The Federal Reserve Bank of Minneapolis said Wednesday it will require its 1,100 employees to get vaccinated against COVID-19 by the end of August.

The regional unit of the nation's central bank will allow some employees to be exempt from vaccination for medical or religious reasons. Everyone else will need to get it to stay employed there. The policy will also be in effect for new hires.

The Minneapolis Fed is one of the first large employers in the Twin Cities to put a vaccine mandate in place. Some are still debating the issue while many others have decided to encourage, and in some cases provide incentives for, workers to get vaccinated.

Neel Kashkari, president of the Minneapolis Fed, said in an interview that leaders of the bank weighed the issue for months. About 82% of its employees are vaccinated. Even so, some voiced concerns about returning to the office.

"We were hearing from quite a few of our staff saying, 'Yes, I've been vaccinated, but I'm a little bit nervous about coming back into the office if a bunch of my colleagues are not going to be vaccinated,'" he said. "That for me personally was very persuasive."

He acknowledged that the new policy, which was communicated to employees on Tuesday, would not be well received by everyone.

"But for the vast majority of our employees, we think this is going to be a strong positive," Kashkari said. "It's the best thing we can do to keep everybody safe and make sure that we are fulfilling our public policy mission."

He said every employer needs to answer the mandate question based on its own needs, employee base and operational plans. But since he knew that many other firms are debating the issue right now, he decided to lay out reasons for the bank's move in an essay posted to the Minneapolis Fed's website on Wednesday.

In that essay, he noted the bank has managed to meet basic operating requirements even as more than 90% of its staff began working remotely in March 2020.

"But we also know that we are losing something by being almost fully remote," he wrote. "Our work requires close collaboration among staff. It requires brainstorming to identify and overcome challenges. It requires debate among colleagues, which is built on trust that takes time to develop and must be nurtured."

The bank will give employees more flexibility going forward, but it will also start bringing employees back to the office in waves in September.

Those who aren't vaccinated because of medical reasons or religious beliefs will have to wear masks in the office and maintain social distance from other people.

Kashkari added that he expects most of the 18% of employees who have not yet indicated that they're vaccinated will decide to do so.

"My expectation is it will end up being a very small number who choose to leave, but if they choose to, we respect their decision," he said.

Of the 130 companies that filled out a recent online survey by the Minnesota Chamber of Commerce, only about 5% said they were requiring employees to be vaccinated while 80% said they were not. The other 13% or so said they weren't sure yet.

Some companies have been reticent to put COVID-19 vaccine mandates into place because they worry they may be difficult to enforce and they may get criticism from employees. Others are concerned about potential lawsuits.

Kashkari noted that the Equal Employment Opportunity Commission has confirmed that employers can require them.

"So we believe we're on very solid legal ground," he said.

A Minneapolis Fed spokeswoman said the bank is asking employees to self-report their vaccination status and will keep the information confidential, accessible to only select staff members.

Macalester College in St. Paul is one of a handful of colleges around the state that have also decided to require students and employees to get vaccinated before returning to campus this fall. But others, such as the University of St. Thomas and the University of Minnesota, are not.

Some law firms such as Lockridge Grindal Nauen, which has an office in Minneapolis, have also decided to enact vaccine mandates.

Hospitals and nursing homes in Minnesota have largely not yet required that employees get the COVID-19 vaccine, though some experts believe they will eventually do so, especially if the Food and Drug Administration grants full approval for the vaccines.

Meanwhile, some firms are finding creative ways to persuade employees to get vaccinated without requiring them to do so. Last month, Richfield-based Best Buy launched an employee sweepstakes in which 21 workers will win $5,000 after showing proof of vaccination.