White House eases vaccine mandate enforcement amid fears of dropped contracts

The White House is giving federal contractors more flexibility in how they enforce the vaccine mandate amid fears that the edict could cause companies to drop contracts. 

In updated guidance released on Monday morning, the Biden administration said it will be up to the contractors how they wish to deal with workers who refuse to comply with the president’s order to be fully vaccinated by Dec. 8.

“A covered contractor should determine the appropriate means of enforcement with respect to its employee at a covered contractor workplace who refuses to be vaccinated and has not been provided, or does not have a pending request for, an accommodation,” the guidance reads. “This may include the covered contractor using its usual processes for enforcement of workplace policies, such as those addressed in the contractor’s employee handbook or collective bargaining agreements.” 

President Joe Biden had previously signed executive orders that mandated the COVID-19 vaccine for all federal employees and for companies that have federal contracts with the government.

He additionally dictated that businesses with more than 100 employees also have to implement vaccine requirements, although for those companies, proof of regular negative COVID-19 tests can be used in lieu of a worker getting inoculated. 

The guidance notes that one model on which contractors can base their noncompliance policies is that of the federal government. 

“Guidance for Federal agencies is to utilize an enforcement policy that encourages compliance, including through a limited period of counseling and education, followed by additional disciplinary measures if necessary,” the guidance said, adding that removal of an employee only happens after continued noncompliance. 

Additionally, federal contractors will not be forced to provide proof of their companies’ vaccination rates by the Dec. 8 deadline, a senior administration official told CNBC, although continued noncompliance with the mandate could result in businesses losing federal contracts. 

News of the increased flexibility comes after some companies and business groups have objected to the notion that all federal contractors must have their employees vaccinated without the testing exemption. 

Eric Hoplin, president and CEO of the National Association of Wholesaler-Distributors, recently warned that if the contractor rules are implemented, thousands of workers will be laid off and the supply chain problems will grow much worse. 

“NAW urges that the Executive Order’s implementation be revised to avoid this calamity and provide alternatives to promote safety, including testing, and consider a short-term delay to provide time to carry out these changes and to avoid further supply chain disruptions in the coming months,” he wrote. 

Some suggestions that have been floated include delaying the contractor mandate, providing a testing exemption, or scrapping the edict entirely. The concerns about the contractor mandate come as the United States inches closer to a busy holiday season that is already expected to be hampered by supply chain delays. The White House’s Dec. 8 deadline would coincide with one of the busiest shopping times of the year, and the loss of unvaccinated workers could exacerbate the situation. 

Some corporations are also weighing whether to cut off their federal contracts entirely for fear of losing workers. American Trucking Associations Executive Vice President for Advocacy Bill Sullivan told Politico that if trucking businesses start dropping contracts, it could have a visible effect on the armed forces.

“I am confident but with heavy heart recognize a vaccine mandate will mean less capacity for the government as a customer of freight,” he said. “It has the potential to seriously impact military readiness.” 

The delta variant of COVID-19, which caused hospitalizations and deaths to climb starting in early July, peaked last month and has been on the decline. Nearly 60% of the country is now fully vaccinated, including 68% of those over age 12.