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  • December 16, 2021

    Federal COVID-19 Regulations Impacting Wisconsin Construction Firms

    Wisconsin construction contractors may soon need to comply with two different federal regulations aimed at combating COVID-19. Patrick Whiting summarizes the two new sets of rules affecting contractors with 100 or more employees and contractors entering federal contracts.

    Patrick Whiting

    On Sept. 9, President Joe Biden announced his administration’s “Path Out of the Pandemic: COVID-19 Action Plan.” Among the Action Plan’s several prongs are two sets of requirements that could significantly impact numerous Wisconsin construction contractors. The first requires the Occupational Safety and Health Administration (OSHA) to promulgate COVID-19 rules covering employers with 100 or more employees, which it did on Nov. 4. The second requires federal contractors working on certain contracts to require full vaccination of many of their employees.

    The status of both sets of requirements is in legal limbo at the time of this publication, however. On Nov. 6, 2021, the Fifth Circuit Court of Appeals stayed the Occupational Safety and Health Administration’s (OSHA) Emergency Temporary Standard (ETS) for employers with 100 or more employees. A consolidated action to uphold or lift the Fifth Circuit’s order will soon be heard by the Sixth Circuit Court of Appeals, and the matter may ultimately be considered by the U.S. Supreme Court.

    In the meantime, OSHA announced that it has suspended activities related to enforcement. This article discusses the ETS as if it will withstand judicial scrutiny and be enforceable by OSHA.

    Meanwhile, on Dec. 7, the U.S. District Court for the Southern District of Georgia ordered a nationwide injunction of Executive Order 14042, temporarily suspending requirements concerning vaccination, masking, social distancing for federal contractors, as well as the executive order’s implanting guidance. Further litigation related to Executive Order 14042 is certain.

    This post examines the two sets of requirements as if both are ultimately held to be legally enforceable.

    OSHA Requirements for Employers with 100 or More Employees

    After President Biden first announced the Action Plan in September, its most talked-about and far-reaching component promised to be OSHA’s development of rules that would require all employers with 100 or more employees to either require full vaccination of their workforces or require unvaccinated workers to regularly produce negative COVID-19 test results and wear masks on jobsites as conditions of employment. After nearly two months of waiting, OSHA finally issued the new Emergency Temporary Standard (ETS) on Nov. 4. (As noted above, the ETS has been stayed. For purposes of this article, we evaluate the ETS as if it will ultimately withstand judicial review.)

    Patrick Whiting Patrick Whiting, Minnesota 2006, is the corporate counsel at Kraemer North America, in Plain.

    ​The ETS does just what was promised: It requires covered employers (i.e., employers with 100 or more employees) to develop, implement, and enforce a mandatory COVID-19 vaccination policy, or to adopt a policy requiring employees to make the choice of getting vaccinated or undergoing at-least-weekly COVID-19 testing and wearing a face covering at work.

    As noted in a White House Fact Sheet dated Nov. 4, 2021, employers must begin complying with most of the ETS’s requirements – including the requirement that unvaccinated workers wear masks while at work – on Dec. 4, 2021. The ETS requires employers to start testing unvaccinated workers on Jan. 4, 2022, but these deadlines will not be enforced while the ETS is enjoined.

    Covered employers must determine how they will comply with the ETS. If they intend to require full vaccination of their workforce, that approach is relatively simple (though not without its dangers from an employee turnover standpoint). On the other hand, if they intend to allow unvaccinated employees to remain employed so long as they provide negative tests at least once a week and wear safety masks, many more logistics will need to be considered.

    While it is not feasible to address all ETS requirements in this posting, OSHA put together a Frequently Asked Questions website that addresses many concerns. A few items are worth highlighting:

    • The ETS applies in Wisconsin. In those states that have their own OSHA-approved “state plans,” the ETS does not apply unless it is adopted by the state agency. Wisconsin is not one of those states.

    • When determining whether it is covered by the ETS, an employer must count both its full- and part-time employees. Moreover, employers must count employees firm- or company-wide, not just office-by-office or location-by-location. For example, a construction firm with 15 employees working in its office and 85 employees working in the field across various projects would be a covered employer.

    • Covered employers must receive and keep documentation of vaccination from all vaccinated employees. For unvaccinated employees, employers must keep records of each test that the employee provides, both negative and positive.

    • Testing need to be proctored. Employees cannot just show up and tell their employers that they tested negative.

    • The ETS requires employers to give employees up to four hours of paid time to get vaccinated. Additionally, it requires employers to allow employees to use sick time to recuperate after receiving the vaccine, if necessary.

    • The ETS does not, however, require employers to pay for employees’ testing (i.e., the test kits) or to compensate the employees for time spent getting tested. That said, employers may still be subject to other requirements – such as under collective bargaining agreements – that would require such compensation. Moreover, Wis. Stat. section 103.37 prohibits employers from requiring employees or applicants to pay the cost of medical examinations required by the employer as a “condition of employment.” Employers will need to evaluate whether the testing is truly such a “condition of employment,” when employees have the choice to avoid testing entirely by getting vaccinated.

    • The ETS requires that employees must be tested even if they would otherwise be entitled to a reasonable accommodation due to a disability or sincerely held religious belief that prevents them from being vaccinated. It is a safe bet, however, that some employees will contend that they are entitled to a reasonable accommodation due to a disability or sincerely held religious belief that prevents them from being tested. Employers will need to consult with their employment counsel on how to address this issue.

    • Finally, special attention should be given to the issue of employees who work outdoors, as many construction workers do. The ETS provides that employees who work “exclusively outdoors” are exempt from the mandate. It seems difficult for many employees to meet the definition of working “exclusively outdoors,” however. Specifically, an employee is considered to work exclusively outdoors only if:

      • They work outdoors on all days (i.e., the employee never has an “inside day”);

      • They do not routinely occupy vehicles with other employees as part of their work duties; and

      • Their only use of indoor spaces is de minimis (e.g., occasional visits to an administrative office or the restroom).

      Moreover, the ETS FAQ explicitly provides that “outdoors” “does not include buildings under construction where substantial portions of the structure are in place, such as walls and ceiling elements that would impede the natural flow of fresh air at the worksite.” This seems to exclude employees of many vertical contractors – whose structures generally have walls – from the “exclusively outdoors” exemption.

    Federal Contractor Vaccination Mandate

    Executive Order (EO) 14042, titled “Ensuring Adequate COVID Safety Protocols for Federal Contractors,” applies to contractors that have entered contracts with the federal government. As noted above, enforcement of EO 14042 was enjoined on Dec. 7. For purposes of this article, we evaluate EO 14042’s requirements as if they will ultimately withstand judicial review.

    EO 14042 provides that:

    [e]xecutive departments and agencies … shall, to the extent permitted by law, ensure that contract and contract-like instruments … include a clause that the contractor and any subcontractors (at any tier) shall incorporate into lower-tier subcontracts. This clause shall specify that the contractor or subcontractor shall, for the duration of the contract, comply with all guidance for contractor or subcontractor workplace locations published by the Safer Federal Workforce Task Force ….

    In other words, EO 14042 did not mandate vaccinations itself. Instead, it directed the Safer Federal Workforce Task Force to establish contractual language. This language, once approved by the Direct of the Office of Management and Budget (OMB), would then be required to be inserted into federal contracts and subcontracts.

    The Safer Federal Workforce Taskforce issued a guidance document on Sept. 24 (subsequently updated on Nov. 10), providing that “contracts and contract-like instruments” awarded on or after Nov. 14, 2021, shall require all “covered contractor employees” to be fully vaccinated no later than Jan. 18, 2022. Employees with a disability or sincerely held religious belief that prevents them from being vaccinated may be entitled to a reasonable accommodation from the vaccination requirement.

    The impact of EO 14042’s mandate stems from the sheer breadth of employees to which it applies. A “covered contractor employee,” is defined as

    any full-time or part-time employee of a covered contractor working on or in connection with a covered contract or working at a covered contractor workplace. This includes employees of covered contractors who are not themselves working on or in connection with a covered contract.

    A breakdown of the “covered contractor employee” definition indicates that two large groups of employees are impacted:

    First are employees “working on or in connection with a covered contract.” For a construction firm, this definition would certainly cover all employees on a covered contract jobsite – i.e., the employees in the field working on that project. Moreover, the guidance document’s Q&A section provides that “work performed ‘in connection with’ a covered contract” includes work performed by

    [e]mployees who perform duties necessary to the performance of the covered contract, but who are not directly engaged in performing the specific work called for by the covered contract, such as human resources, billing, and legal review.

    In other words, if an employee’s work involves any sort of contact with the covered contract, the employee is almost certainly considered a “covered contract employee” subject to the mandate.

    The second group of covered contractor employees are employees working at a “covered contractor workplace,” defined as “a location controlled by a covered contractor at which any employee of a covered contractor working on or in connection with a covered contract is likely to be present during the period of performance for a covered contract.”

    This, too, is quite broad, and appears to impact most employees working in the same office or location as the first group above. The guidance document does, however, specify that “a covered contractor workplace does not include a covered contractor employee’s residence.” So, an employee working remotely who is not working on the covered contract may not be subject to the vaccination mandate, depending on the specifics of their situation. However, if the remotely working employee performs any work on a covered contract, the employee is subject to the vaccination mandate.

    A hypothetical scenario demonstrates the sheer breadth of the federal contractor mandate.

    Assume a company, Awesome Construction Firm, has offices in Madison and Milwaukee. Its Madison office is its main headquarters, where the executive, administrative, human resources, and support staffs do their jobs. The Milwaukee office is a smaller, regional office that supports projects that the firm has in the area.

    On Nov. 20, 2021, Awesome Construction Firm is awarded a contract by the federal government to construct a military base in Milwaukee. The contract contains the vaccination mandate language from the guidance document.

    In this scenario, several groups of Awesome Construction Firm’s employees will likely be considered “covered contractor employees” pursuant to EO 14042 and the guidance document. To wit:

    1) All employees working on the Milwaukee jobsite (i.e., all “in-the-field” workers) are covered contractor employees.
    2) All employees at the Madison office that work on or in connection with the contract are covered contractor employees. This group includes employees handling almost any aspect of the contract’s administration – e.g., the executive running the company, the payroll clerk issuing the field workers’ checks, the risk manager procuring the project’s insurance policies, the accounting clerk running the project’s numbers, the in-house attorney reviewing the contract, and the safety professional who visits the site to make sure everyone is safe. In short, if an employee’s work “touches” the contract, then that employee is a “covered contractor employee” subject to the vaccination mandate.
    3) A significant number of other employees at the Madison office are also covered contractor employees. Because the Madison office is a “covered contractor workplace,” any Awesome Construction Firm employees likely to be present during the period of performance for a covered contract by the employees listed in group 2 above, are covered as well. For example, this would include an administrative assistant who nevertheless performs any work on the covered contract himself, but who works near someone who does (e.g., a few doors down).
    4) All employees at the Milwaukee office that work on or in connection with the contract are covered contractor employees. While the Madison location is Awesome Construction Firm’s home office, the Milwaukee office directly supports the firm’s efforts on this project. Accordingly, any employee working on the covered contract is subject to the mandate.
    5) A significant number of other employees at the Milwaukee office are also covered contractor employees, for the same reasons set forth in point 3 above.

    Bear in mind, these are just the Awesome Construction Firm employees to which the mandate would apply. The mandate will also apply to Awesome Construction Firm’s subcontractors of all tiers working on the project. In short, EO 14042 presents a huge spider web of entanglements, which could result in nearly all of an organization’s employees having to comply with the vaccination mandate.​

    Conclusion: A Lot is at Stake

    With both the ETS and EO 14042 currently enjoined by federal courts, there is much uncertainty about whether any of the requirements discussed above will ever be enforced. Contractors and attorneys should keep their eyes peeled to the news as the federal judiciary grapples with the Biden Administration’s “Action Plan.” Should the legality of the provisions in the ETS and/or EO 14042 ultimately be upheld, having an action plan in place to comply with these significant requirements will be essential.

    This article was originally published on the State Bar of Wisconsin’s Construction and Public Contract Law Section Blog. Visit the State Bar sections or the Construction and Public Contract Law Section web pages to learn more about the benefits of section membership.

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    The Construction & Public Contract Law Section Blog is published by the State Bar of Wisconsin; blog posts are written by section members. To contribute to this blog, contact Mark Schmidt and review Author Submission Guidelines. Learn more about the Construction & Public Contract Law Section or become a member.

    Disclaimer: Views presented in blog posts are those of the blog post authors, not necessarily those of the Section or the State Bar of Wisconsin. Due to the rapidly changing nature of law and our reliance on information provided by outside sources, the State Bar of Wisconsin makes no warranty or guarantee concerning the accuracy or completeness of this content.

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