FDA Vaccine Approval Prompts New Mandates in Banking

With the Food and Drug Administration approving the first coronavirus vaccine, will financial institutions opt for mandates with employee options or implement all-out vaccine mandates? Either way, the cost of implementing and monitoring is high, and the risk of losing valuable employees could be higher.

With the approval of the Pfizer vaccine by the Food and Drug Administration, and the continued spread of the delta coronavirus variant, governments, schools and an increasing number of businesses (including financial institutions) are turning to mandates to get people back to work. The number mandating shots is certain to grow much higher. The question is, could this strategy backfire?

While governments and many hospitals, as well as retailers and restaurants, had already made moves to require inoculations of employees, FDA approval removed a major barrier for financial institutions that did not want to make a unilateral decision without the government assurance that the vaccine was safe and effective. Once FDA announced its approval, many of the largest employers in and out of the financial services industry acted quickly.

A survey by Littler Mendelson, the world’s largest employment and labor law practice, found that 63% of employers are encouraging, but not requiring, vaccination. That said, nearly half of respondents (46%) said they are more strongly considering a vaccine mandate in light of the recent rise in COVID-19 cases, with 9% of employers already mandating vaccines for at least some of their workers, and an additional 12% planning to impose some sort of mandate in the near future. Only 22% said they have firmly decided not to institute a mandate.

Vaccine Mandates Can Vary Significantly

Given the highly charged discussions around masks, vaccines and mandates, there are a multitude of definitions of what a mandate policy might entail. In the most extreme instances, financial institutions and organizations that provide services to financial institutions define their policy very clearly … saying that workers will be terminated if they refuse to be vaccinated. While these organizations still must abide by laws that protect employees covered by the Americans with Disabilities Act of 1990, and those citing religious grounds, there are few exemptions with these stringent mandate policies that are gaining steam with the recent FDA ruling.

Mandates are Legal:

The Equal Employment Opportunity Commission has clarified that workplace vaccine mandates are legal, but offering other options could help limit employee pushback.

Some financial institutions have taken a softer approach, implementing a hybrid model that may offer frequent testing as a condition for returning to in-person/on-site work, or requiring all remote and in-person workers to either be fully vaccinated or regularly tested – otherwise they will be terminated. Some organizations, such as Delta Airlines has announced a policy of “be vaccinated or pay $200/month health insurance surcharge.”

The decision as to which option to choose is based on a number of factors according to Littler, such as:

  • The current vaccination rate of workers
  • Workplace sentiment
  • Ability to remove obstacles to receiving vaccinations
  • Industry trends regarding vaccine mandates
  • Public safety and health considerations
  • Geographic variations regarding infection rates

Businesses also need to monitor state legislation and executive orders. Some states have sought to limit mandate requirements with bans on vaccine mandates or so-called vaccine passports.

In the end, organizations using a hybrid approach risk outbreaks in the workplace or clients being infected. Those mandating shots risk losing valuable employees in a tight job market. Adding confusion to the decision, a recent poll found that four in ten employees would quit if their employer didn’t mandate vaccines.

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Financial Institutions are Jumping on Mandate Bandwagon

Vaccine mandates are becoming more and more common since the FDA approved the Pfizer vaccine. Beyond government and healthcare workers, some of the largest corporations in the U.S. are implementing some form of vaccine mandates. 19 states and the nation’s capital are already requiring at least some workers to be vaccinated or undergo regular testing. Close to 1,000 universities (and growing) are already requiring vaccines for in-person learning.

In financial services, Goldman Sachs instituted a requirement that all individuals who enter the bank’s offices, including employees and guests, be vaccinated starting Sept. 7, according to a memo obtained by The New York Times. In addition, Citigroup Inc announced on Aug. 11 that employees will need to get vaccinated before returning to its offices, according to a LinkedIn post from Sara Wechter, the bank’s head of human resources. Morgan Stanley also announced requirements that staff entering their New York headquarters must be vaccinated. JPMorgan Chase & Co has not announced a mandate yet, but requires unvaccinated workers to wear masks and get tested at least weekly.

Among the other top banks, Bank of America will only allow vaccinated staff to return to its offices in early September, while encouraging other employees to get inoculated, according to Reuters. Wells Fargo & Co has not yet announced a mandate policy, but has pushed back its return to office start date to October.

Wait and See:

With momentum around stricter vaccine mandates is building, most regional banks and credit unions are gauging reaction to early movers to determine best next steps.

Beyond New York and the biggest banks, mandates in banking have also be driven by geographic infection rates. For instance, many banks in Hawaii, including First Hawaiian Bank, Bank of Hawaii, American Savings Band and Territorial Savings Bank are requiring vaccines for all employees.

Canada’s five biggest banks are also mandating that employees working from their offices must show proof of vaccination to enter their premises this fall, according to Reuters. Employees of Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD), Bank of Montreal (BMO) and Canadian Imperial Bank of Commerce (CIBC) were notified they must be vaccinated by the end of October. No specific date was mentioned by Bank of Nova Scotia (Scotiabank).

Finally, in calls to other major financial institutions, the vast majority said they have not decided what will be required from a vaccine perspective. Many mentioned a belief that the vast majority of their employees are already vaccinated, but they are evaluating options. In calls to some of the major solution providers in the financial services industry, the responses to our inquiries were very similar – with most stating that a final policy has not been determined. While strong encouragement and mask mandates may be today’s policy, it seems clear that with the FDA green light, the trend toward a tougher mandate policy in most likely.

Potential Mandate Repercussions Decreasing

Maintaining a safe workplace remains a top priority for every financial institution, but the questions remains as to whether mandates are the best way to achieve this goal? According to the research by Littler, “The top two concerns about mandating vaccination are the same as they were in January, namely resistance from employees who are not in a protected category but refuse to be vaccinated (75%) and the impact of a mandate on company culture and employee morale (68%).” Not surprisingly, 60% of employers fear the possible loss of staff and difficulty operating if there are significant terminations or resignations due to the mandates.

One counter to the potential of resignations or hesitancy to comply with mandates is that more job openings state a requirement to be vaccinated as a condition of employment. This trend will obviously escalate with the recent FDA vaccine approval. In fact, even before the approval, the career-advice website Ladders Inc. released a study showing a 5,000% increase in job openings that require applicants to be vaccinated since last January.

Those individuals using the argument of personal liberty to get vaccinated will increasingly have more challenges to get alternative employment opportunities. Even when an alternative is found, that firm may mandate vaccinations in the future.

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