By Sourcing Journal
This article was published in Sourcing Journal February 18, 2022.
January saw the reversal of the Biden administration’s federal vaccine and testing mandate, placing U.S. businesses in the driver’s seat when it comes to creating—and enforcing—their own rules.
The Occupational Safety and Health Administration (OSHA)’s now-defunct Emergency Temporary Standard set ground rules for roughly 84 million workers across the country, requiring businesses with workforces of 100 or more to ensure their ranks were fully vaccinated against Covid-19, or that they were submitted to weekly testing. Now, that’s over—and companies have been left to make their own judgments about workplace safety.
Nike, Walmart, Columbia Sportswear, TJX and Vans and Supreme owner VF Corp laid out their terms months ago, telling staff that the choice was theirs: get the vaccine, or give up your job. In January, the layoff notifications began to roll out, bringing the figurative consequences of non-compliance into the harsh light of reality.
Many corporations eager to emerge from an era of economic uncertainty initially complied willingly with the terms laid out in the ETS. But retail has concurrently faced another endemic challenge: a shortage of workers.
The retail unemployment rate stands at 5.2 percent as of January, according to the U.S. Bureau of Labor Statistics (BLS)—a far fall from peak pandemic joblessness numbers, which reached highs of more than 18 percent in April 2020. But the sector is still struggling to fill 881,000 open roles across brick-and-mortar and non-store retail—199,000 more vacancies than December 2020, and 250,000 more than the same period in 2019.
The question of whether to require vaccination has taken on a new and unforeseen weight amid the dearth of applicants for retail jobs. Even the Nikes and TJXs of the world, which took strong public stances on the importance of inoculation, only mandated that corporate employees get the jab. Store associates and others throughout the supply chain are not subject to the same requirements, despite the fact that many of those roles are consumer-facing and stand to have a more direct impact on public health.
Some corporations have changed course as a matter of necessity. Starbucks became the most recent high-profile player to reverse its initial decision to require vaccination across its workforce, dropping the mandate in January after the Supreme Court’s ruling. The company’s on-site job board currently lists about 17,800 open retail positions across the country.
But others are doubling down. Dearborn, Mich.-based workwear brand Carhartt has held the line on its company-wide vaccination policy following the ETS repeal. In January, CEO Mark Valade sent an all-staff email to 3,000 employees across Carhartt’s corporate offices, retail locations, distribution centers and manufacturing facilities noting that the company’s requirement would remain in place. The correspondence was quickly screenshotted and circulated online, sparking calls to boycott the brand.
“Carhartt made the decision to implement its own vaccine mandate as part of our long-standing commitment to workplace safety,” a spokesperson told Sourcing Journal. “Our recent communication to employees was to reinforce that the Supreme Court ruling does not affect the mandate we put in place.”
The vast majority of Carhartt employees are fully or partially vaccinated, and the company has also granted a number of accommodation requests for medical or religious exemption, the spokesperson added. The company “fully understands and respects the varying opinions on this topic, and we are aware some of our associates do not support this policy,” the spokesperson said. “However, we stand behind our decision because we believe vaccines are necessary to protect our workforce.”
The company’s actions align with President Joe Biden’s entreaty that corporations “do the right thing” in light of the Supreme Court’s decision, by maintaining or implementing their own vaccine policies in the absence of a federal mandate. “The Court has ruled that my administration cannot use the authority granted to it by Congress to require this measure, but that does not stop me from using my voice as President,” he said on Jan. 13. “I call on business leaders to immediately join those who have already stepped up—including one third of Fortune 100 companies—and institute vaccination requirements to protect their workers, customers, and communities.”
The National Retail Federation (NRF), of which Carhartt is a member, took a different tone, with president of government relations David French calling the rollback of the ETS “a significant victory for employers.” The trade group, along with other industry advocacy organizations, told the Supreme Court that the Biden administration should “work with employers, employees and public health experts on practical ways to increase vaccination rates,” rather than force vaccines on workers.
“There’s no real, set way that all of our members are handling this,” NRF vice president of government relations and workforce development Edwin Egee told Sourcing Journal—but Carhartt’s hard-line strategy is far from the norm.
Implementing a vaccine mandate is a significant undertaking, as employers must do so within Equal Employment Opportunity Commission (EEOC) guidelines, painstakingly reviewing each request for medical or religious exemption, he said. It’s a time-consuming, labor-intensive process for some corporations—especially the larger ones—which might receive “dozens upon dozens” of requests.
“It’s a pretty high bar to clear, for our members who want to [implement a vaccine mandate],” he said, and only a small number of them have attempted it, even at a corporate level. “It’s an administrative struggle to make sure you do it correctly.”
A brand or retailer’s propensity to implement a vaccine mandate also “comes down to the nature of their particular workplace,” Egee said. Members have chosen “to treat some groups of employees differently than others”—requiring corporate office personnel to get vaccinated, for example, because they experience “prolonged exposure” to coworkers and are often unable to socially distance. By contrast, masked interactions between store associates and consumers are typically shorter.
Many NRF members have taken to offering cash incentives to employees who have not yet been vaccinated, Egee added. “I would say anecdotally talking to my members, it’s usually around 10 percent who make the move” to receive inoculations because of the payout. The ongoing workforce shortage is a “huge driver” behind the incentive strategy, he said, noting that the labor gap “really hinders our ability to implement mandates even where we want to.”
NRF’s conversations with members have revealed that very few employees are unwilling to take the cash in exchange for compliance. With most workers swayed by a couple hundred dollars, companies are now viewing incentives as the path of least resistance, Egee said.
The labor shortage has indeed given workers an upper hand in leveraging their demands, according to Dr. Michael Urban, senior lecturer and director of the Doctorate of Occupational Therapy program at the University of New Haven. The phenomenon known as the Great Resignation has seen hordes of employees leave their posts in search of better wages and more flexible schedules—as well as to mitigate their risk of contracting Covid-19.
“People also started saying, ‘I don’t I don’t have to define myself by my work anymore,’” Urban added. The pandemic came to represent a reset for some U.S. workers, who started to view their jobs simply as the source of a paycheck rather than a part of their identity. This cultural shift has made it more difficult for retailers and brands to attract talent for traditionally low-paying positions at stores and distribution centers. Adding another barrier to entry, like vaccination, feels like playing with fire, Urban said.
Vaccine mandates are primarily impacting “corporate America,” not “frontline staff” tasked with making sales. “It’s not being required for most companies, because they need to keep the doors open and make money,” he said. “And that’s the message that’s being sent.”
Urban believes that for national retailers, the idea of widespread vaccine enforcement is daunting. Sentiments about inoculation vary across the U.S., often across political lines. While a company might not have an issue coaxing employees in one part of the country to comply, the issue could prove contentious in another. Creating differing regional policies would undoubtedly cause friction, and could spur outcry from unions, he said.
Notably, the stipulations laid out in the ETS placed responsibility squarely on the shoulders of these larger enterprises. While many members of the retail and business community have voiced their support for Covid-19 vaccination, saddling companies with more employees with greater obligations may have ultimately hurt the program, turning off influential retail trade groups, Urban said. “I think we might have seen a different outcome had they mandated the same rules for all companies, regardless of size,” he added.
Instead, the policy created arbitrary inequities between retailers of different sizes. “It penalized larger companies while rewarding smaller ones based on number of employees, which really has nothing to do with the job that they’re doing or the health and safety of the nation,” Urban said.
Whether the absence of a country-wide vaccine mandate will bridge the labor gap is largely yet to be seen, but BLS data from the first week of February showed that retail trade employment rose by 61,000 workers during the first month of the year. What’s more, 29,000 of those roles were in stores.
And while the federal government’s influence on the issue appears to be waning, more than a dozen states have attempted to boost vaccination rates by offering residents incentives from cash to gift cards and lottery tickets.
Half of the states in the U.S. have also committed to raising their minimum wages, with 20 of those increases already in effect as of Jan. 1. The largest wage hikes will take place in Virginia ($1.50) and Delaware ($1.25). Connecticut, Florida, Illinois, New Jersey, and New Mexico will raise their rates by $1 per hour. California will do the same on July 1, becoming the first state to reach a $15 minimum wage in the U.S.
The confluence of wage increases and Omicron’s slowing spread could spur a significant return to work. According to the Centers for Disease Control and Prevention, new cases have fallen since a high of 895,724 on Jan. 13 to 73,625 on Feb. 6. Should the trend continue, Urban said he believes employers will back off on talk of vaccines and boosters, and focus more on containing spread through testing.
“They may just start telling people, ‘If you’re feeling sick, stay home,’” he said. “I think that will be the approach—that is what [employers] are evolving towards, and it just becomes a part of everyday life.”