by Attorney Angela Snyder
What Happens Now?
Change comes with every Presidential election and this one could be seismic. Naturally, when we heard the outcome, 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, California, Maine and Nevada 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 day 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 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. Trump has not released a specific policy or position, although he has said he favors “a delay or a carve-out of sorts,” but only for small businesses. This is far from a guarantee.
Additionally, as we have advised over the last year, the FLSA White Collar exemptions require 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 portion of the test. Many employers audited all of their exempt positions in preparation of these new rules. To the extent employees were reclassified because their duties did not meet the requirements of one of the White Collar exemptions, a rollback of the new salary levels will be irrelevant.
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 the legislation will pass into law before the new rules go into effect. As for the lawsuits, there is a hearing this week in an action to challenge the rule; and it is possible the presiding judge will issue an injunction at that time. However, the judge hearing the case is an Obama appointee, which means it is more than likely that on December 1, 2016, by law, all exempt positions must receive a salary of at least $913 per week.
Why comply, when there is a chance the new rules will be rolled back? As a quick reminder, under the FLSA, non-exempt employees who are improperly classified will be owed back wages and liquidated damages (equal to the back wages owed), and the auditing agency or court will look back two years to determine the overtime and wages owed. If they believe the employer intentionally misclassified employees, that period extends to three years. Under Massachusetts law, employees are entitled 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 at a later date.
Affordable Care Act
Trump and Republicans in Congress have stated that they will seek to repeal ObamaCare within Trump’s first 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 Trump’s intention is to replace the ACA with some other program, which means 2017 should be interesting for employers. Trump has also stated he would keep the pre-existing condition mandate and the availability of insurance for children until the age of 26, which sounds a lot like…ObamaCare.
With the advent of the edible marijuana industry, a gummy bear is no longer a gummy bear. Recreational pot shops are coming to Massachusetts in 2018. Wondering how to prepare your workplace? Here are some things to know when it comes to creating policies on marijuana use:
So, what does all of this mean? In the states that legalized marijuana in 2012, 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 offered 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 recreational 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 I drug. This, in turn, will likely influence legal decisions.
Although the Massachusetts recreational marijuana law does not directly alter the state laws governing 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 what amount of marijuana use should result in a termination, Colorado and Washington, where recreational use of marijuana is legal, set 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.
Private employers have latitude in terms of behavior they can prevent 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 conduct 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. Trump’s 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.
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