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Why Does the OSHA Rule on Workplace Vaccines Only Apply to Businesses with 100 or More Employees?

  • OSHA rule on COVID-19 vaccine requirements in the workplace applies to companies with 100 or more employees
  • A look at why OSHA set the threshold at this level
  • How to determine if your company is subject to this requirement based on its payroll

Summary by Dirk Langeveld

Some employers are finding themselves in an awkward situation regarding the COVID-19 vaccine mandate for workplaces recently released by the Occupational Safety and Health Administration. While the emergency temporary standard only applies to companies with 100 or more employees, some businesses will hit this threshold if they expand or if their payroll swells with seasonal workers.

The 490-page document accompanying the standard offers further details and guidance on how the rule applies to unusual or uncertain circumstances. However, the 100-employee benchmark has also been criticized as arbitrary, and some legal challenges are looking to overturn the standard based in part on this argument.

Government rules have used varying size standards when determining which companies must comply with certain regulations or qualify as small businesses. For example, the U.S. Small Business Administration defines a small business as any firm employing fewer than 500 employees, with certain exceptions. The Affordable Care Act applied to companies with 50 or more employees, and some businesses even cut their staff so they wouldn’t be required to comply with the legislation.

The New York Times recently looked at the challenges facing businesses that fall just short of 100 employees. Some of these employers are considering whether to delay expansion plans so they don’t cross the threshold.

So how did OSHA come to the determination that the vaccine mandate should apply to companies with 100 or more employees? And what factors go into determining whether a company hits this level?

How OSHA set the 100-employee threshold

In setting the rule to cover employers with at least 100 employees, OSHA determined that it applies to 263,879 entities and 1.86 million establishments, covering over 84 million employees. This covers 67 percent of the workforce in the United States.

The emergency temporary standard states that OSHA also considered setting the limit at either 150 employees or 50 employees. It opted against the former because it would not cover as many workers, dropping to only 63 percent of the workforce. It decided against the latter because it would require an additional feasibility analysis.

The main reason for setting the threshold at 100 employees was the determination that these companies would have the administrative capacity necessary to implement the standard. These include steps such as maintaining a roster of employees’ vaccination statuses, requiring unvaccinated workers to wear a face covering when in a physical workplace with others, and requiring employees to be vaccinated or test weekly for COVID-19 starting on Jan. 4.

OSHA also determined that employers with at least 100 employees account for two-thirds of the workplace, cover larger facilities where deadlier outbreaks are more likely to occur, and that the size standard is “comparable with the size thresholds established by congressional and agency decisions in analogous contexts.”

Determining if your company hits this limit

The main consideration in determining whether a company has 100 or more employees is its total payroll, regardless of factors such as employees’ vaccination status, the number of remote workers, and employees exempted from the rule’s requirements. A company is subject to the rule if it has at least 100 employees at “any time the standard is in effect.”

The count is based on all employees across all locations in the United States, encompassing part-time workers but not independent contractors. For example, a business with several locations and less than 100 workers at each site still qualifies if the company’s total number of employees exceeds 100.

The rule also aims to cover workplaces with fluctuating employee totals, such as seasonal businesses, reasoning that companies with 100 or more employees at any time will have the administrative capacity to implement the rule. The standard states that a company is subject to the mandate for the duration of the standard as soon as its payroll increases to 100 workers, even if the number of employees drops below this point later on.

The mandate also addresses specific issues involving franchises, staffing agencies, and multi-employer worksites. In traditional franchisor-franchisee relationships where franchises are independently owned, the franchisor and franchisee are considered separate entities. As such, the franchisor only tabulates its corporate employees while franchisees only count employees of the individual franchise.

When an employer uses workers supplied by a staffing agency, it only counts its own employees while the staffing agency counts the jointly employed workers to determine if it meets the 100-employee threshold. The employer is still subject to the rules if its permanent workforce has 100 or more employees.

Multi-employer worksites such as construction sites or office buildings with multiple companies sharing the building are only subject to the rule if their own business has 100 or more employees, not if the site itself has more than 100 people present. However, companies must still count their total number of employees regardless of where they are working on a particular day. For example, a construction company with more than 100 workers on multiple sites would qualify.

A mandate for smaller companies?

The Labor Department has said the 100-employee threshold could potentially be lowered based on further assessment of the issue. The vast majority of small businesses are individual enterprises that do not employ anyone else. According to recent data from the U.S. Small Business Administration, there are 32.5 million small businesses in the United States, including about 6 million firms employing 61 million people – 46.8 percent of private sector positions.

The emergency temporary standard says it will pose a variety of questions to smaller employers to determine whether to lower the employee threshold, including:

  • Have you instituted vaccination mandates (with or without alternatives), or requirements for regular COVID-19 testing or face covering use?
  • What have been the benefits of your approach?
  • What challenges have you had or could you foresee in implementing such programs?
  • Is there anything specific to your industry, or the size of your business, that poses particular obstacles in implementing the requirements in this standard?
  • How much time would it take, what types of costs would you incur, and how much would it cost for you to implement such requirements?

Several companies, including small businesses, have opted to introduce their own mandates, and a poll from the group Small Business for America’s Future found 68 percent of respondents in favor of such mandates. Conversely, the National Federation of Independent Business, a small business advocacy group, recently joined those filing legal challenges to the mandate, charging that it “restricts the freedom small business owners depend on to run their businesses and is a clear example of administrative overreach.”

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