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US employers change stance on vaccine mandates owing to Delta variant

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Most of Houston Methodist’s 25,000 workers complied when chief executive Marc Boom demanded in March that all of his hospital network’s staff be vaccinated against Covid-19. Yet 178 refused, and scores of them sued for unfair discrimination after Houston Methodist fired them. 

A district judge ruled that the company had acted reasonably, as it is in the business of saving vulnerable patients’ lives. But the fear of a backlash from employees who distrust Covid-19 vaccines, or question an employer’s right to impose them, made most US companies reluctant to follow Boom’s example. 

That calculation has suddenly changed as big businesses become alarmed that the Delta variant is causing a new wave of outbreaks, putting in peril the US economic recovery and their plans to return to pre-pandemic ways of working. 

In the past two weeks, vaccine mandates have gone from a rarity to a priority on California tech campuses and at the headquarters of Wall Street banks. Companies as large as Google, McDonald’s, Microsoft and Walt Disney are demanding that some or all employees be vaccinated before coming to work, with certain medical and religious exemptions. 

A worker gives a Covid-19 vaccine inside a cubicle at a Walmart in Alabama
Doug McMillon, chief executive of Walmart, said a vaccine requirement at its headquarters was ‘key to driving toward an end to this pandemic’ © Jay Reeves/AP

It is a striking shift. When the Society for Human Resource Management polled members in June, just 11 per cent of HR people planned to insist that their staff be vaccinated. A Morning Consult poll spelt out one reason for their hesitation last week, finding that 18 per cent of employees would quit if their workplace imposed a vaccine or mask mandate.

In a tight labour market, “companies did not want to become uncompetitive,” said Iwan Barankay, a professor at the University of Pennsylvania’s Wharton business school. No executive wanted to be the first to insist on vaccinations, he added, because they feared “the disproportionate wrath of the anti-vaxxers”. 

The new stance by company executives has been encouraged in part by public sector employers bringing in such mandates, said Amber Clayton, director of SHRM’s knowledge centre. 

The US has not followed the example of France in requiring that professions working with vulnerable populations be vaccinated, or the more sweeping “no jab, no job” policy in Saudi Arabia. But the Biden administration said two weeks ago that federal employees must be vaccinated or submit to regular Covid-19 tests. California introduced a similar requirement on Wednesday for its teachers. 

In the private sector, 15 per cent of US companies last week were planning or considering vaccination mandates, up from 4 per cent in May, according to a survey by the law firm Fisher Phillips. The share is likely to have risen since the poll was conducted.

This week, Citigroup introduced a vaccination mandate in several US cities, McDonald’s imposed a mandate on its office staff, and the New York Stock Exchange said its trading floor would be off limits to anyone without proof of vaccination. 

Doug McMillon, chief executive of Walmart, described a requirement that staff in its Arkansas headquarters must be vaccinated as “key to driving toward an end to this pandemic” and “set[ting] the example” for others. United Airlines explained that Scott Kirby, its chief executive, did not want to write any more condolence letters to the families of colleagues who had died of Covid-19. 

But as cruise lines, meatpackers and prison operators follow suit, it represents a sharp break for most companies, who for months had hoped that their staff would opt to be vaccinated without needing to be forced to do so. 

Since vaccines became available in the US, companies have focused on offering incentives to encourage widespread uptake. Starbucks and McDonald’s gave four hours of paid time off to workers getting their shots. Amazon offered $80. Boeing set up mass vaccination sites at its plants. 

Behavioural economists typically believe that such “nudges” are highly effective, said Barankay, but the uptake has disappointed many employers. The reason, his research suggests, is that financial incentives are less effective at changing people’s behaviour when it comes to their health.

For companies impatient to bring staff back to their offices, “it is really expensive to shift gear again”, said Barankay, so their decision to enforce vaccination is “a very calculated” economic choice. “They re-evaluated the business needs and the personal freedom issues, and the business needs prevailed.”

People protest against vaccine mandates outside New York’s City Hall
People protest against vaccine mandates outside New York’s City Hall this week © Michael M. Santiago/Getty

On Wednesday, US president Joe Biden moved to give corporate America a further push in the direction of mandates. At a virtual event with executives including Kirby and Greg Adams, chief executive of the healthcare group Kaiser Permanente, he urged them to encourage peers to follow their lead, saying his government would support those employers who did. 

Jen Psaki, the White House press secretary, rejected the suggestion that working with private business was a “backdoor way” of imposing a vaccine mandate. “It’s a front door way of lifting up private sector companies who are taking steps through carrots and sticks . . . to make sure they’re protecting their workforce,” she said. 

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With the exception of Houston Methodist and CNN, which fired three people who breached its policy by coming to work unvaccinated, corporate America has been more public about the carrots than the sticks. 

But the decision about vaccine mandates has been one of the trickiest facing companies since the pandemic began, according to SHRM’s Clayton. With labour still scarce, she says, “they are facing that decision as to whether or not they’re going to provide some sort of accommodation for [unvaccinated] individuals or terminate them.”

Additional reporting by Nikou Asgari, Claire Bushey, Lauren Fedor, Joshua Franklin, Matthew Rocco and Peter Wells

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