Cannabis: A Primer for New York Employers

December 6, 2021

In March 2021, the New York State Legislature passed, and then-Governor Andrew Cuomo signed, the Marijuana Regulation and Taxation Act (MRTA or the Act). In addition to legalizing the recreational use of marijuana in New York, the Act amends both the New York medical marijuana law and the New York Labor Law. These amendments significantly impact an employer’s rights and obligations vis-à-vis their employees’ use of marijuana. 

The MRTA

Broadly, the MRTA legalizes adult-use, i.e., recreational use, cannabis in New York State and establishes an Office of Cannabis Management (OCM) governed by the Cannabis Control Board. As it relates to employers, the Act makes changes to the Labor Law and generally prohibits adverse actions against employees who engage in off-site, recreational cannabis use. As affirmed by the OCM, “the law is not intended to limit the authority of an employer to establish policies and procedures prohibiting employees from being impaired by cannabis in the workplace, and employers are not required to engage in any conduct that would otherwise violate federal law or cause the employer to lose federal funding.” However, in practice, the law (1) effectively requires employers to engage in a wholesale reassessment of their current policies around use and testing, (2) codifies certain judicial holdings around medical use and (3) folds New York’s medical use law, the Compassionate Care Act, into the auspices of the OCM. 

Medical Use

Employees who are in the Medical Cannabis Program are considered automatically to be disabled and, as such, are protected from discrimination on that basis. This also means that employers are required to engage in the interactive process/cooperative dialogue when assessing the need for an accommodation for these employees. Note, to the extent an employer does not affirmatively know that an employee participates in a medical marijuana program, the suspicion that an employee is impaired at work (see below) may constitute a “reason to know” that an employee is disabled and may therefore trigger an employer’s obligation to engage in the interactive process/cooperative dialogue prior to taking any adverse employment action. 

Prohibited Conduct

The MRTA amends New York Labor Law § 201-D and makes it generally unlawful for an employer to take the following actions as a result of an individual’s use of cannabis pursuant to the MRTA, outside of work hours, off the employer’s premises, and without use of the employer’s equipment or other property:

  • Refuse to hire, employ or license someone

  • Terminate the employment of an employee

  • Otherwise discriminate against an individual in any of the following:

    • Compensation

    • Promotion

    • Terms, conditions or privileges of employment.

Exceptions

The MRTA amends New York Labor Law § 201-D by adding a subsection 4-a, which allows employers to take adverse actions against employee/ applicants where:

  • An employer is/was required to take such action by state or federal statute, regulation, or ordinance, or other state or federal governmental mandate (for example, mandatory drug testing is required for drivers of commercial motor vehicles in accordance with 49 CFR Part 382; see also, e.g., NY Vehicle and Traffic Law § 507-a, which requires mandatory drug testing for for-hire vehicle motor carriers in accordance with 49 CFR 382.)

  • The employer would be in violation of federal law

  • The employer would lose a federal contract or federal funding

  • The employee, while working, manifests specific articulable symptoms of cannabis impairment that decrease or lessen the employee’s performance of the their tasks or duties

  • The employee, while working, manifests specific articulable symptoms of cannabis impairment that interfere with the employer’s obligation to provide a safe and healthy workplace as required by state and federal workplace safety laws, meaning the employee manifests specific articulable symptoms of impairment that:

    • Decrease or lessen the performance of their duties or tasks

    • Interfere with an employer’s obligation to provide a safe and healthy workplace, free from recognized hazards, as required by state and federal occupational safety and health laws.

Articulable Symptom of Impairment

What They Are

As the guidance issued by the OCM makes clear, “there is no dispositive and complete list of symptoms of impairment.” Articulable symptoms of impairment are “objectively observable indications that the employee’s performance of the duties of their position are decreased or lessened.” 

Articulable symptoms also may be an indication that an employee has a disability and may trigger an employer’s obligations to engage the employee in the interactive process/cooperative dialogue (see above regarding Medical Use).

What They Are Not

Use of cannabis is not unlawful and, therefore, an indication that an employee has used cannabis (such as smelling of cannabis, or testing positive for cannabis), standing alone, cannot be cited as an “articulable symptom of impairment.” OCM states that “only objectively observable indications that an employee’s performance of the essential duties or tasks of their position are decreased or lessened may be cited.” 

Remote Work and Off-Site Use

A few notes regarding remote and off-site workers:

  • Out-of-state employees are not protected by the MRTA.

  • A private residence is not a “work site” for purposes of employees who work from home. However, OCM guidelines indicate that “an employer may take action if an employee is exhibiting articulable symptoms of impairment during work hours … and may institute a general policy prohibiting use during working hours.”

  • Employers cannot prohibit the use of cannabis while an employee is on leave or off the work site, unless such prohibition is compliant with New York Labor Law § 201-D (4)(a) (see Exceptions, above).

  • Prohibitions on cannabis use in a company vehicle are permitted even where an employee has use of the vehicle after regular business hours or work shifts. 

“Work Hours”

Employers may prohibit cannabis use during “work hours.” The OCM has adopted the Labor Law’s and the Fair Labor Standards Act’s (FLSA’s) definition of work, i.e., all hours an employee is permitted or “suffered to work,” even if the employee leaves the worksite. These include:

  • Breaks (paid or unpaid)

  • Meal periods

  • All time the employee is actually engaged in work. 

Note: Cannabis use also can be prohibited during on-call hours, but this prohibition should be exercised with caution as it relates to hourly, non-exempt employees and therefore may create a duty to pay wages under the New York Labor Law, the Minimum Wage Orders, and the FLSA’s “waiting to be engaged” exception to paying on-call hourly employees. 

Workplace Policies

• Employers can:

Create policies that prohibit employees from using cannabis on the work site and/or performing employment duties while impaired by cannabis.

  • Employers cannot:

    • Implement new or continue preexisting policies that prohibit cannabis use off the work site unless the prohibition is permitted under New York Labor Law § 201-D (4)(a).

    • Require employees to waive their rights under § 201-D of the Labor Law as a condition of hire or continued employment.

Applicability

  • The MRTA applies to all New York State employers, regardless of industry, size or occupation.

  • The MRTA does not apply to non-employees, i.e.:

    • Students

    • Independent contractors

    • Individuals working out of familial obligation

    • Volunteers

    • Those under the age of 21.

Drug Testing

Drug testing is not allowed unless it is permitted under New York Labor Law § 201-D (4)(a).

Federal Government Contractors/Interaction with the Drug Free Workplace Act

Neither the Drug Free Workplace Act of 1988 nor the rules adopted thereunder authorize drug testing of employees.

Jeremy Buchalski (Partner-New York) and Lindsay Kalick (Partner-White Plains) contributed to this article.

© 2022 Wilson Elser
National Law Review, Volume XI, Number 340
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