Book a demo

(Part two of a three-part series. Don’t miss part one and part three.) 

Could One of These “Icebergs” Sink Your Clients’ Ships – or Even Your Own?

Everywhere you turn, you are hearing about new laws, regulations and other issues that increase the complexity of having employees. This escalation impacts you (the recruiter), your clients, and your candidates in a myriad of ways. After all, in today’s employment world, you do more than just source candidates for your clients: Recruiters play an important role when it comes to staying abreast of the changing employment world and the hot-button issues that may negatively affect employers.

When people refer to hot-button employer issues, the topic that immediately springs to mind is the Affordable Care Act (ACA). It’s an important issue that affects everyone in every state, and it is the cause of numerous changes in most companies’ policies, finances, and staffing decisions. Due to ACA compliance requirements, the administrative, legal, and financial burdens on employers are getting exponentially more difficult.  Navigating these requirements is vital to the survival of any employer. However, if you’re only focused on this one issue, you may be missing the less obvious “icebergs” that could sink your clients’ ships—or, if you are running your own back-office for contract staffing, even your own.

Let’s take a look at two lesser-known issues that are currently affecting many employers in 2015 and will affect more in 2016 and beyond:

1) Paid sick leave laws, and
2) Marijuana and the workplace.

Paid Sick Leave (PSL) Laws
The lack of mandatory PSL laws at the federal level may have left you unaware of this growing employer issue. However, this issue is making its way across the country with new cities and states being added monthly.  Currently, three states [CT, CA, & MA] have statewide PSL mandates in place, while another twenty-three states [AK, AZ, FL, HI, IL, LA, MD, MI, MN, NE, NH, NC, NJ, NV, NY, OR, PA, SC, SD, VA, VT, WA, & WV] have the issue under legislative consideration.  At the local level, twenty-two cities nationwide currently have PSL laws with a constantly increasing number of cities considering implementation.

While paid time off for illness is a great benefit to employees, it is not so cut-and-dried for their employers, or for recruiters who place W-2 employees on contract assignments and run the back-office themselves. For starters, the fact that these laws mandate rates of accrual for earned PSL, accrual caps, effective dates, maximum accruals, and so forth means that employers must create PSL policies that are at least as generous as the applicable law, regardless of whether that is financially feasible for the employer. And that is just the tip of the iceberg.

For a traditional direct-hire employer with one or a few locations, PSL is at a headache to track, document, and administer. For a recruiter or back-office service with employees scattered across the United States, tracking the new locations considering PSL is a herculean task.  It is a nightmare to ensure that you are in compliance with each city and statewide law and to implement a PSL system that meets all the requirements. Each law can have slightly different conditions, and compliance requirements include determining and offering the more generous of differing provisions if state and local PSL laws overlap. Paid sick leave laws are certainly some of the most complex new concerns facing employers at this time.

Medical Marijuana/Legalization of Recreational Marijuana
Two different marijuana-related scenarios are affecting employers: the 23 states that have legalized the non-criminal medical use of marijuana (with more on the ballot), and the legalization of recreational marijuana in CO and WA in 2014 and DC in 2015 (with OR and AK to follow in 2016). For any employer that operates in a location with legal marijuana usage, three concerns are most pressing:

Medical Marijuana. Legalization of medical marijuana first began in 1996, so the specifics of these laws as they relate to the workplace have had some time to surface in the courts. Thus far only enacted at the state level, this evolving issue is most complex for multi-state employers.

  1. What are your legal rights to enforce a drug-free workplace policy? Of the jurisdictions that have legalized medical marijuana, at least fifteen do not offer any form of employment protections. In lawsuits, “the courts have held that the medical marijuana statutes in their state only protect patients from criminal sanctions and do not create any civil remedies or protections.” This means that employers in states lacking employment protections of this sort could enforce a drug-free workplace policy without much worry of repercussions, as the state supreme courts have shot down all medical marijuana-related unfair dismissal suits to date. However, employers in CT, ME, RI, AZ, DE, and IL need to be cautious, as their state statutes (at minimum) grant medical marijuana patients protected status and prohibit employer discrimination merely due to an employee’s status as a medical marijuana patient.
  1. What is your liability/risk if you terminate an employee for medical marijuana use? Even in states where employment protections are not offered, you run the risk of being sued. However, as stated above, no case of this nature has yet been successful. In most cases, it comes down to the fact that marijuana is still illegal under federal law. Employers may run into difficulties if they terminate employees for whom they had no suspicion of on-premises or on-hours impairment, as this could violate their state’s “lawful activities” statute depending on the specificity of the language.
  1. What employment decisions can you legally make based on drug screening results? If employees work on a federal contract or for the Department of Transportation, you are subject to the Drug Free Workplace Act and should continue drug screening according to the federal specifications. Otherwise, be cautious about basing decisions on test results alone. Some jurisdictions require the employer to show that the patient used, possessed or was impaired by marijuana while on workplace premises or during the hours of employment. Drug screens do not measure THC (the psychoactive chemical in marijuana), but rather metabolites, and the longevity of marijuana metabolites in the body makes determining impairment impossible.

Recreational Marijuana. Employer liability relating to legal recreational marijuana is likely less serious since it is still federally illegal and marijuana is on par with alcohol in these cases. Just because it is no longer criminal in some states does not mean it is acceptable to possess, use or be impaired by marijuana in the workplace. Of the five locations that have so far legalized recreational use, at least three grant employers the right to prohibit marijuana use in the workplace. However, employees will likely raise suits to test the limits of these new laws as they pertain to off-duty usage, and time will tell what the courts may decide. (Note: The rules for federal contractors and others governed by federal policy still apply here.) 

  1. What are your legal rights to enforce a drug-free workplace policy? As long as the policy is well-communicated to employees, enforcement is consistently applied, and the necessary measures are taken to document suspicion or proof of impairment according to your specific state’s statutes, you should still be able to maintain a drug-free workplace policy.
  1. What is your liability/risk if you terminate an employee for recreational marijuana use? Again, as long as the use or impairment is on company time or premises, it is against established and communicated policy, and disciplinary measures are consistently enforced, you are within your rights to terminate based on marijuana use in the workplace. If you terminate based on outside/off-hours activity, you may run the risk of a successful suit based on “lawful activities,” depending on the state’s specific statute language.
  1. What employment decisions can you legally make based on drug screening results? Pre-employment screenings ought not to be affected. However, random screenings may get you into hot water. Due to the length of time metabolites stay in the system, experts say there is no way currently to gauge impairment from marijuana. Therefore, proving that the activity/impairment took place during work hours cannot come down to a drug screen alone. Dismissed employees will likely try this argument in the courts.

One note regarding drug screening: According to the Society for Human Resource Management (SHRM), ME, MN, RI, and VT prohibit employers from terminating workers who test positive for illegal drug use for the first time. In these states, regardless of the federal or state-level status of marijuana, be careful to follow the law when drug testing current employees.

Burden is Growing
With the ACA a nationwide consideration, along with the rapid growth of PSL laws and marijuana legalization, the burden of being an employer is growing. It has the potential to put some companies out of business, but remember that client companies and recruiters have options: Consider outsourcing the administrative, legal, and financial details of being a W-2 employer to a back-office service like FoxHire, LLC. (FH).

Disclaimer: This article is for informational purposes only and should not be construed as legal advice.

You may also be interested in…

Article

Innovation in Staffing: A Back Office Revolution for Staffing Agencies

In today's dynamic business landscape, staffing agencies play a crucial role in...

Case study

New Zealand Based Company Expands to USA with FoxHire

How can an international company expand to America and hire new employees?...

Webinar

Why Contract Staffing Should Be in Your Playbook

Are you a direct hire recruiter looking to grow your business? Contract...

A complete Employer of Record (EOR) platform for onboarding, payroll, and compliance – so you can hire without the hassle.