Larger contractors on the fence about company COVID vaccination policies got a shove on September 9, when President Biden announced that business owners with 100 or more people on the payroll will have to ensure that their workforce either gets vaccinated or provides weekly negative tests.

Biden’s announcement is at the center of the administration’s most recent efforts to combat COVID. The Delta variant’s increased transmissibility, and a hardened but sizable anti-vaccination minority in the U.S. population, have driven a spike in cases that rivals pre-vaccine numbers in some areas.

Multiple industry sources and data portray the construction industry in general as lagging behind the general population in terms of COVID vaccination rate.

A related Executive Order from the White House requires COVID vaccination by October 15 for both the federal workforce and any contractor employees who do work on federal property.

Who Will Pay, and Who Will Stay?

Once in effect, the upcoming OSHA Emergency Temporary Standard (ETS) will affect an estimated 80 million private sector workers in the U.S., at minimum.

For now, not only is the ETS not in effect, but OSHA has not finished writing it. It seems certain that employers will be expected to collect some type of affirmation that an employee is vaccinated, or that an unvaccinated employee has tested negative. But until the Department of Labor issues the formal document, unknowns abound regarding the details. It could be a few to several weeks before a final ETS goes public.

The plan is expected to include accommodations for religious and medical exemptions.

Larger contractors will be especially interested in the details of what information or documentation they are expected to collect – both for vaccinated and unvaccinated employees – as well as the question of who absorbs any recurring testing costs for the unvaccinated.

Of course, another question is how many employees will consider leaving a company rather than get vaccinated or undergo weekly tests.

“Most of my clients say, ‘I cannot mandate vaccines. If I do, 15% to 20% [of my workforce] will walk,’” said Charles Billington III. A partner with labor and employment expertise at Vorys’ Cleveland office, he spoke at a recent webinar by Employers Resource Association, a partner of HARDI that serves employers in Ohio, Kentucky, and Indiana.

Billington describes his clients as mid-sized or small businesses, not unique to any particular industry.

While some larger employers may be able to enforce the OSHA mandate or implement their own requirements and absorb a personnel loss, he said, other owners have concerns about their ability to function in the wake of a 20% staff departure.

Between the HVAC labor market’s preexisting condition and the construction industry’s overall vaccination trends, the potential downside for HVAC contractors could be at least as acute as it is for anyone else.

Or maybe not. ACCA’s president and CEO, Barton James, does expect that some smaller firms might try to make the most of any migration from OSHA-compelled requirements. However, he concluded that while “it will be interesting to see the creative approaches used, I don’t suspect this will move the needle.”

The arrival of a federal edict might actually ease troubles for contractors who must comply with various clients’ vaccination requirements but who have not felt willing or able to implement requirements for their own people.

“Reports are in some if not many commercial markets in urban areas, and owner mandates for vaccinated service providers are proliferating rapidly,” said MCAA general counsel John McNerney.

At this point, vaccine “resistance would forfeit work and market share,” he added.

Chris Carson, president and COO of Carson-Mitchell Corp. in Springfield, Missouri, recently talked about his firm’s dilemma in an Association of General Contractors of America webinar that took place prior to the Biden announcement. At that time, Carson said his company had no plans to mandate vaccinations. On the other hand, he explained, hospitals make up a good part of Carson’s potential customer base for construction and crane work, and they have rules.

“We have a resistance among some of our employees to get vaccinated. We’re working on that quite a bit, as is everybody, but it [affects] our ability to do work for those types of customers, when they insist — and I happen to agree with them — that their vendors are vaccinated.”

If the company doesn’t have adequate vaccinated personnel available at the right time, Carson said, then “either our competitor gets the job, or nobody can get to it and the schedule becomes a nightmare for us or for the hospital itself. So we’re seeing the resistance to vaccination really hit the bottom line in that part of our business.”

The Knowns, For Better and For Worse

Uncertainty may reign for another one to two months when it comes to ETS particulars and any labor reshuffling as a result, but contractors can count on a few other things.

“You will see increased OSHA enforcement,” Vorys’ Billington said flatly.

OSHA’s own enforcement manpower may be small compared to the scale of the upcoming ETS. Its staffing may or may not get a boost in coming weeks. Regardless, coming OSHA workplace visits will be fueled not by a wave of inspectors but by who reaches out to OSHA.

“It’s going to be your vaccinated employees who make that call to OSHA” in the first place, he said, if and when they don’t feel like adequate workplace measures are being taken.

Moreover, Billington reminds employers that “if OSHA comes walking in, they’re not going to be laser-focused” on one narrow issue once they’ve made the trip.

“They’re going to be looking around.”

Something like strict enforcement of a mask requirement may or may not be a big deal on its own, as long as things are going fairly well. But if other precautions are slack, then that becomes “something that OSHA would take into account, certainly if you have outbreaks,” Billington cautioned. “You have to meet the duty of safety clause” in the bigger picture.

Contractors should also prepare for a requirement to provide employees with paid time off to get vaccinated and, when needed, to recover from any side effects or adverse reactions. However, as ACCA’s Chris Czarnecki recently reminded members, paid leave can be reimbursed using previously available COVID-19 tax credits.

The final ETS will also certainly include accommodations for religious and medical special circumstances. That could alleviate some labor pushback but would also add a layer of administration for owners.

See You in Court

One other thing is for sure, and it may render the rest of this discussion moot. Once the ETS makes its official debut as an OSHA document, its next stop will be in a courtroom.

“The governor of South Carolina recently said that he will fight this to the gates of hell,” James noted. A dozen Republican governors and counting are already on record as favoring litigation against the ETS, which “will make this more of a politically charged issue for employers,” said James.

The OSHA ETS provision is reserved for extreme circumstances by all accounts. In fact, until the pandemic, the most recent ETS was in 1983.

But also noteworthy is the frequency of successful court challenges against ETS. Five of the last nine ETS have been removed, including that 1983 standard, which had to do with asbestos. A few previous ETS issued in the 1970s sought to address issues such as multiple carcinogens and a class of pesticides, but those were also negated in court.

Opinion is divided about the chances of the most recent ETS. Given the distinct nature of the COVID threat as compared to earlier ETS targets, and the ongoing Delta-driven toll on health and the economy, it may stand a better chance than its predecessors.

Either way, Billington advised his HR-oriented audience, “There will continue to be efforts from the federal level to increase vaccination rates. If you haven’t sat down with company leadership and had a brain trust meeting to say ‘What are we gonna do here?’ then you really should.”