Airline staffers won't have to be vaccinated before the holiday travel season - but tension and uncertainty remain in wake of extended vaccine deadline

• The Biden administration pushed back the vaccine mandate deadline for federal contractors to January 4, 2022.
• Airlines with federal contracts don't have to worry about meeting the deadline until after the holidays.

Airlines will be able to keep unvaccinated workers this holiday season without fear of reprisal from the federal government.

The Biden administration outlined new COVID-19 vaccine rules for contractors of the federal government this week, including airlines that hold federal contracts. As part of the updated policy, the deadline to require vaccinations for employees was moved to January 4, 2022, up from the original date of December 8.

Unvaccinated airline workers seeking exemptions will have until January 4 to file a request. While American Airlines has already extended its internal vaccine deadline, Southwest told Insider that it is "reviewing the revised guidance."

The extension staves off a potential showdown between the government and airlines over unvaccinated workers heading into the busy holiday season. Prior to the new deadline, many airlines had already signaled they may not fully comply with the December timeline, including executives at American Airlines and Southwest Airlines who indicated they would refuse to fire unvaccinated staffers.

It also comes as many airlines struggle with understaffing during a period of recovery for the industry. Southwest and American both canceled thousands of flights last month alone when staffing shortages became compounded with extreme weather.

Employment lawyers told Insider that companies could jeopardize future government contracts if they don't comply, though the Occupational Safety and Health Administration's hefty fines for noncompliance may not apply to airlines, given the agency's rule does not apply to federal contractors.

Airlines, under the rule, may also be able to designate contracted workplaces that are subject to the vaccine mandate while other workplaces could only be subject to regular testing for unvaccinated workers. Still, airlines may not be able to easily differentiate, according to Mark Goldstein, a partner and labor and employment attorney and partner at Reed Smith.

"The conservative approach then would be to simply comply with the requirements set forth in the federal contractor guidance," Goldstein told Insider.

The federal government is asserting that its mandate takes precedent over state and local laws, including Texas Gov. Gregg Abbott's executive order barring employers from requiring workers receive the COVID-19 vaccine. Despite bristling over the deadline, Southwest and American, both headquartered in Texas, previously stated they would follow the federal guidance over the state's executive order.

Airlines will still have leeway in how they deal with unvaccinated staff come January 4, and firings may not immediately begin. However, a company without a fully vaccinated workforce may not be able to do business with the federal government when it comes time to bid on new government contracts, according to Christopher Foley, a partner and labor and employment attorney at Foley & Lardner.

"At the end of the day, if the government wants to pull the plug on the contract for noncompliance with their requirement, they can do so," Foley told Insider. "That's sort of the nuclear option here."