes. Banks can require employees to return to the office and perform their work at those locations. We are not obligated to continue all remote work assignments.

One exception would be if an employee qualifies as “disabled” under the ADA, where that disability prevents the employee from safely performing their work at bank offices. In that situation, we would consider whether that health concern can be reasonably accommodated, short of permitting the continuation of remote work. We have seen this argument raised by some employees already, as they have resisted the resumption of normal bank business activities.

When an employee raises this claim, we need to study the specific facts carefully. The ADA permits us to request information from the employee and the employee’s treating physicians to understand the impairment and the claimed conflict with returning to the office. Employees are obligated to cooperate with those information-gathering activities. 

We have three questions that need to be answered. Is the employee “disabled” within the meaning of the ADA? Does that disability elevate the employee’s health risk (including COVID health risk), if required to work at the bank offices? And if those first two questions are answered affirmatively, what reasonable accommodations are available to address the vulnerability but still have the employee work from the office? 

We have seen banks change employee work locations, change employee building access, install local ventilation and take a host of alternative measures, which do not involve continuing remote work.

Paid leave obligations

The American Rescue Plan Act of 2021

Congress enacted COVID paid leave requirements in March 2020 for banks with fewer than 500 employees. That paid leave mandate expired Dec. 31, 2020. Congress provided an election for the first quarter of 2021, where banks could allow employees to utilize any remaining paid leave benefits, and banks would still be entitled to the payroll tax credit for those expenditures.

Most recently, the American Rescue Plan provides a new voluntary election option for banks to provide paid leave to employees between April 1, 2021 and Sept. 30, 2021. The cost of these benefits, both payroll costs and health insurance costs, are recoverable by banks with fewer than 500 employees through a payroll tax credit. We stress again that these benefits are available to community banks, but they are not mandated. 

These paid leave benefits fall into two categories. First, the legislation speaks in terms of emergency sick leave, when up to 80 hours of lost time can be treated as paid leave (10 working days). The qualifications for this benefit are as follows: 

  1. Employee is subject to a federal, state or local quarantine or isolation order;
  2. Employee is advised by a healthcare provider to self-quarantine;
  3. Employee is experiencing COVID-19 symptoms and seeking medical diagnosis;
  4. Employee is caring for an individual subject to an isolation order or advised by a healthcare provider to self-quarantine;
  5. Employee is caring for the employee’s child if the child’s school is closed, or the child’s care provider is unavailable;
  6. Employee is seeking or awaiting the results of a test or diagnosis of COVID;
  7. Employee is obtaining COVID immunization; or
  8. Employee is recovering from an adverse reaction to COVID immunization.

For qualifications 1, 2, 3, 6, 7 or 8, the employee will be eligible to receive paid leave of 100% of their lost earnings, up to $511 per day. For absences attributable to qualifications 4 or 5, the employee is eligible to receive two-thirds of their lost earnings, up to a cap of $200 per day.

The American Rescue Plan provides for up to an additional 12 weeks paid leave for the same qualifying reasons. The Emergency Family Medical Leave Act benefit is paid at up to two-thirds of the employee’s lost earnings, with a cap of $200 per day. 

During a recent telephone briefing we conducted with more than 200 community banks across the country, 75% of the polled banks indicated that they intended to implement all or part of this paid leave benefit starting April 1, 2021.

We definitely have witnessed a challenging environment with our employees and communities over the past 12 months. As we return to some level of “normalcy,” we still confront business decisions that will require careful consideration and planning.

Steve Greene specializes in employment matters for community banks nationally. He regularly speaks to employment lawyers, compensation professionals and human resource managers concerning application of these legal standards on behalf of national and state banking groups, including the Texas Bankers Association. He is a co-founder of ELC, a firm that develops employment compliance products to satisfy the needs of financial institutions.