Authors: Nancy Farnam, Ezaque Lopes, Rebecca Starr, LeAnne Stefl


As pandemic-related restrictions eased at the start of summer, employers glimpsed a more open economy, and many initiated next steps for welcoming employees back to the workplace. However, with the Delta variant's arrival and a spike in positive cases, plans were foiled for a return to normal. Progress may have stalled for now, but if nothing else, change management skills are only getting stronger.

Most employers have shared public health recommendations and complied with government mandates. Their initial efforts, aimed at minimizing rates of serious illness, hospitalization and death, focused on educating employees and encouraging them to get vaccinated. But with infection rates and pandemic-related burnout on the rise, this objective and the ways of meeting it have broadened. Many employers are adopting or considering new policies for protecting the health of their employees and their business.

Changing requirements caused by a changing virus

Nearly all employers encourage vaccination (68%), and appropriate masking and other safety protocols (55%). While the Delta variant is not delaying return-to-workplace plans for most (74%), there's an uptick in mandating vaccination for onsite workers (17%), as well as requiring documented proof of vaccination or a negative COVID test within 24 hours prior to entering the workplace (9%). Beyond observing state or provincial, regional and local mask mandates, more employers require all employees to comply (52%) than restrict masking rules to only the unvaccinated (14%).1

Some employers are also considering health plan surcharges. For example, beginning November 1, one airline is applying a $200-per-month surcharge to unvaccinated workers on the company's insurance plan. This is seen as a necessary move to address financial risk created by the decision to not vaccinate.2

Proper handling of legal and compliance matters related to mandates and other requirements is tricky. Workplace policies must be clearly written and conform to all applicable laws. To ensure they meet standards, it's helpful for employers to explore implications and seek specific guidance from governing bodies.

While employers are entitled to ask about vaccination status, those that decide to keep a record must uphold worker privacy rights. That means observing all protocols for information storage, protection and destruction.

Unvaccinated employees whose decisions are medically based, as well as those protected by human rights legislation for other reasons such as religious beliefs, are legally guaranteed the opportunity for formal accommodations.

In response, employer accommodations take the form of remote work (17%); adjustments to roles, responsibilities or both (6%); and unpaid leave (5%). Fifty-six percent (56%) don't currently offer these workarounds, and 26% have not yet decided on an approach.1

Weighing the attraction and retention impact of mandates

Mandating vaccination will likely encounter resistance from some employees, and employers need a plan for consistently and respectfully addressing pushback. In this competitive labor market, leadership may be concerned about the potential of mandates to increase turnover or impact hiring.

Staffing concerns are valid, but this dilemma actually poses dual risks that are potentially offsetting. Some employees may leave due to a vaccination mandate while others will exit over safety concerns — the second outcome may help mitigate the first. If appropriately positioned as essential to a safe and productive business environment, this requirement will attract talent who accept and support it. But when mandates are not a cultural fit, recruiting and hiring will likely become more difficult.

Regardless of their approach, all employers benefit from keeping employees updated on the measures they're taking. Communication about vaccination polices and plans can be strategically designed to encourage open dialogue and respect for multiple perspectives. Giving a cross-functional team a say in developing policy details, and involving them in plan implementation, often promotes adherence.

With new information about COVID-19 signaling caution, mandates and incentives will likely extend to necessary vaccine boosters. Synergistically, this would coincide with the U.S. Federal Drug Administration's recent approval of the Pfizer-BioNTech vaccine, which is expected to prompt more organizations to establish stricter vaccination requirements. Efforts by employers to educate employees about the rigorous standards that now apply to this sanctioned drug are instrumental for optimal acceptance and compliance.

Most Common Organizational Approaches to Dealing with COVID-191:

  1. Encourage vaccination
  2. Encourage masking and other safety protocols
  3. Mandate masking for all

An emphasis on enticement over enforcement

Apart from mandates, many employers encourage vaccination through incentives. Almost half (49%) provide time off to receive the vaccine, and 10% use financial incentives. Typically, amounts are $100–$249 (46%), but ranges of $50–$99 (22%) and $250 or more (29%) are also common. Just 3% offer less than $50.1

It's important that incentives closely follow legislative guidelines and are not coercive. The Equal Employment Opportunity Commission has not specified a limit for the amount of an incentive, but advises that it should not be "so substantial as to be coercive" if the vaccine is administered by the employer or an agent of the employer.3

Shifting to hybrid or remote work arrangements is a matter of public health, not just a convenience. This monumental change is a necessary response to the pandemic — it meets the continued need for social distancing and other measures that help protect the safety and wellbeing of employees. And while underlying policies and practices show an abundance of caution, they also express an abundance of care. Legally required and voluntarily provided alternative workplace options support those who cannot be vaccinated or choose not to do so.

Experience with a new way of working has not only increased employees' preference for remote options, but also employers' customization of hybrid approaches.

Eighteen percent (18%) allow employees to make their own schedules, 23% are establishing a new work philosophy, and 26% train managers on how to manage differently. Notably, 33% require employees to work onsite for part of the week.1

Approaching caregiving needs with extra care

Pandemic-related leaves are a continuing reality. While many employees can work at home during quarantines and periods of illness, time for caregiving or recovery may still be necessary.

Employees with children under 12 who aren't yet eligible for a shot may need more leeway in allocating time off to caregiving, especially if unexpected events occur like daycare closures and school-stipulated quarantines related to COVID-19. Though employers tend to offer employee caregivers leave on either an unpaid (32%) or partially paid (21%) basis, fully paid leave (26%) currently provides an added measure of support and relief.1

Clear guidance for nuanced decisions

Adequately protecting employee safety and organizational health from pandemic risks calls for a multi-layered approach. A key focus is balancing the tension between two sets of priorities: the safety of employees and the business, and respect for personal choice. Effective vaccination strategies are formulated around clear policies that comply with legal and regulatory requirements, and align with the organization's culture and goals.

Consistency is a core guiding principle related to vaccination mandates and incentives, and employers get the best results when they apply and administer them fairly. Beyond interventions that promote safety and health, motivational communications and other ways of educating employees can also drive progress.

This article is part of the 2021 Q4 Gallagher Better WorksSM Insights Report: Building a Better Employee Experience that explores longer-term strategies centered on paid time off, mental health resources and hybrid work environments, as well as trending approaches for more immediate challenges like vaccination mandates and incentives.

Access the full report


1Gallagher, "Workforce Trends Pulse Survey #3," October 2021

2USA TODAY, "Delta Air Lines to charge $200 monthly to workers who refuse COVID-19 vaccines," August 2021

3Bloomberg Law, "EEOC Allows Covid-19 Vaccination Incentives: What to Know," July 2021

Author Information:

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Ezaque Lopes

National Head of Practices, Canada

  • Toronto, Ontario


Consulting and insurance brokerage services to be provided by Gallagher Benefit Services, Inc. and/or its affiliate Gallagher Benefit Services (Canada) Group Inc. Gallagher Benefit Services, Inc. is a licensed insurance agency that does business in California as "Gallagher Benefit Services of California Insurance Services" and in Massachusetts as "Gallagher Benefit Insurance Services." Neither Arthur J. Gallagher & Co., nor its affiliates provide accounting, legal or tax advice.