As more and more states opt to legalize marijuana, the overall uptick in cannabis use in the U.S. is prompting a growing number of companies to reconsider drug testing policies for job applicants. With Americans increasingly turning to cannabis, whether for recreational or medicinal purposes, employers are left trying to find the middle ground between attracting and retaining a qualified workforce with potential safety risks and liabilities.
Since 2012, when Colorado and Washington were the only states where recreational marijuana was legal, 21 other states – including New Jersey – along with the District of Columbia followed suit. Additionally, the Garden State is among the 38 states, along with D.C., that legalized medicinal cannabis.
Amid shifting societal attitudes regarding cannabis and greater efforts to build a more diverse workforce, companies are generally shifting away from hiring rules that date back to the “Just Say No” era of President Ronald Reagan. After Reagan’s 1986 executive order prohibiting federal workers from using narcotics, the private sector followed the government’s lead in pursuing drug-free workplaces.
Within four years, nearly 46% of companies with more than 250 employees were drug testing existing workers and new applicants, up from just under 32% in 1988, according to the U.S. Bureau of Labor Statistics. By 2022, that number fell to 16% of private sector employers, the BLS reported.
Among the companies that phased out pre-employment screening is the nation’s largest employer, Amazon, which in 2021 said it made the decision based on data showing that such testing “disproportionately impacts people of color and acts as a barrier to employment.”
For some industries, like construction, manufacturing, utilities and transportation, pre-employment marijuana screening remains mandatory and is unlikely to change anytime soon, especially since the substance remains classified as a Schedule I narcotic by the federal government.
For companies outside of those industries that choose to continue drug testing, many are shifting their focus from pre-employment screenings to testing after a workplace accident, at random or if there’s suspicion any employee is under the influence.
Significant developments in the cannabis industry from around the state
“What I’m seeing, reading and hearing about is that these companies are essentially taking the path of least exposure because it could get expensive to go down that rabbit hole if there are claims of discrimination, etcetera,” said Michael Warech, a managing director and human resources advisory practice leader with Centri Business Consulting. “And then some of these damage awards could be significant – future wages, benefits, statutory penalties, attorney’s fees, etc.
“And the end of the day, what you’re seeing are companies saying ‘Why would I do that at this point? Let’s just focus on the job performance or potential impaired job performance and save the testing for that situation,” added Warech, a Morris County resident working from Centri’s Manhattan offices.
“For good measure, you can also throw in the fact that the labor market is tight and these well-documented talent shortages are putting these companies in situations where they’re trying to balance the need for talent while committing to maintaining a safe and engaging work environment for everybody,” Warech said.
He recalled a health care company in New Jersey that opted to eliminate marijuana from its pre-employment screenings. Before the change, the business found many candidates who received conditional job offers withdrew their names from consideration after human resources informed them cannabis testing was part of the process.
“Now, after they tell them there’s no marijuana piece, the no-show rate dropped significantly,” he said.
Jill Turner Lever, an attorney with Newark-based Sills Cummis & Gross PC’s employment and labor practice group, agreed that more businesses are reevaluating.
“Many companies are struggling with these issues and are reconsidering how to handle cannabis,” she said. “Multi-state employers are also considering how best to establish a consistent policy, given the patchwork of state laws in this area, plus the fact that cannabis is currently still illegal under federal law.”
Without a national policy standardizing legal access to cannabis, usage and drug testing are decided on a state-by-state basis with federal guidelines used as the minimum standard.
Depending on the state law, employers can choose to drug test with very few restrictions, or business owners must be in specific industries to screen applicants or workers. Under the law in New Jersey – where adult-use marijuana has been legal for over a year and medicinal cannabis has been allowed for the last decade – it’s up to employers whether they choose to test applicants and workers.
In addition to pre-employment screening and regular screening of current employees, New Jersey companies can test workers under several circumstances, including if there’s suspicion of using while on the clock, observable signs of intoxication, after a work-related accident or randomly.
However, the law also contains restrictions, Lever pointed out. “At this juncture, a positive test for cannabis may place an employer in a difficult position because employers cannot take adverse action against a candidate or employee ‘solely’ due to the presence of cannabinoid metabolites in the employee’s system or ‘solely’ because the individual is a registered medical cannabis user,” she said.
“In addition, a positive test for a candidate who is using medical cannabis potentially may reveal information about the individual’s medical condition that the employer may be better off not knowing, as this could increase the potential risk of a disability discrimination claim or lead to a request for ‘reasonable accommodation.’ In addition, cannabis lingers in an individual’s system, and the current tests are not able to determine if the individual is currently impaired,” Lever said.
And since neither the medicinal or recreational cannabis laws in New Jersey include “an express exception for safety sensitive positions,” Lever said that “has created a great deal of uncertainty for employers.”
“The recreational use law does appear to still permit employers to conduct random testing, which is generally allowed in New Jersey for safety sensitive positions under common law principles. However, given the lack of a specific safety sensitive exception, it appears that those safety sensitive employees effectively would still be protected under the New Jersey cannabis laws absent evidence of impairment on the job. Many employers are struggling with these issues and are trying to balance complying with applicable laws and maintaining a safe workplace,” Lever explained.
New Jersey’s regulations regarding employee testing are only being made more challenging by the fact that the way work has evolved, as well as lack of clarity from the New Jersey Cannabis Regulatory Commission’s standards for its Workplace Impairment Recognition Expert (WIRE) certificate.
In September 2022, the CRC released interim guidance outlining how employees should address workers’ suspected cannabis impairment while on the job, which describes the “best practice” for employers to be establishing “evidence-based protocols for documenting observed behavior and physical signs of impairment to develop reasonable suspicion” that would warrant requiring “a drug test to verify whether or not an individual has used an impairing substance in recent history.”
“So normally, I think you’d say, ‘OK, this employee is falling over, slurring his speech or has spotty attendance,’ so you’d bring in a WIRE, who is supposed to observe that performance or suspected impairment. And then, at that point, suggests that a drug test be taken,” Warech said.
“My concern is a lot of people now work remotely, so if somebody’s smoking marijuana at home is that considered the workplace? Should those WIRE experts be examining incoherent emails?” he said. “I think that the model or the lens that most people think about is alcohol – and watching somebody slurring their speech and so forth. Then, you can give them a test at that point, which will immediately indicate the level of intoxication.”
“The problem with marijuana is that there is no such test that you can give in real time that’s going to be able to tell you how intoxicated somebody is, so that presents a whole other issue,” Warech said.
The problem with marijuana is that there is no such test that you can give in real time that’s going to be able to tell you how intoxicated somebody is, so that presents a whole other issue.
– Michael Warech, Centri Business Consulting
However, he believes testing will eventually become “a little more refined” to tell the difference between someone who took an edible three days ago at home compared to an individual who smoked a joint before walking into the office.
Ultimately, companies in New Jersey can fire employees for being impaired on the clock, but cannot terminate a worker just for failing a drug test, according to the CRC guidance.
Although the pandemic accelerated many companies’ shift to remote work, whether 100% of the time or on a hybrid schedule, Warech believes some employers still don’t trust their workers at home.
“You have to boil it down to, ‘Look, these guys and gals are professionals, they know what their jobs are and if they’re going to be working in my company, I have to give them their resources and what they need to be successful. And, they know what to do,’’ he said.
“It’s not about getting into personal lives and if they’re indulging outside of work at the end of the day. All an employer should know is if they’re being productive at work,” he said. “Now, if somebody takes a left turn or right turn off the path at work, where they’re putting the firm in jeopardy, they’re putting themselves in jeopardy, their fellow employees in jeopardy and it looks like there’s some reasonable suspicion that somebody’s intoxicated, an employer should step in because they owe it to the employees to maintain a safe environment.”
Then, the issue becomes, what exactly should a WIRE be looking at, Warech said.
It’s not about getting into personal lives and if they’re indulging outside of work at the end of the day. All an employer should know is if they’re being productive at work.
– Michael Warech, Centri Business Consulting
“Is it behavior happening in real time versus observing work product?…That’s the next frontier, I think. Now, we’re moving into is it or is it not impacting any significant way the performance on the job? And how are we going to reliably make those determinations as to whether or not something is actually going on ‘on the job,’” Warech stated.
Ultimately, Warech said it comes down to having a clearly defined policy. “I think that’s where companies get into trouble – if they don’t have one. They should work with their in-house legal team, if they have one, or seek outside counsel to make sure it’s not vague when it comes to symptoms of impairment or representations of impairment,” he said. “The company needs to decide what those things are, whether they’re visual or audible, etc. And, the important piece here is to apply them consistently.”
Lever said, “New Jersey employers still have the right to maintain a drug-free workplace … and may still prohibit possession, use of and/or intoxication by cannabis items during work hours or on the premises after work hours. … Accordingly, it is critical for New Jersey employers to implement a compliance policy, to train staff on the policy, as well as to train supervisors and managers on how to handle these complicated issues.”
A recent analysis by Secaucus-based Quest Diagnostics found that the percentage of U.S. employees who tested positive for cannabis following an on-the-job accident reached its highest level in 25 years.
Of the more than 6 million urine tests Quest analyzed for marijuana use in the general worker category — which excludes federally mandated, safety-sensitive workers such as pilots, truck drivers who undergo routine drug testing — 4.3% were positive, up from 3.9% in 2021.
That marks the highest number of positive test results for marijuana ever recorded by Quest during the 34 years it has analyzed workplace drug use data. The number of general workers who tested positive for marijuana following an on-the-job accident in 2022 was 7.3%, compared with 6.7% in 2021, the analysis said.
After a decline between the years of 2002 and 2009, post-accident marijuana positivity has steadily risen over the last decade, according to Quest.
In commenting on the new findings, Katie Mueller, a senior program manager at the National Safety Council focusing on cannabis safety, said the data provides “compelling evidence that increased use of cannabis products by employees can contribute to greater risk for injuries in the workplace.”
Mueller went on to note effects such as slowed reaction time along with impaired memory and driving skills. “It is imperative employers take the proper steps to create and maintain a policy that addresses cannabis use, build a safety-focused culture and educate the workforce to keep all workers safe on and off the job,” she stated.
Keith Ward, general manager and vice president for Employer Solutions at Quest, believes the “historic rise” suggests “changing societal attitudes about marijuana may be impacting workplace behaviors and putting colleagues at risk.”
Suhash Harwani, senior director of science for Employer Solutions at Quest, believes the numbers are a wake-up call for companies.
“Year-over-year and five-year data point to continuously higher workforce drug positivity overall, by industry, and across multiple drug categories. As employers express concern for employee health, wellness and safety, they may want to consider these data as a warning sign, particularly as a growing body of science demonstrates the risks of marijuana to mental and physical health,” Harwani said.