What Every HR Manager Needs to Know About the Impact of Marijuana Legalization

With the conclusion of the 2018 midterm elections, Michigan became the 10^th state (including District of Columbia) to legalize the recreational use of marijuana. In addition, voters in Utah and Missouri approved marijuana legalization for medical use, bringing the total number of states where medical use is legal to 33.

Social acceptance of marijuana legalization is growing. A 2017 Gallup poll revealed that 64% of the country believes marijuana should be legal, the highest level in nearly a half-century of polling. As a result, employers can expect to see a continued climb in the number of states legalizing pot.

Challenges for employers

The growing support of cannabis use for both medical and recreational purposes poses many challenges for employers.

Safety and productivity

The prospect of employees under the influence of marijuana raises concerns about absenteeism, productivity and workplace safety. Marijuana use in the workplace has been linked to an increase in occupational accidents and injuries due to short-term effects of the drug, such as memory issues, impaired sense of timing, decreased reaction time, altered problem-solving capabilities, changes in sensory perception and impaired body movements.

Healthcare cost increases

According to a study reported in the National Bureau of Economic Research, legalization increases both marijuana use and marijuana abuse/dependence in people 21 or older. It is also associated with an increase in adult binge drinking (defined as the number of days in a month an individual had five or more drinks on the same occasion).

The study’s authors note that the observed increase in frequency of adult binge drinking, along with an estimated increase in the probability of simultaneous use of marijuana and alcohol, suggests that legalization could result in “considerable economic and social costs from downstream health care expenditures and productivity loss.”

Hiring

Even before the economy was at full employment, many companies were having trouble filling open positions. Often, the barrier to hiring was finding candidates who could pass drug testing. “Legalizing marijuana is going to increase the number of people who cannot pass pre-employment and random drug tests,” said Kristy Duritsch, executive director for the Safety Council of Southwestern Ohio. “It’s also going to add to turnover rates.”

In Colorado, one of the first two states to legalize recreational marijuana, employers have begun hiring from other states after being unable to find in-state residents who can pass drug tests, according to HRTechnologist.

Some companies are abandoning drug testing altogether. A 2017 survey by Mountain States Employer’s Council found that of the 609 Colorado employers they surveyed, the percent testing for marijuana fell to 66% from 77% the prior year. “That’s disturbing from an employer’s perspective,” says Paul Bittner, partner at Ice Miller law firm. “You don’t want people coming to work under the influence of a drug. You not only lose productivity, but the bigger concern for employers is potential liability if there’s an accident and someone gets hurt or killed.”

Legal

Another issue employers will have to tackle is the possibility of lawsuits if employees feel they have been discriminated against, especially for medical marijuana users.

A frequently noted case is that of Brandon Coats, a quadriplegic with a Colorado state-licensed medical marijuana certificate. He worked as a telephone customer service representative for DISH Network. Coats tested positive for THC, an indicator of marijuana use, during a random test and was terminated for violating the company’s zero-tolerance drug policy.

The case was ultimately decided by the Colorado Supreme Court, which determined an employee could be fired for consuming medical marijuana. This might sound surprising since Colorado’s off-duty conduct laws offer statutory protection for employees who engage in lawful activities outside of work. Since marijuana is legal in Colorado, consumption is a lawful activity in the state. However, the court held that “lawful” refers to activities that are lawful under both state and federal law, and marijuana remains illegal under federal law. Therefore, the off-duty statute does not protect employees who consume medical marijuana.

“Legalizing marijuana is going to increase the number of people who cannot pass pre-employment and random drug tests”

What should employers do?

Bittner refers to Coats v. DISH Network as the “go to” case. “If you have a drug-free workplace policy, I would not change it,” he says.

Employers operating in a state where marijuana is still completely illegal can change their drug policies and address the use of marijuana directly. “Write policies that let your employees know that disciplinary action will take place and violations could lead to termination,” says Bittner. Employers should double-check to ensure their company is complying with the Drug- Free Workplace Act of 1988 and any state laws that may affect drug testing.

If you are federally funded or have federal contracts, you must still abide by the Drug-Free Workplace Act.

As more states legalize recreational marijuana, there has been some confusion as to whether employers can stick to existing drug testing and personal conduct policies. Do employers need to accommodate an employee’s use or possession of the drug? What should employers do if an employee tests positive for marijuana?

Bob Capwell, Chief Knowledge Officer at Employee Background Investigations, offers this advice: “Employers need to review their company policies as they relate to changing legislation and where they provide services. States that have reasonable accommodation laws for medical marijuana cardholders such as Arizona, Connecticut, Delaware, Maine, Minnesota, Nevada, New York and Rhode Island are problematic and a concern for employers with blank prohibitions on medical marijuana users.”

States with legalized recreational marijuana all have exemptions for workplace drug policies. However, medical marijuana use at the workplace is less clear. A California court recently reaffirmed that an employer still maintains the right to discipline employees even where the marijuana use is recommended by a physician. In Arizona, on the other hand, an employer may not discriminate in any way against a certified medical marijuana patient who fails a drug test, unless the individual used, possessed or was under the influence of marijuana while at work, or unless failure to take disciplinary action would cause the employer to lose a financial or licensing-related benefit under federal law.

Some states afford protections to registered medical marijuana users and may require that employers engage in an interactive process to see if a reasonable accommodation can be made.

“As a practical matter, this means that if an employee in one of these states is using marijuana with a medical card, employers cannot fire them on that basis. However, if an employee is using marijuana recreationally, the employee’s job would not be similarly protected,” said Jill Cohen, attorney at Eckert Seamans Cherin & Mellott.

In the majority of states, employers don’t have to make accommodations, even for off-duty medicinal use. Federal employers like DOT have no obligation to accommodate marijuana use.

However, employers don’t have to tolerate employees under the influence while on the job, even if a worker is using marijuana for medical reasons. So accommodations might include additional time off or a leave of absence for the period the worker needs to use the drug.

The underlying issue is that a medical marijuana cardholder may have an independently qualifying medical condition. Therefore, employers may want to engage in an interactive process even if the law does not require it, according to Rachel Schumacher, an attorney with Akerman in Los Angeles.

“Workers need to know that they can’t have an edible at lunch and come back to the office”

For some employers, the obvious way to enforce a zero-tolerance policy is to conduct random drug testing, but this is easier said than done. Unlike a Breathalyzer test for alcohol, which yields precise results for impairment, there is no definitive way for employers to determine an employee’s level of impairment from marijuana. Routine tests for marijuana yield a lot of false positives and negatives because marijuana can take a long time to be metabolized out of a user’s system.

Then there is the question of privacy rights. Personal testing is often very invasive, so employers need to strike a fine balance between employees’ privacy and workplace safety. Marijuana users applying for or working in positions that are under DOT regulation are subject to federal guidelines and have limited or no rights.

Employers must decide how strong of a position they want to take as a company. If you’re a safety-sensitive or federal contractor, you may not have a choice. But for other employers, mandatory drug testing sends a clear signal.

Employers who feel strongly about their workforce steering clear of marijuana use must clarify their position with a clear company policy that outlines the expectations and consequences of a positive test. As long as an employer has enforced a prohibitory policy at the workplace, the employer will reserve the right to terminate an employee for their use of recreational marijuana legally.

Employers who want to take a more liberal approach may want to communicate to workers that even though it’s legal to use marijuana recreationally, being under the influence at work is unacceptable. Workers need to know that they can’t have an edible at lunch and come back to the office, said Schumacher.

Finally, be sure to train managers on how to deal with potential use on the job or “for cause testing” on the job, along with the ability to identify signs of using at work.

About Espyr

Espyr is a leading behavioral health company. Our mission is to help our client organizations and their employees achieve their full potential.  As part of this mission, we help clients and their employees deal with drug and alcohol abuse issues and provide management consulting to HR teams on related intervention services. For more information on Espyr, call us at 866-570-3479 or go to espyr.com.