(Bloomberg) — President Joe Biden’s call for companies to enact Covid-19 vaccine or testing requirements is likely to exacerbate the labor shortage at some U.S. firms.

The Labor Department announced Thursday that all workers in companies of 100 employees or more will be required to receive a vaccine or have their Covid-19 levels regularly checked. The Labor Department set Jan. 4, as the deadline. You could face fines as high as $136,000. In an effort to curb the spread of the virus that has impacted the economy, the government is trying to improve workplace safety. According to the government, this measure will provide greater protections for approximately 84 millions workers. 

The new rules may have unintended side effects, such as causing workers opposing vaccinations in their workplaces to leave — which would cause another problem for businesses already trying to hire employees. 

“The mandates are probably going to push more people away than they’re going to bring back,” said Stephen Stanley, chief economist at Amherst Pierpont Securities. “We know there’s a significant number of people who don’t want to get vaccinated, and millions of people who want to work but will still be afraid of getting back because of the pandemic.” 

Stanley stated that many of these people are likely to be in jobs with public exposure, like servers or nurses. Mandates “may protect them from fellow workers but it doesn’t protect them from customers” or people encountered during their commute.

‘More Comfortable’

According to an Indeed Hiring Lab study, nearly one quarter of Americans who are out of work cite Covid-19 fear as the reason they have stopped actively looking for jobs. This share has remained steady since June.  

Amtrak, Google (NASDAQ:), as well as states such Colorado have implemented their own regulations. However, so far the effect has not been significant. According to a Kaiser Family Foundation survey, about 5% of workers who were not vaccinated quit their job after their employer placed a mandate for them to get vaccinated. New York’s police union had threatened 10,000 New York officers with leaving if the mandate was enforced. Only three percent of them ended up surrendering their badges.

Even small numbers can cause issues for businesses in tightening labor market. Although there are 5 million less Americans on the payroll than before the pandemic began, the rate of return to work is slowing. The September increase in workers was less than 100,000, which is the lowest this year. Manufacturers in Boston blamed the vaccine and testing rules for exacerbating worker shortages, and employers nationwide are worried about the effect on morale and payrolls, according to the Federal Reserve’s Beige Book of corporate anecdotes. 

The case for the new requirements is that they’ll enable a return to “a more normal state of affairs, where people can actually feel more comfortable working with others,” said Gregory Daco, chief U.S. economist at Oxford Economics. “If we can get to a healthier state, then we’ll get to a better economic state.”

©2021 Bloomberg L.P.