The U.S. Occupational Safety and Health Administration suspended Wednesday its requirement that large employers nationwide ensure their workers are either vaccinated against COVID-19 or tested weekly for the virus by Jan. 4, throwing President Biden’s controversial mandate into doubt.

The decision followed a stay the 5th U.S. Circuit Court of Appeals in New Orleans granted Friday in a lawsuit seeking to block the mandate filed on behalf of various companies, religious groups, private citizens and the states of Texas, Louisiana, Mississippi, South Carolina and Utah.

The court granted the stay after concluding the mandate is “fatally flawed” and the lawsuit likely to succeed.

“Its promulgation grossly exceeds OSHA’s statutory authority,” the court ruled.

OSHA said Wednesday that since the court ordered that it “take no steps to implement or enforce” the mandate “until further court order,” the agency “has suspended activities related to the implementation and enforcement” of the requirement “pending future developments in the litigation.”

“OSHA remains confident in its authority to protect workers in emergencies,” the agency said.

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Though California is outside the jurisdiction of the 5th Circuit court and is among 26 states with their own OSHA plans, the stay is being implemented nationwide.

Cal/OSHA, which was to meet Thursday to determine how it would implement the mandate in the state, said Wednesday it is following federal OSHA guidance to not proceed while the stay is in effect.

OSHA’s proposed mandate would have affected employers of 100 or more total U.S. full-time and part-time workers, even if they are scattered in smaller numbers at multiple sites, some 84 million workers, or two-thirds of the nation’s private-sector workforce.

Patrick Kallerman, vice president of research at the Bay Area Council Economic Institute, said there are over 15,000 firms in California with more than 100 employees, employing 57.2% of the state’s workforce.

OSHA’s decision doesn’t prevent private employers from implementing their own vaccine requirements, which courts have supported, only a blanket national and statewide policy. President Biden already has imposed similar vaccine or test mandates on federal workers and contractors, the military and federal health providers.

California already has adopted requirements for health care workers to be vaccinated and state workers and teachers to be either vaccinated or tested. California lawmakers considered a broader statewide employee vaccine mandate but failed to pass it this year; legislators may take it up again next year.

Several cities and counties, including San Francisco, Berkeley, and Contra Costa County and Los Angeles County, have adopted local requirements for certain employers such as restaurants, bars, nightclubs, gyms and dance studios to ensure their workers are vaccinated for COVID-19 or tested weekly.

But while business groups have supported vaccine requirements, they have been uneasy with the federal and statewide mandate.

Rob Moutrie, policy advocate for the California Chamber of Commerce, said that while the group supports businesses requiring vaccination, it also is concerned that a blanket mandate would hurt those already struggling with labor shortages.

“The Chamber of Commerce is very much in favor of vaccines as the way out of this pandemic,” Moutrie said. “However we’re also really concerned about the labor shortage affecting California’s businesses and realize such mandates may have impacts on those labor-short industries, including restaurants.”

One major unresolved issue with the proposed mandate, Moutrie added, is whether it would force employers to pay for weekly COVID-19 testing for their unvaccinated workers, which could cost some $5,000 per employee.

The proposed federal rule said employers wouldn’t have to cover those costs, but Cal/OSHA generally requires employers to pay for tests for on-the-job exposures, and it was unclear whether California businesses would be exempted from paying for weekly COVID-19 tests. Moutrie says businesses believe those workers should bear that cost. But with the stay in effect, they won’t get an answer any time soon.

“Uncertainty is never good for businesses,” Moutrie said. “We’re in favor getting this resolved quickly.”