Recreational Marijuana Is Now Legal in California: How Does This Affect Employer Workplace Drug Policies?

In what might once have been viewed as a remarkable development, but now generates little surprise, recreational marijuana use is now legal in California. On November 9, 2016, Californians approved Proposition 64, known as the Control, Regulate and Tax Adult Use of Marijuana Act (the Act), legalizing the recreational use of marijuana. Contrary to California’s typical position as a legislative frontrunner, the Golden State is bit more of a follower here, joining several other states, including Colorado, Oregon and Washington, where the personal possession and use of marijuana has already been decriminalized. Maine, Massachusetts and Nevada also recently passed recreational use laws, which have not yet taken effect.

Impact of the Control, Regulate and Tax Adult Use of Marijuana Act

The Act amends, repeals, and adds sections to California’s Business and Professions Code, the Food and Agricultural Code, the Health and Safety Code, the Labor Code, the Revenue and Taxation Code, and the Water Code. The Act does not alter California’s existing medical marijuana law, the Compassionate Use Act of 1996.

The Act legalizes recreational marijuana use for adults aged 21 or older under California state law and establishes certain taxes on the cultivation and sale of nonmedical marijuana, including marijuana products. While the recreational use provisions are effective immediately, other tax and licensing provisions of the law will not take effect until January 2018.

Under the Act, it is legal to smoke marijuana in a private home or at a business licensed for on-site marijuana consumption. Smoking marijuana remains illegal while driving a vehicle, in all public places, and anywhere smoking tobacco is. The law makes it legal to possess up to roughly one ounce of marijuana; however, possession on the grounds of a school, daycare center, or youth center while children are present remains illegal. Individuals are permitted to grow up to six plants within a private home, as long as the area is locked and the plants are not visible from a public place.

Marijuana businesses will need to acquire a state license to sell marijuana for recreational use and local governments can also require businesses to obtain a local license and can restrict where such businesses can be located. Local governments are also allowed to completely ban the sale of marijuana from their jurisdictions.

What the Adult Use of Marijuana Act Means for California Employers

Marijuana (whether for medical or recreational use) remains illegal under federal law. This is the foundation for understanding how California’s recreational and medical marijuana laws affect—or don’t affect—employer policies. In short, employers can continue to rely on federal law and enforce their workplace substance abuse policies. Also, the Act itself explicitly allows public and private employers to enact and enforce workplace policies pertaining to marijuana, including any drug-testing policies.

Nothing in the Act is intended to affect or interfere with the rights and obligations of employers to maintain a drug-free workplace or to require an employer to accommodate the use or possession of marijuana in the workplace. Employers may continue to have policies prohibiting the use of marijuana by employees and prospective employees, and the Act does not prevent employers from complying with state or federal law.

In California, employers can require job applicants to pass a drug test as a condition of employment, provided they test all applicants for particular job positions and do not single out certain applicants based on protected characteristics. Drug tests performed after an individual has been hired are permissible if there is reasonable suspicion that the worker is under the influence, in certain safety-sensitive jobs, or pursuant to a narrowly-tailored, post-accident testing policy. In the case of a positive drug test, California employers have the discretion to not hire an applicant, or to discipline an employee, up to and including termination of employment. This is the case even if the individual has been prescribed marijuana due to a medical condition. In the 2008 case, Ross v. RagingWire Telecommuns., Inc., the California Supreme Court upheld the right of an employer to fire an employee who failed a pre-employment drug test as a result of marijuana use recommended by his physician. The court found that employers are not required to accommodate an employee’s medicinal marijuana even though such use was legal in California under the Compassionate Use Act of 1996. (It seems logical that the Ross v. Ragingwire decision might be tested on appeal down the road, but for the present, it is good law.) Likewise, the legalization of recreational marijuana use under the Control, Regulate and Tax Adult Use of Marijuana Act does not require employers to accommodate such use by their employees.

Further, any employers who contract with or receive grants from the State of California are required, under California’s Drug-free Workplace Act of 1990 to certify that they provide a drug-free workplace.

Similarly, any employers who enter into a federal contract for the procurement of property or services valued at $100,000 or more, or receive any federal grant, must follow the regulations of the Drug-Free Workplace Act of 1988.

What Actions, if Any, Should Employers Take?

While the Act does not prevent employers from continuing to rely on federal law and enforce their workplace substance abuse policies, in light of California’s recent legalization of recreational marijuana use, employers may want to consider updating their policies to clarify any expectations with respect to employee marijuana use—but again, this new law should not meaningfully impact such expectations or policy.

What Action Might the Federal Government Take, Given that Marijuana Remains Illegal Under Federal Law?

This is very much an open question. Despite frequent calls for changes to the federal Controlled Substances Act of 1970 (the CSA), marijuana remains a “Schedule 1” banned substance. The issue, then, is not so much any contemplated change in the CSA, but enforcement of it (or not). Although the Department of Justice (DOJ) under President Obama has not prosecuted most individuals and businesses following state and local marijuana laws, it remains to be seen whether the DOJ’s approach will change under the Trump Administration. Even if the Trump Administration’s DOJ does change its approach, however, and increases enforcement efforts, this likely will not impact employer drug-related policies for the reasons discussed above.

-Erin Dolly

Changes Afoot To The Minimum Wage In California

Today, the Los Angeles City Council voted 13-1 to make the City the largest in the United States to have a minimum wage to $15/hour, a raise which will fully go into effect in 2020. Currently, the minimum wage is $9/hour and it will rise to $10.50/hour on July 1, 2016 for private employers with 25 or more employees (employers with fewer than 25 employees will have an extra year to comply). Continue reading

E-Cigarettes Banned In Some California Workplaces

Electronic cigarettes are battery-operated devices that emit vaporized doses of nicotine (or non-nicotine) that is inhaled.  The vapor produced by e-cigarettes is smokeless and does not contain the amount of harmful chemicals that regular cigarettes have.  Many fans of electronic cigarettes credit these devices with helping them to cut down on or quit smoking altogether. Continue reading

San Francisco Employers Should Prepare For January 1, 2014 Changes To Family Leave Laws

Last week, the San Francisco Board of Supervisors approved an ordinance that requires employers to consider workers’ requests for flexible work arrangements and predictable work schedules due to caregiving responsibilities.  The ordinance also prohibits discrimination based on an employee’s status as a caretaker or parent.  Edwin M. Lee, the City’s Mayor, has stated his intention to sign the measure into law, which is set to take effect January 1, 2014.

Continue reading

Domestic Workers Get Overtime In California Starting January 1, 2014

Among the various wage-related legislation Governor Brown signed into law recently is a provision that will allow housekeepers, nannies, caregivers and other domestic workers in private homes to collect overtime pay.  Specifically, A.B. 241, titled the Domestic Worker Bill of Rights, provides that domestic employees will now be eligible for overtime at one and one-half times the employee’s regular rate if the employee works more than nine hours in a day or more than 45 hours in a week.

Continue reading

Governor Signs California Minimum Wage Increase Into Law

As expected, Governor Brown signed legislation to raise California’s minimum wage today.  The new law raises the minimum wage to $9 per hour on July 1, 2014 and to $10 per hour on January 1, 2016.  Thus far, it is the only bill to be passed into legislation this year that the California Chamber of Commerce designated as a “job killer.”  Employers should be aware that the minimum wage increase will also affect the minimum salary that can be paid to employees to make them exempt from California onerous overtime requirements.  In order to be exempt from the overtime laws, employees must be paid a monthly salary equivalent to no less than two times the state minimum wage for full-time employment.

- Amy Durgan

The California Minimum Wage Is About To Increase

Last week, the California Legislature voted to increase the state minimum wage to $9.00/hour by July 2014 and to $10.00/hour by January 2016.  The bill passed both the Assembly and the Senate by significant majorities and Governor Jerry Brown supports it. Unless other states increase their minimum wage, California will have the highest minimum wage in the country.

In some areas, city ordinances already make the minimum wage higher than this bill.  In San Francisco, the minimum wage is $10.55/hour and in San Jose it is already $10.00/hour.

The minimum wage increase will also affect the minimum salary that can be paid to employees to make them exempt from California onerous overtime requirements.  In order to be exempt from the overtime laws, employees must be paid a monthly salary equivalent to no less than two times the state minimum wage for full-time employment.

We will keep you updated on any further developments with this law.

- Dan Handman

After Brief Confusion, Certainty Restored: Sexual Harassment Need Not Be Motivated By Sexual Desire

By signing Senate Bill (SB) 292 into law, California Governor Jerry Brown memorialized the seemingly non-controversial proposition that sexual harassment plaintiffs suing under the Fair Employment and Housing Act (FEHA) are not required to show that the harasser acted out of sexual desire.  The new amendment to FEHA, effective January 1, 2014, was singularly focused on overturning the 2011 California Appeals Court opinion in Kelley v. The Conco Companies, 196 Cal.App.4th (2011), which, despite favorably citing seminal decisions on same-sex harassment and the role of gender in sexual harassment cases, strayed far from established jurisprudence.

Continue reading

New “Job Killer” Bills On The Horizon

It’s as much a Spring rite of passage as Opening Day in baseball or Tax Day: the California Chamber of Commerce’s annual list of “job killer” bills.  Ever since Arnold Schwarzenegger wielded his hefty veto stamp, this list has gotten the attention of employers throughout California.

And this year is no different.  The Chamber identified six bills which would add to the bevy of employment-related obligations on California employers.  Among them:

  • AB 10, which would increase the minimum wage by $1.25 to $9.25 over three years and thereafter increase the minimum wage based on inflation;
  • AB 1138, which would require employers to post a list of all persons covered by worker’s compensation insurance and which would allow a private right of action (and undoubtedly significant exposure in a class action or PAGA lawsuit) to any employer who maintains an inaccurate list;
  • SB 404, which would amend the Fair Employment and Housing Act to prohibit discrimination against individuals based on their “familial status,” namely whether they provide care to a family member;
  • SB 761, which would make it unlawful for an employer to retaliate against an employee because she has sought Paid Family Leave from the state-administered fund;
  • SB 626, which would significantly increase the cost of worker’s compensation premiums on employers and the amount of potential awards to worker’s compensation claimants; and
  • AB 5, the so-called “Homeless Person’s Bill of Rights, which would amend the Unruh Act to prohibit discrimination against homeless persons to various public accommodations.

To be sure, most of these bills stand little chance of passage, even in a Legislature dominated by Democrats.  With California’s unemployment rate officially at 9.6% (a full 2.0% higher than the national rate), Governor Jerry Brown has been reluctant to add to the burdens already imposed on California employers.  Indeed, none of the eight “job killer” bills identified by the Chamber in 2012 were signed into law and Governor Brown vetoed two of them.  We will keep you posted periodically about the status of these bills.

- Dan Handman