Treasury IG to audit airlines’ compliance with CARES law loans, amid COVID vaccine layoffs

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EXCLUSIVE: Treasury Department Inspector General plans to conduct audit to determine whether major airlines are meeting the terms of their federal government loans under the CARES Act, amid layoffs of employees due to coronavirus vaccine mandates.

Earlier this month, Republican Senator Josh Hawley, R-Mo., Wrote a letter to the Inspector General of the Treasury Department, calling for a “full investigation” after reports that United Airlines said that it would lay off around 600 employees for refusing to comply with its vaccination mandates. Hawley also called for a review of whether airlines sacking workers for breaching vaccine mandates “violated the terms of their loans.”

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FOX Business on Tuesday obtained a letter from the Treasury Department’s Acting Inspector General in response to Hawley’s request.

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“I am responding to your October 18 letter expressing your concerns about widespread layoffs in the airline industry related to federal COVID-19 vaccine mandates, and whether those layoffs are inconsistent with commitments made by companies as a condition for receive the Air Carrier Payroll Support (PSP) program, ”wrote Acting Treasury Inspector General Rich Delmar.

“The Office of the Inspector General of the Treasury plans to conduct audit work on certain aspects of this issue. Audit processes are best suited to address issues such as the ones you raise, which relate to systemic compliance. of the program, “continued Delmar.

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Hawley, in his letter, also asked whether the layoffs resulted in delays in air service, which Delmar said was “beyond our jurisdiction.”

Delmar, however, noted that the audit “will include an assessment of compliance with program requirements, including workers’ employment status.”

A United Airlines airliner takes off with New York City as a backdrop, at Newark Liberty International Airport, New Jersey, December 6, 2019. (REUTERS / Chris Helgren / File Photo / Reuters Photos)

“We plan to launch an audit on this issue in FY22, as resources permit, in addition to our existing work in the three air carrier PSPs,” Delmar added.

The CARES Act earmarked funds for airlines and other businesses in 2020 to provide financial support during the coronavirus pandemic through the Payroll Support Program banning airlines from laying off until October 1, 2020, by exchange of help. The payroll support program was then extended in December 2020.

“When they agreed to a multibillion-dollar taxpayer bailout, the only condition these big airlines had to agree to was that they wouldn’t lay off their employees,” Hawley told FOX Business. “But now, citing Joe Biden’s still unwritten vaccine mandate, those same companies have been all too happy to kick essential workers out.”

He added: “I am encouraged to see the Treasury accept my appeal to verify the use of these funds and eagerly await their findings.”

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Since the CARES Act funds were allocated, the Food and Drug Administration has given the green light to Emergency Use Authorizations (EUA) for three vaccines to protect against the novel coronavirus. The FDA has now cleared the use of the Pfizer-BioNtech vaccine. Moderna and Johnson & Johnson remain under EUA.

Senator Josh Hawley, R-Mo., Asks questions during a Senate Committee on Homeland Security and Government Affairs hearing to discuss election security and the 2020 electoral process on Wednesday, December 16, 2020, in Capitol Hill in Washington. (Greg Nash / Poo

Over the summer, President Biden signed an executive order over the summer requiring all executive workers to be vaccinated against COVID-19[female[feminine. Biden also signed an order requiring companies with more than 100 workers to require vaccination against coronaviruses.

Biden also signed an executive order on September 9 requiring federal contractors to mandate vaccinations and ensure workers are fully vaccinated by December 8.

Trade groups representing airline workers, truck drivers, etc. Some organizations have requested extensions until 2022.

But the 67,000 U.S.-based United Airlines employees had a strict September 27 deadline to get vaccinated or risk losing their jobs – with a few exceptions.

The carrier, which has taken the strongest pro-vaccination stance among U.S. airlines, confirmed earlier this month that less than 1% of its staff, or 232 employees, were on the verge of being laid off for not having met the deadline.

But last week Southwest Airlines vowed that employees would not be made redundant for failing to receive the coronavirus vaccine. Despite the federal government deadline for employees to be fully immunized by Dec. 8, Southwest CEO Gary Kelly said on the company’s third quarter earnings call that no one is would lose his job on Dec. 9, even if the airline is not “fully compliant.”

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“We’re not going to fire anyone who doesn’t get the shot,” Kelly said. “How we’re working with people who aren’t getting vaccinated or looking for housing, we’re going to have to find and we’re working with the government on that.”

The carrier, according to Kelly, is currently trying to strike a balance between maintaining its status as a government contractor while taking care of its employees.

“It doesn’t make sense that we don’t respect that and find a way to work with our people on it,” he said, adding that the last thing he wanted was “for people to fear that they will not be able to work or have a job ”, especially as the end of the year holidays approach.

Going forward, the carrier said it plans to work with and understand the personal circumstances of each employee while “continuing to work to comply with the federal mandate.”

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Also last week, American AirlinesThe flight attendants union has told its members they will not be immediately sacked if they are not vaccinated by the deadline. He noted that officials “are exploring accommodations that would allow employees to continue working.”

The Associated Press contributed to this report.


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