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Cannabis And The Workplace: How Legalization Impacts HR

October 3rd, 2024 | 4 min. read

By Keith Edwards

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It seems like every day, a new state legalizes recreational cannabis. As of March 2024, twenty-four states and the District of Columbia have legalized small amounts of marijuana for medical and recreational use, according to the Pew Research Center. In addition, three states—Florida, North and South Dakota—will vote on measures to legalize recreational cannabis, and one will vote on an expansion of their current medical marijuana laws—Arkansas—according to the Marijuana Policy Project. And if you’re a human resources manager, you may be struggling to keep up with how all these different regulations might impact your organization’s drug policies.

If this sounds like you, no need to sweat. Here at Payday HCM, we’ve seen several different companies tackle this exact issue. In fact, while we service clients nationwide, our home state of New Mexico legalized recreational cannabis back in 2021, with the law taking effect in 2022, according to the New Mexico Regulation and Licensing Department. This means we’ve had plenty of time to become experts on all things cannabis—all things related to cannabis laws and regulations and how it impacts businesses, that is.

In this article, we’ll go over everything you need to know when it comes to legalized marijuana and human resources. We’ll discuss the various impacts these policies have on your organization, from drug screening policies to workplace safety. By the end, you’ll understand all there is to know regarding legalized cannabis and the workplace so that you can guide your organization to success.

In this article, you will learn:

Legalized Cannabis And Workplace Drug Policies

The first thing to look at when it comes to legalized marijuana is your organization’s drug policies. You’ll want to make sure these are updated to ensure proper action in situations regarding legalized marijuana.

Mandatory Drug Screenings

Depending on your organization, the first thing that might come into question is whether you require mandatory drug screenings. According to Statista, the range of percentage of people who have used cannabis by state ranges from 13 percent all the way to 35 percent. Suffice it to say that drug screenings may not be the wholesale safeguard they used to be.

This doesn’t mean your company should stop performing drug screenings at the time of hire, but it does mean you might consider creating a more robust set of criteria. There are states—California, New York, and D.C.—that prevent positive marijuana tests from affecting employment, so ensuring your policies comply with your state’s regulations is crucial.

You also have individuals who use cannabis for medicinal purposes, which complicates the matter only further. Ultimately, this needs to be a discussion between your organization’s leadership team so that your policies best reflect your company's needs.

Allowing Use And Defining Impairment

Next, you’ll want to outline your use policies and define impairment. It is a must that these policies are clear and understandable and communicated to all employees.

As of 2020, around 3 million people were enrolled in medical marijuana programs, according to the Washington Post. Even still, it is still federally illegal, meaning those who use medical marijuana are not subject to accommodations under the Americans With Disabilities Act. Although, state anti-discrimination laws in states where cannabis is legalized can override this.

When it comes to use, not all people are necessarily impaired when using marijuana, especially when it's for medicinal purposes. That being said, impairment can still impact workplace safety, so it's important that your organization has specific guidelines and procedures for properly identifying and defining impairment so that proper action can be taken.

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Legalized Cannabis And Potential Impact On Workplace Safety

Even with its legalization, it's still important to look at the impacts that cannabis can have on workplace safety.

Does Cannabis Lead To An Unsafe Workplace?

Even with its legalization, there are still considerations in terms of marijuana and workplace safety. An article published in the Journal of Occupational and Environmental Medicine found that there is a likely statistical correlation between marijuana use and workplace accidents.

The Centers for Disease Control cites a study performed by the National Institute on Drug Abuse found that employees who tested positive for marijuana had 55 percent more industrial accidents and 85 percent more injuries. However, the CDC also acknowledges that the data on this subject is limited.

Ultimately, if you are operating a safety-sensitive organization, you’ll want to take special care when it comes to policies regarding cannabis use. Again, this will largely fall on having specific guidelines that define impairment.

Potential Benefits To Workplace Safety

Even with the negative considerations surrounding legalized marijuana, there are still some potential upsides to its position within the workplace. Firstly, there’s the consideration of the types of things medical marijuana can be used to treat.

The National Library of Medicine lists chronic pain as one of the biggest ones, meaning there is the potential for some employees to work better if using medical marijuana to help treat their pain.

There’s also a potential benefit when it comes to worker’s compensation. According to Business News Daily, worker’s comp claims decreased by about 7 percent in states with medical marijuana programs.

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Understanding State And Federal Regulations On Marijuana

Knowing the different laws and regulations surrounding cannabis on a federal and state level is crucial to creating a coherent and functioning workplace policy.

Federal Regulations And Their Impacts

As previously stated, marijuana is still federally illegal, meaning that navigating what is and isn’t allowed can be complicated in states where marijuana is legal. As we mentioned earlier, the ADA is a federal law, meaning workers can claim accommodations based on it. If your state has state-level anti-discrimination laws, however, this may change.

There are also broader considerations to keep in mind. According to Bloomberg Law, certain federal contractors and all federal grantees must guarantee a drug-free workplace when receiving a federal contract or grant per the Drug-Free Workplace Act of 1988.

State Regulations And Their Impacts

On a state level, you’ll largely need to ask yourself whether cannabis is legalized in your state. From there, you’ll want to go about crafting your workplace policy around that. You’ll want to focus on defining impairment and outlining use policies.

Unfortunately, much knowledge is still missing when it comes to assessing impairment. As legalization continues to become more popular, this may change, but for now, organizations should focus on complying with the laws that currently exist and creating policies that benefit their company.

Getting High On Human Resources

Navigating any type of federal or state regulation can be tricky, but when it comes to medical marijuana, the water can be especially muddy. This is especially difficult when it comes to examining how these things can impact your organization and your workplace. You want to make sure that your policies benefit everyone, but you also want to ensure you’re doing what’s best for the company. It’s a tricky balancing act, but one that this article will hopefully help you achieve.

Of course, securing compliance with legalized cannabis isn’t the only regulation you’ll need to make sure you’re compliant with. Check out our article on the Affordable Care Act to ensure your company is compliant with all government regulations.

Keith Edwards

Keith Edwards is a graduate of the United States Military Academy at West Point and a former U.S. Army Captain. He has over 34 years of leadership experience in government, financial services, manufacturing, retail, and non-profit organizations. He assists businesses in improving the bottom line through increased efficiency in payroll processing, time and attendance, employee benefits, and human resources. His goal is to allow your business to focus on revenue-producing activities instead of non-revenue-producing activities to allow business leaders to sleep better at night knowing they are protected from threats related to compliance and tax/financial issues in the areas of payroll and HR.