October 22, 2021

Governor Murphy Issues Executive Order Mandating Contracting Employers Implement COVID Vaccine and Testing Requirements

What Happened?

On October 20, 2021, Governor Murphy issued Executive Order No. 271 requiring that new state contracts, solicitations for contracts, extensions or renewals of existing contracts, and options on existing contracts contain a clause mandating the contracting employer to implement a vaccine-or-testing policy.  The required policy would apply to any employees of the contracting employer who enter, work at, or provide services in any state agency location.  Executive Order No. 271 expands upon Governor Murphy’s previous Order requiring all state employees be fully vaccinated and is another step towards the objective of getting as many individuals vaccinated as possible.  The Order is drafted and to be implemented broadly and is immediately effective.

Why it Matters?

The Order requires that each executive department and agency including independent authorities ensure that contracts or agreements entered into by the executive department or agency include a clause that the contractor or subcontractors, at any tier, must maintain a policy requiring all covered workers to either provide proof of fully vaccinated status or submit to COVID-19 testing at minimum one to two times per week.  The Order applies to any new contract, new solicitation for a contract, extension or renewal of an existing contract, and exercise of an option on an existing contract, if it is a contract for services, construction, including demolition, remediation, removal of hazardous substances, alteration, custom fabrication, repair work, or maintenance work, or a leasehold interest in real property through which covered workers have access to State property, and the cost or contract price thereof is to be paid, in whole or in part, with or out of executive department or agency funds.

Pursuant to the Order, “covered workers” include employees of a covered contractor working on or in connection with a contract with an executive department or agency that requires the worker enter, work at, or provide services in any place, site, installation, building, room, or facility in which any executive department or agency conducts official business or is within an executive department or agency’s jurisdiction, custody, or control, or that relates to offering services for State employees, their dependents, or the general public.

To satisfy the testing alternative, a covered worker must undergo screening testing at minimum one to two times weekly. Where a covered contractor requires an unvaccinated covered worker to submit proof of a COVID-19 test, the worker may choose either antigen or molecular tests that have EUA by the U.S. Food and Drug Administration (“FDA”) or are operating per the Laboratory Developed Test requirements by the U.S. Centers for Medicare and Medicaid Services.  If the covered contractor provides onsite testing, either antigen or molecular testing may be used, and testing is not required for a covered employee not working on-site during a particular week.

Adequate proof of full vaccinated status includes: (a) CDC COVID-19 Vaccination Cards; (b) official record from the New Jersey Immunization Information System (NJIIS) or other State immunization registry; (c) a record from a health care provider’s medical record system on official letterhead signed by a licensed physician, nurse practitioner, physician’s assistant, registered nurse or pharmacist; or (d) military immunization or health record from the United States Armed Forces; or Docket mobile phone application record or any state specific application that produces a digital health record.

What Should you do now?

Because the Executive Order provides a testing alternative, it is effective immediately and does not include a compliance period.  Employers who directly contract with the state need to immediately review their policies and either amend existing policies or adopt a new policy requiring employees working on or in connection with those contracts to be fully vaccinated or submit to weekly testing.  Employers who are not direct contractors should review their operations to determine if they are a subcontractor of the state and adopt or amend their policies accordingly. Given the policy aim behind the Order and the wide application, employers should broadly apply the Order’s requirements in both their policies and their actions.

Failure to abide by the Order constitutes disorderly conduct and the penalties can include monetary fines and imprisonment.  It is also possible that a business failing to follow the Order will jeopardize their existing and future contracts with the state.  Employers should work with experienced employment counsel to ensure their policies and practices are compliant with the Order.

HLS’s Employment Practice Group regularly advises businesses on compliance with ever-changing COVID regulations and guidance and can help employers avoid costly penalties while preserving business operations.