Marijuana legislation status

NCCI recently released a report that describes key marijuana-related developments in states as of June 22, 2021. Medical marijuana is now legal in 36 states plus the District of Columbia. Kansas, Nebraska, and Idaho are the only three states that have not legalized marijuana in any form to date. In eleven states (GA, IA, IN, KY, MS, NC, SC, TN, TX, WI, and WY) only CBD/Nonpsychoactive is approved.

While many laws do not address the issue, reimbursement for medical marijuana in workers' compensation is a hot topic. Alabama, the most recent state to adopt medical marijuana, does not require an employer, property and casualty insurer, or private health insurer to reimburse employees for costs associated with the use of medical cannabis. In Florida, reimbursement is prohibited. Legislation is pending in Pennsylvania that would not require insurers to provide coverage for or reimburse the cost of medical marijuana. New Mexico requires reimbursement and bills that would allow for reimbursement are pending in New York and New Jersey. Case law is setting the stage in other states.

Adding to the complexity for employers, state courts have issued widely divergent rulings on the issue of medical marijuana reimbursement in workers' comp. This year, the New Jersey and New Hampshire Supreme Courts ruled that reimbursement is allowed. An appellate court in New York ruled that an employer/workers' compensation carrier was required to reimburse medical marijuana use as a workers' comp treatment. However, the Arkansas Workers' Compensation Commission ruled that a workers compensation insurer is not required to reimburse for marijuana as a medical treatment, as did the Massachusetts Supreme Court in 2020.

Another issue is employment discrimination against applicants and employees who use medical marijuana. Statutes in Arizona, Arkansas, Connecticut, Delaware, Illinois, Maine, Massachusetts, Minnesota, Nevada, New York, Pennsylvania, Rhode Island, Washington DC, and West Virginia address employment protection for medical marijuana users. Protections include prohibiting a positive marijuana test alone as grounds for denial of employment or termination and/or accommodating marijuana for medical use. It's still possible to restrict marijuana use in these states, but care needs to be taken in crafting and enforcing a policy.

In some states, firing or otherwise sanctioning an employee for taking a legal drug can result in a discrimination suit. In states that have disability laws, employers may need to engage in an interactive process to see if a reasonable accommodation can be made, particularly if the medical marijuana cardholder has an independently qualifying medical condition. The ADA does not protect employees who use drugs that are illegal under the Controlled Substances Act, which includes cannabis.

There's been a flurry of activity to legalize marijuana for recreational purposes. Four states, Connecticut, New Mexico, New York, and Virginia passed legislation this year. There are now 19 states, plus the District of Columbia, that have legalized the recreational use of marijuana and legislation is pending in Pennsylvania, Rhode Island, and Wisconsin. Florida, Hawaii, Minnesota, Nebraska, and North Dakota considered, but have not passed, legislation to legalize marijuana this year. A trial court judge in South Dakota ruled the state's 2020 recreational marijuana ballot measure unconstitutional, and the case is before the state Supreme Court. An effort to get the issue on the 2022 ballot in Florida was struck down as unconstitutional by the state Supreme Court because the court found the language proposed in the ballot's summary was misleading.

Some states such as Alabama, Montana, Nevada, and North Dakota, have set legislative standards for intoxication and disallow or lower workers' compensation benefits if an employee is found to be impaired at the time of a work injury or refuses to take a test, while others have failed to pass similar measures.

Hard decisions about drug testing

Given the labor shortage, the proliferation of marijuana, cannabis-friendly public opinion, and shortcomings of cannabis testing, employers face tough decisions about post-offer/ pre-employment drug testing. Amazon made a paradigm-shifting announcement in June that it would stop testing for cannabis metabolites as part of its drug screening program for positions not regulated by the DOT. Clinical laboratory operator, Quest Diagnostics, has reported a slow, but gradual decline (between five and eight percent) in the number of employers including cannabis in drug panels.

Data from the Federal Motor Carrier Safety Administration's (FMCSA) Drug and Alcohol Clearinghouse sheds light on the challenges of managing drug testing results. Of the 80,000 failed drug tests collected by the clearinghouse since it went into effect on Jan. 6, 2020, more than half were due to positive results for marijuana metabolites. The clearinghouse requires CDL drivers and their employers to report positive drug tests and look back at least three years to identify drivers prohibited from operating a commercial motor vehicle because of a drug or alcohol infraction.

Some municipalities, including NYC, have passed laws prohibiting employers from conducting pre-employment drug testing for marijuana and tetrahydrocannabinol (THC) with exceptions. Philadelphia recently enacted a law prohibiting most employers in the city from testing new hires for marijuana use starting Jan. 1, 2022, with exceptions for safety-sensitive positions.

While a positive reading for the presence of THC remains a termination offense at businesses in many states, New Jersey and New York recently approved recreational marijuana laws that include employment protections for off-duty lawful use.

Given the rising possibility of a positive test and a changing landscape of recreational marijuana laws, some employers have decided to stop post-offer/pre-employment testing for cannabis. These trends, however, do not appear to affect post-accident testing by employers. Employers have a right to test for drugs if there are reasonable grounds to suspect that an employee was impaired and the policy is enforced equitably. In 2020, pre-employment marijuana positivity was 3.7 percent and post-accident 6.4 percent, suggesting marijuana may have been a factor in incidents prompting the drug test. The accommodations and foodservice sectors and retail trade had the highest positivity rate (6.2 percent).

The problem for employers is that impairment, because of marijuana, can be difficult to prove. There isn't a widely accepted and proven test to detect real-time cannabis impairment. Employees and insurers should continue to augment post-accident testing with eyewitness accounts and other evidence of an injured worker's behavior and possible drug use.

While it's clear that drug testing must continue for safety-or security-sensitive positions that are subject to drug testing regulations, employers need to decide what to do about employees not subject to the drug testing regulations nor in safety-sensitive positions. Although legislation and case law will provide some guidance, it is limited, and the burden remains on the employer to decide what, if any, changes it will make to drug policies.

What employers can do

• If you haven't done so recently, review your drug policies and employee handbooks with legal counsel to ensure they comply with current laws. In states that have legalized cannabis, discontinue references to "illegal" drugs. Employers don't have to tolerate on-the-job impairment, even if a worker is using marijuana for medical reasons, and workplace policies should clearly state so. Stay abreast of future changes in legislation and case law.
• Determine if marijuana policies will be differentiated from other drug policies. Consider the industry, brand, the attitude of the workforce, the possible impact on hiring and retention, and insurance implications. As recreational marijuana usage grows, employers are likely to encounter more pushback from employees, and it's important to begin the discussions now.
• If policies are changed, determine if job descriptions need to be altered. Communicate the changes, including a detailed description of the circumstances under which a drug test will be required, clearly to all employees.
• If pre-employment drug testing includes marijuana and testing positive may disqualify an applicant from employment, notify prospective employees.
• Review the options for modifying the test panel with the drug testing provider. Understand what test results mean.
• Ramp up reasonable suspicion training, which focuses on identifying impairment, for supervisors. Don't rely on positive drug tests alone to document impairment.
• Enhance access to an employee assistance program or substance abuse professional to retain good employees and mitigate the risk. Consider self-admittance policies, which allow employees to admit a problem and seek help through the proper channels without negative implications.
• When dealing with an employee injury, know exactly what treatments your insurer will or will not pay for, including medical marijuana. Ensure that this is communicated clearly to the injured worker and physicians at the outset of the claims process.
• In states requiring reasonable accommodations for registered medical marijuana users, if an applicant or employee notifies you of medical marijuana use, consult with counsel to determine whether a reasonable accommodation is required.
• Discipline employees who attempt to work while under the influence of marijuana or use marijuana while at the workplace in violation of the employer's policies.