Delta will penalize unvaccinated employees with monthly health plan surcharge

Delta Air Lines will impose a $200 monthly surcharge on employees who do not receive the COVID-19 vaccine, the airline said Wednesday.

The surcharge will apply to any unvaccinated employee who uses Delta's employer-provided health plan.

Additionally, unvaccinated workers will be required to wear masks while indoors, and submit to weekly COVID-19 testing starting Sept. 12. Unvaccinated employees will also be ineligible for pay protection if they contract the illness beginning Sept. 30. The surcharge will take effect on Nov. 1.

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About 75% of Delta employees are already vaccinated, CEO Ed Bastian said in a memo to staff on Wednesday. Delta appeared to be the first major U.S. company to use financial penalties as a measure to encourage employees to become vaccinated.

Major U.S. airlines including Delta, American, and Southwest have come under pressure to mandate vaccines among employees after United Airlines announced an unequivocal mandate for its workers earlier this month. Aside from those with documented religious or medical exemptions, United employees who fail to provide proof of vaccination by Sept. 27 will be fired.

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Frontier Airlines and Hawaiian Airlines have issued similar mandates to United's. However, Frontier will allow employees to skip vaccination in lieu of weekly testing, while Hawaiian did not immediately address consequences for employees who refuse to comply with the policy.

Airlines have not implemented vaccine requirements for passengers, aside from on international flights where vaccination is required to enter the destination country.

Each Delta employee who is hospitalized with COVID-19 costs the airline an average of $50,000, Bastian said in Wednesday's memo.

"This surcharge will be necessary to address the financial risk the decision to not vaccinate is creating for our company," Bastian wrote. "In recent weeks since the rise of the B.1.617.2 variant, all Delta employees who have been hospitalized with COVID were not fully vaccinated."

Although some companies and executives — including Bastian — have expressed hesitancy to mandate vaccination while the jabs were only available under Emergency Use Authorizations, the FDA issued its full approval to one of the vaccines, made by Pfizer, on Monday.

Both Delta and United previously said that all new hires must be vaccinated.

As discussion of compulsory vaccination in public and private workplaces has emerged, employers have noted the potential for lengthy litigation or other resistance, as the Washington Post reported.

More: Delta is testing new tool to let passengers upload vaccine cards ahead of their flight

However, the Equal Employment Opportunity Commission (EEOC) said in December that employees can legally require that existing and new employees be vaccinated, providing that exceptions are allowed on medical or religious grounds.