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About 3,200 Michigan-based workers at Steelcase Inc. learned last week that they must prove by Dec. 8 that they have been fully vaccinated for COVID-19.
That’s because the Grand Rapids furniture maker, which employs 4,800 total workers in the United States, is a federal contractor that supplies government offices. The workers now face a choice: Get vaccinated, seek an exemption or risk suspension or firings.
So do workers at fellow Michigan furniture makers Haworth and MillerKnoll, which announced they too would enact a vaccine mandate to preserve their sales to the government.
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“The commitments we make to serving customers has always been important, and we will comply with the federal contractor directive to continue to serve the U.S. government,” Steelcase spokesperson Katie Woodruff told Bridge Michigan.
Workers in thousands of Michigan businesses are expected to confront the same choices and deadline, as the national mandate for federal contractors will affect “every county in Michigan,” said Sue Tellier, owner of JetCo Federal Supply in Grand Rapids and second vice chair of the Small Business Association of Michigan’s board of directors.
The mandate is one of several announced by President Joseph Biden on Sept. 8 that are rolling out this fall, affecting federal workers, companies that do business with the federal government — including universities that accept research funding — and the nation’s largest employers.
In Michigan, estimates say 42 percent of the state’s labor force, some 2 million workers, will be under some form of a mandate by year-end, including employees at private workplaces, the University of Michigan and Michigan State University and at least 10 health care systems, including Beaumont, the state’s largest.
It’s unclear how many workers in Michigan will be affected by the federal contractor mandate, but thousands of state businesses are registered to bid on government contracts.
The situation is “creating significant uncertainty” for the businesses and subcontractors, said Craig Smith, a federal contract attorney and partner with the Washington, DC-based law firm Wiley Rein.
“All of a sudden, you get asked to add these obligations to your contract,” Smith said. “That may be quite a surprise for many companies.”
The mandate comes atop a national worker shortage and “clearly a variety of perspectives on vaccination,” Smith said.
For employers, Tellier said, “the ripple effect is massive.”
Rules and guidance
Rules for the contractor mandate were announced in late September. The order said the vaccine mandate only applied to “covered contracts,” which were valued at over $250,000 and either were starting or being extended this fall.
But shortly afterward, the Safer Federal Workforce Task Force, led by the White House’s COVID-19 Response Team, issued guidance for how businesses should respond to the rules.
Its advice: Contractors, even those not specifically mentioned in the order, should comply with it anyway. Also stated in the guidance:
- No test-out option allows employees to take regular COVID-19 tests instead of getting vaccinated.
- The effective deadline for vaccines is Nov. 24 because there must be a two-week interval between final dose and the deadline.
- Employees affected include part-time and remote workers.
When he announced the mandates, Biden said the unvaccinated were driving the spread of the disease along with increased hospitalizations and deaths. In the workplace, he said, costs of absences and outbreak-related closures were also a problem.
Since then, COVID-19 cases and deaths have declined nationwide: On Oct. 22, 1,834 deaths were reported, down from 2,033 on Sept. 8. New cases dropped by more than half, with about 77,933 on Oct. 22.
So far, about 220 million people — or 77.6 percent of those eligible — have received at least one dose, according to the U.S. Centers for Disease Control and Prevention.
That leaves an estimated 72 million people ages 12 and up who are eligible but not yet vaccinated, prompting Biden to take the mandate into workplaces to reach 18 to 65 year olds.
Biden’s plan offered a series of deadlines. Workers at medical facilities that accept federal funding and federal employees must be fully vaccinated by Nov. 22.
Rules have yet to be written on vaccination mandates for workplaces of 100 or more employees, but the Occupational Safety and Health Administration could publish them this week. The mandate would take effect 60 days later, or by Christmas at the earliest.
In between is the Dec. 8 deadline for businesses that provide goods and services totaling about $600 billion per year to the federal government, according to a recent Goldman Sachs survey on the decline in small businesses participating in procurement.
Michigan’s share of those contracts wasn’t immediately clear Monday. But the range of work and products put out for bid by agencies like the Department of the Interior and the General Services Administration reaches all corners of the state, in amounts from under $150,000 to $50 million.
Much of it is centered in the state’s defense contracting, more than half of which is based in Macomb County, and the aerospace industry.
But the contracts go to businesses large and small throughout the state. The federal government is now seeking contractors to repair elevators in Detroit and Ann Arbor; provide office furniture in Battle Creek; build a parking lot at Picture Rocks National Lakeshore in Munising; renovate an office building in Lansing and build a security fence in Flint.
Each federal contractor under the mandate is responsible for setting up their internal response to the mandate, said Smith, the Washington, DC, attorney.
“Those kinds of analyses are challenging enough in an ordinary operating environment,” Smith said. “But the speed that is moving … requires companies to spend incredible amounts of time doing the best they can to make judgment calls.”
Smith said many companies are concluding that they will simply require all staffers to follow the mandate.
That’s the situation at Steelcase in Michigan, which told Bridge that it also will accept requests for exemptions.
“Across industries across the country many contractors are making the choice to decide that, as a result of the executive order, they feel that the best way to balance the many challenges … is to direct all employees to be vaccinated,” Smith said.
Mandates already playing out
Many business advocates in Michigan are watching the situation with concern, even if they support vaccinations.
Wendy Block, vice president of government affairs for the Michigan Chamber of Commerce, said members continue to ask enforcement questions and few answers have been available.
Business owners also worry the mandate will drive employees away at a time when hiring is difficult. The state’s labor force has declined by about 180,000 workers to 4.7 million since the start of the pandemic, according to preliminary data from September.
That’s true “particularly in regions where there is staunch opposition to the vaccine,” Block said.
“Federal mandates only seem to be serving the purpose of people digging in (with their stance for or against the vaccines),” Block said. “In this fierce talent market, people have choices.”
So far, some Michigan universities and health systems have enacted vaccine mandates, offering a glimpse of how a vaccine mandate will play out.
At Beaumont, 370 workers out of 33,000 were suspended for not getting a vaccination or qualifying for an exemption. Another 70 quit. At the University of Michigan, officials say a few hundred staffers who are not vaccinated will be placed on unpaid leave for 30 days if they don’t report the start of their vaccination process by Nov. 8.
Steelcase did not reply to questions about how it anticipates the move to affect its workforce. The company has 102 Michigan job openings — some with multiple hires possible, such as distribution workers — listed on its corporate website.
Block, with the Michigan Chamber, said prioritizing health is important. However, the mandate brings “a lot of complicating factors” to employers that have spent 18 months navigating workplace health and unfilled jobs.
“It feels like a step too far for many businesses and their employees,” Block said.
While large employers wait for federal vaccine mandate rules, federal contracts still have many questions, said Tellier of JetCo Federal Supply..
Among them are what documentation will be required and penalties for non-compliance.
Tellier’s business supports federal contractors with packaging and labeling requirements, and she also sells directly to the federal government.
With about 25 employees, JetCo and a related consulting business run by her husband, Tellier said she’s told workers as much as she knows and most have few concerns.
However, Tellier said she’s worried that some businesses may be ignoring the looming deadline until the last possible minute.
She encourages them to contact other businesses or trade organizations, including the Michigan Defense Center, run by the Michigan Economic Development Corpo.
“If any federal contractors have not paid attention to this so far,” she said, “they’re late.”
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