Should Employers Pay for Mandatory COVID-19 Testing?

[Editor's Note: OSHA released an emergency temporary standard on Nov. 4 requiring businesses with at least 100 employees companywide to ensure their employees get vaccinated against the coronavirus or wear a mask and test for COVID-19 on at least a weekly basis. Among other directives, the agency said employers don't need to pay for or provide COVID-19 tests unless they are otherwise required to by state or local laws or in labor union contracts. Additionally, Executive Order 14043 requires most federal employees and contractors to get vaccinated and removes the testing alternative unless it can be provided as a reasonable accommodation for limited exceptions to the order under anti-discrimination laws.]

More employers are requiring their workers to get vaccinated against the coronavirus or submit to regular COVID-19 testing, prompting questions about who pays for testing when workers refuse to get vaccinated.

High transmission rates of the COVID-19 delta variant led many employers—including the federal government, some state governments and large companies—to revise their COVID-19 safety policies. For example, federal employees must be vaccinated or submit to weekly or twice-weekly COVID-19 testing and other workplace safety requirements. California was the first state to announce that health care workers and state employees must follow a similar mandate, and more states and cities recently followed suit.

"This approach, while softer than a hard vaccine mandate, has a lot of unanswered questions and potential risk," noted Brett Coburn, an attorney with Alston & Bird in Atlanta. Do employers have to pay for the tests when employees are given the choice between regular testing or getting vaccinated? Do employers have to pay nonexempt employees for the time spent testing?

"This issue is brand new and developing," said Jim Paul, an attorney with Ogletree Deakins in St. Louis. Employers should check with legal counsel before requiring employees to bear the cost of testing, he said.

Here are some points for employers to consider as they develop their testing policies and practices.

Review Policies and Applicable Laws

When considering the cost of COVID-19 testing, Eric B. Meyer, an attorney with FisherBroyles in Philadelphia, said private-sector employers (and employees with separate health insurance) may want to check with their insurance carriers to see if they cover the cost of testing.

"Otherwise, the U.S. Department of Health and Human Services has this resource listing free testing sites by state," he said.

If regular employment-related testing isn't covered and free testing isn't feasible, employers will need to review the applicable federal, state and local employment laws to determine if they must pay for testing.

Vaccination and COVID-19-testing policies are permissible under federal anti-discrimination laws, so long as they are fairly applied and allow for reasonable accommodations.

The U.S. Equal Employment Opportunity Commission (EEOC) doesn't specifically address the cost of COVID-19 tests, but employers may be required to pay for testing under the agency's guidance. Under the Americans with Disabilities Act, an employer can have a workplace policy that includes "a requirement that an individual shall not pose a direct threat to the health or safety of individuals in the workplace." According to the EEOC, the COVID-19 pandemic meets the direct-threat standard.

In guidance that predates the pandemic, the agency said, "If an employer requires an employee to go to a health care professional of the employer's choice, the employer must pay all costs associated with the visit(s)."

Employers also will need to check the applicable state laws when developing their COVID-19-testing policies. "There are a number of states with statutes that predate COVID-19 that require employers to pay for mandatory medical tests or require that employers reimburse for any such testing," said Samantha Monsees, an attorney with Fisher Phillips in Kansas City, Mo.

Additionally, some states, such as California, require employers to reimburse employees for all necessary business-related expenses. According to the California Department of Industrial Relations, "If the employer requires an employee to obtain a COVID-19 test or vaccination … then the employer must pay for the time it takes for the testing or vaccination, including travel time."

Consider Testing During Work Hours

Under the federal Fair Labor Standards Act, employers must pay nonexempt employees for the time spent undergoing testing during the workday. Employers are required to pay for time spent "waiting for and receiving medical attention at their direction or on their premises during normal working hours," according to the U.S. Department of Labor (DOL). "Other laws may offer greater protections for workers, and employers must comply with all applicable federal, state and local laws."

What if the employer asks employees to take the test on their own time before entering the jobsite? In addition to any state law requirements, employer may still be required to pay for the time under federal law, according to the DOL.

Employers must pay employees for all hours worked. "For many employees, undergoing COVID-19 testing may be compensable because the testing is necessary for them to perform their jobs safely and effectively during the pandemic," the DOL said. "For example, if a grocery store cashier who has significant interaction with the general public is required by her employer to undergo a COVID-19 test on her day off, such time is likely compensable because it is integral and indispensable to her work during the pandemic."

Whether the time to take a test is "working time" and whether employees must get paid for the time probably depends on how much the employer is dictating the "when, where and how" of the testing, Paul said. If an employer allows employees to take their tests anytime and anywhere and says something like: "You simply need to provide proof of a current negative test result," then the time and cost might be appropriately shifted to the employees, he explained.

However, Paul noted, employers may have a harder time administering and enforcing that type of policy compared to simply implementing a process to test all unvaccinated employees onsite at the beginning of each week. 

If testing is done onsite, he said, the employer can ensure it's done properly and on a timely basis and that the employer gets reliable results directly and consistently.

Monsees said it's a best practice to have employees test during work hours. "To avoid disruption, these tests can be done at the beginning or end of an employee's shift or can be performed at the worksite by a testing vendor."

Alternatively, she said, the employer could find a testing location that is close to the worksite and require employees to only test at that particular site. "This will help avoid employees traveling long distances to receive a test and can minimize time during the workday spent getting a test."

[Want to learn more about COVID-19 and workplace safety? Join us at the SHRM Annual Conference & Expo 2021, taking place Sept. 9-12 in Las Vegas and virtually.]