What Happens Now?

Change comes with every Presidential election and this one could be seismic. Naturally we began questioning, what does this mean for employment laws? What will happen to the Affordable Care Act? What will happen with the new overtime rules? Should businesses ignore the December 1 deadline and just wait to see what happens next?

For Massachusetts employers, and 25% of the country, employees will now have access to legal recreational marijuana. How will the workplace be affected?

While we cannot read the future, we spend much of our time watching laws change and examining legal trends. Here are our predictions and advice for weathering the coming changes.

The Overtime Rules

As a threshold matter, Donald Trump will become the President on January 20, 2017, after the new overtime rule takes effect. Although Mr. Trump’s Secretary of Labor will likely roll back many of President Obama's employment-related initiatives, the breadth of these changes remains to be seen. Mr. Trump has not released a specific policy or position, although he told Politico in August that he favors "a delay or a carve-out of sorts," but only for small businesses. This is far from a guarantee.

As we have advised over the last year, the FLSA White Collar exemptions actually consist of a 3 part test. Employees must receive a salary of at least $455 per week (rising to $913) per week; they must receive the same salary no matter how many hours they work; and they must pass a strict duties test. The new FLSA rule set to take effect December 1, 2016, addresses only the minimum salary level of the test.

In late September, two lawsuits were filed in federal court in Texas, and legislation that would delay the effective date of the rule until June 2017 passed the U.S. House of Representatives. None of this legislation will pass into law before the new rules go into effect. As for the lawsuits, there is a hearing next week in an action to challenge the rule. It is possible that the judge will issue an injunction at that time, although the judge hearing the case is a President Obama appointee. This means that it is more than likely that on December 1, 2016, by law, all exempt position must receive a salary of at least $913 per week.

As a quick reminder, under the FLSA non-exempt employees who are improperly classified will be owed back wages and liquidated damages (these are wages doubled), and the auditing agency or court will look back two years to determine the overtime owed. If they believe the employer intentionally misclassified employees, that period extends to three years. Add to that Massachusetts law, which entitles employee to treble damages. These are not small penalties and often result in fines in the tens or hundreds of thousands of dollars.

For this reason, we advise all of our clients to comply with the new overtime rules on December 1. If the new administration changes the rules, these employees can always be reclassified as exempt.

Affordable Care Act

Mr. Trump and the Republicans in Congress have stated that they will seek to repeal ObamaCare within Trump's first one hundred days in office. There are roughly 1,000 pages of the ACA and its related provisions. A full repeal will be incredibly difficult, but it is possible. It does look like Mr. Trump’s intention is to replace the ACA with some other program, which means 2017 should be interesting for employers. Mr.Trump has also stated he would keep the pre-existing condition mandate and the dependent insurance eligibility until age 26, which sounds a lot like...ObamaCare.

Marijuana Use

When is a gummy bear just a gummy bear with recreational pot shops coming to Massachusetts in 2018? How to prepare your workplace? Here are some things to know when it comes to creating policies on marijuana use:

1. There is not an accurate test for marijuana intoxication. An employee who uses marijuana outside of work (even the day before) will likely fail a blood test, even if the use was totally outside of work, and he was not intoxicated at the time of testing. Given the legalization of medical marijuana in particular, this has resulted in a number of lawsuits. There is a case working its way through Massachusetts' court system now on this topic.
2. Although marijuana has now been legalized in a number of states, it is still considered a 'controlled substance' under federal law. As such, at least for the time being, marijuana use remains illegal under federal law. Thus, any federal employer or private employer that receives federal monies may have to conduct testing under federal guidelines.
3. Finally, only New Hampshire and Arizona have laws protecting medicinal marijuana use and preventing employers from discriminating against marijuana users. This will likely change now that MA and CA have legalized marijuana.

So, what does all of this mean? In the states that have legalized marijuana, there have been lawsuits filed by employees who have been terminated after a positive drug test. The outcome of these cases has been surprisingly consistent, and thus far give employers a fair amount of latitude when it comes to drug testing and terminating employees for marijuana use. This has been true even in states where marijuana use is legal. However, the courts up to this point have relied on the fact that marijuana remains illegal under federal law as a major justification for their decisions.

Now that legal access to recreational marijuana exists in several states, it is likely the federal government will have to look seriously at declassifying marijuana as a Schedule 1 drug. This, in turn, will likely influence legal decisions.

Although the Massachusetts recreational marijuana law does not directly alter the law in the state on employer drug testing, it definitely makes sense to review your drug testing policies in light of the new law. At a minimum, policies that call for termination or other discipline for an employee's use of “illegal” drugs may need to be revised, given that it is no longer illegal for adults to use marijuana in Massachusetts.

As to the amount of marijuana use leading to a termination, Colorado and Washington, which legalized recreational use of marijuana, pegged the level of impairment at 5 nanograms of active tetrahydrocannabinol (THC) based on a set amount of blood. Pennsylvania set a 1 nanogram threshold; Nevada and Ohio opted for 2 nanograms. States are all over the map because setting a specific impairment threshold with THC is not as clear-cut as it is with alcohol. THC can remain in a person's system for days and weeks. That means blood tests alone are unreliable.

In 2014, after marijuana was legalized in Washington, fatal crashes where the driver was found to have THC in his/her blood doubled from around 8% to 17%. Now that so many states have legalized marijuana, the U.S. is going to be forced to find a national standard for sobriety that is based on real science. However, until that happens, testing for marijuana use will continue to be problematic.

Recommendations

Private employers have latitude in terms of behavior they can regulate in the workplace. Just as you can prohibit employees from having alcohol in the workplace, you can prohibit them from possessing or being under the influence of marijuana in the workplace.

Where your testing is limited to reasonable suspicion testing, your risk of an employee claim of wrongful termination based on a positive drug test is much lower than if you conducted random tests. Although an employee may dispute the validity of your test, if you also have documented reasonable suspicion that an employee was under the influence while at work, you will be able to show that your action as an employer was based on a reasonable and good faith belief that the employee was a danger to him/herself or others.

As for smoking, you can continue to prohibit smoking marijuana and/or ingesting marijuana just as you can prohibit smoking cigarettes or drinking alcohol.

What About the Rest?

Without question our clients should expect some change in the employment law landscape with the new administration, and it will likely be more employer friendly. However, as we observed during the election, Mr. Trump has shifted positions on many issues, many times. His appointments to the DOL, the EEOC, NLRB, and OSHA, not to mention the Supreme Court, will be far more telling of the direction of employment related laws in the coming years.

Questions? We can help. 508-548-4888