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Wage and Hour Considerations For COVID-19 Testing Mandates

Now that the Pfizer vaccine has received full FDA approval, there is a lot of talk among employers about whether or not to require employees to get vaccinated.

As an alternative to, or for use in conjunction with, a mandatory vaccine policy, employers are also thinking about implementing regular mandatory COVID-19 testing for employees (where not already mandated for their specific industry). While employers can mandate regular COVID-19 testing when permitted by current rules, employers should also be thinking about wage and hour implications when making such a requirement.

There are two main wage and hour issues that come with mandatory COVID-19 testing:

  1. Is the time employees spend getting tested compensable under the Fair Labor Standards Act (FLSA) when an employer mandates COVID-19 testing?
  2. Does the employer need to cover the cost of the COVID test?

The answer to the first question is most likely – yes. The answer to the second question is – it depends.

Employee Hours Worked

Federal regulations state that time spent by employees waiting for and receiving medical attention on the premises or at the direction of the employer during employees' normal working hours on days when they are working constitutes hours worked. Courts have interpreted this rule to include compensation for mandatory testing even if the employer requires that it occur after the employee's normal working hours. The U.S. Department of Labor (DOL) adds another layer, stating that undergoing COVID-19 testing outside of working hours may be compensable where the testing is necessary for employees to perform their jobs safely and effectively during the pandemic. Where almost every county in the country is currently designated as having a high community COVID-19 transmission rate, the need may be justified in most work environments. Many states have similar requirements on the grounds that an employer must pay for all employee time spent while under the employer's control or at the direction of the employer.

If employers require employees to undergo regular COVID-19 testing, they likely need to pay for the time employees spend traveling for and receiving a test. When that is the case, one way to avoid potential overtime costs would be to require that employees undergo testing during regular working hours. Employees should coordinate with their supervisor for when they may be absent for this purpose.

Employee Expense Reimbursement

The cost of testing may impact an employer's FLSA obligations. Specifically, when employers fail to reimburse employees for expenses considered primarily for the benefit or convenience of the employer, the FLSA considers this an impermissible wage deduction to the extent it reduces the employee's protected wages. Employer COVID-19 testing mandates will likely be seen as primarily for the benefit of the employer to minimize workforce disruptions and comply with workplace safety requirements, particularly in light of current transmission rates. Employers should review their payroll process in connection with FLSA compliance.

The Equal Employment Opportunity Commission (EEOC) has also provided guidance under the Americans with Disabilities Act (ADA) for medical examinations, specifically in the COVID-19 context. A key point to keep in mind is that when an employer requires an employee to go to a health professional of the employer's choice, the employer must pay all costs associated with the visit(s). This may occur where an employer requires testing at a designated site or provides on-site testing.

Additionally, several states, like California, specifically require employers to reimburse the cost of mandatory COVID-19 testing, including reimbursement of mileage driving to and from the testing site. Employers should check the laws in their states of operation to verify their obligations.

To minimize the impact of expense reimbursements, employers should consider providing employees with a list of free testing sites in their local area. Note that periodic testing may not be covered by health insurance plans where there are no accompanying symptoms or exposure. As with all things COVID-19, guidance on these issues may change as circumstances surrounding the pandemic change. Continue to look for updates on this topic.