Category Archives: Tips for Employers

WHAT ARE YOU SMOKING? New Jersey’s New Cannabis Law Also Changes the Rules for Employers

As New Jersey enters a new era of legalized cannabis, employers face a whole new crop of questions about responding to employee cannabis use.  The newly passed New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (“NJCREAMMA”) changes the landscape for employers both in concrete ways and in ways that are still evolving.  On its face, NJCREAMMA allows employers to discipline employees for use of cannabis during work but prohibits them from taking adverse action against employee use outside of work. Although that principal seems straightforward, it is not. For an employer, determining when an employee consumed cannabis or whether they are actually impaired is quite challenging. The NJCREAMMA recognizes a positive cannabis test does not necessarily mean an employee is impaired at work and, therefore, limits employers’ ability to rely on tests alone. Until the science catches up to the law, employers do not yet have access to a reliable, objective measure to test for impairment at work, which makes it impossible to conclude an employee is impaired due to cannabis use based on testing alone.

What’s new?

As you may know, before the passage of this new 2021 law, the New Jersey Courts already ruled employers could not discriminate against employees lawfully enrolled in the State’s medical cannabis program and had to make reasonable accommodations for them. In practice, this body of case law, with limited exception, meant employers should not fire or refuse to hire someone who tested positive for cannabis if they had a medical use card.  Employers remained free to take adverse employment action against employees who showed signs of impairment and employees who tested positive but were not enrolled in the State’s medical cannabis program.

With the passage of NJCREAMMA, the scope of employee protections have materially expanded. Now, with limited exception, New Jersey employers may not take any adverse employment action (including refusing to hire a candidate) solely because the employee tests positive for cannabis. Employers can and should still prohibit impairment in the workplace. However, even when an employee is suspected of impairment, employers cannot act based on a positive test alone. Instead, NJCREAMMA requires that the employer also conduct a physical evaluation to determine whether an employee is impaired before it takes action based on a positive test. This physical evaluation must be performed by someone certified as a Workplace Impairment Recognition Expert. Although the State-created Cannabis Regulatory Commission is tasked with implementing guidelines for Workplace Impairment Recognition Expert training, it has not yet developed this training or guidelines. Until it does, this part of NJCREAMMA is not considered “operative” even though the law is deemed effective immediately. 

Aspects of NJCREAMMA’s employee protections, which do not have specific exemptions for safety related positions and require Workplace Impairment Recognition Expert training, are controversial and certain business groups are pushing for employee protections to be scaled back in the “clean up” bills that are expected to be introduced to try to refine NJCREAMMA. Due in part to the well-publicized political wrangling that preceded the Legislature’s final adoption of NJCREAMMA, employers should expect to see efforts to clarify the law as it applies to employers and to authorize common-sense controls on impairment in the workplace.

Employers are still permitted to conduct suspicion-based, pre-employment, random, and/or post-accident drug testing, but a positive test for cannabis alone is not enough to take action. Now, employers also must have evidence of impairment during work hours to take action. 

NJCREAMMA does allow employers to implement more strict rules for drug use when it is necessary to maintain a federal contract. 

NJCREAMMA does not restrict an employer from maintaining and enforcing drug-free workplace policies, but, again, when it comes to cannabis, employers must show use and/or impairment at work, as opposed to off-duty use. 

Savvy Employers’ Takeaways:

Practically, when it comes to cannabis, employers can focus on performance issues without attributing the source of the performance issue to cannabis impairment. Behaviors that might suggest drug use, such as sleeping on the job, carelessness, and lack of attention are properly the subject of discipline whether or not the employee is impaired by cannabis use or for another reason. NJCREAMMA, in its current form, makes it harder for employers to rely on testing as evidence of impairment, but does not restrict an employer from taking action based on observable impairment or performance issues. Although it may seem like new territory, employers have historically managed employee productivity issues, whether they arise from unknown causes or from use of legal substances, such as hangovers from alcohol abuse and performance deficits from use of prescription medications. Employers do not need drug tests to manage these issues but, instead, focus on the business disruption and observable performance issues. For now, employers would be wise to do the same when it comes to cannabis. 

Questions? Let me know.

Can I Fire an Employee Who Stormed the Capitol?

As all eyes were focused on the U.S. Capitol Building and insurgency on January 6th, back home, employers now face questions about whether they can discipline employees who participated in the siege or other off-duty conduct that contravenes the employer’s world view. The answers to these complex questions depend both on state law, the terms of employment, whether the conduct was lawful, and whether the conduct is otherwise protected. 

Broadly, non-government employees who are employed on an “at-will basis” can be terminated for any reason or for no reason, unless they are otherwise protected by law.  For example, as most employers know, employees cannot be terminated or disciplined if the employment action is discrimination against someone in a protected class and/or retaliation for engaging in protected conduct. By implication, this means “at will” employees can be disciplined or terminated for engaging in lawful off-duty conduct unless that conduct is otherwise protected. For instance, New Jersey law protects certain employees who use tobacco and cannabis off duty, but it does not protect employees who engage in the type of insurgency we saw on January 6, 2021, even if the employee acted lawfully. This means that a New Jersey employer can terminate or take action against an employee for participating in the siege on the Capitol, but cannot terminate an employee who smokes marijuana when they are not at work (provided the employee is not under the influence or otherwise impaired while on duty and the use does not impair an employer’s federal contract). Colorado, on the other hand, has a broader off-duty conduct statute that protects a range of lawful off-duty activity, meaning it is unlikely that employers in Colorado can terminate an employee who participated in the siege on the Capitol in a lawful manner. These are just two very broad examples but employers need to keep in mind that many states have a variety of off-duty conduct protections.

Employees who are employed pursuant to employment contracts, union bargaining agreements, and governmental entities may have specific rules that impose a higher standard for discipline or termination. For example, many union contracts restrict employers from disciplining employees for anything other than just cause arising from the employee’s conduct at work. n a unionized workplace it is likely an employer could not terminate or reprimand an employee who participated in the siege on the Capitol and in a lawful manner.

Employers should also keep in mind that the National Labor Relations Act protects employees who engage in protected concerted activities, whether in person or online, and employees who express support for (or opposition to) unions. These protections, among other things, offer protections to employees who desire to form or support a union. 

Savvy Employer Takeaways

In most instances, private employers can take actions against employees who engage in lawful off-duty conduct that the employer finds offensive, unless that conduct is otherwise protected by law or doing so would violate a the employee’s employment contract. Nonetheless, each situation requires an individual analysis of applicable law, the terms of employment, whether the conduct was lawful, and whether the conduct is otherwise protected. Employers must also weigh how such an action, or failure to take action, will influence the culture and productivity of their organization. 

Questions? Contact Adam E. Gersh

2019 Law At Work – Year In Review

New Year 2020 Loading Bar ConceptThey say the only thing in life that is constant is change, and we certainly saw that in 2019.  This was a big year for change in employment law as legislators, courts, and regulators, shaped the workplace to reflect societal changes.  The changes we saw included new requirements that address continued fallout from the #MeToo movement, concerns about wage distribution and equity, and balancing the rights of employers and unions.  Coupling these legal changes with competitive pressures due to labor shortages in certain industries, the stakes are higher than ever for employers.  We are seeing rapid change in the workplace and now is not the time fall behind.  In case you missed it, here are some issues that we brought to employers this year:

New 2020 Overtime Rule Means Employers Must Reevaluate Which Employees Are Overtime Eligible 

As you may recall, the U.S. Department of Labor released a Final Rule which was to go into effect on December 1, 2016, but, due to a court-issued injunction, followed by change of administration, it never did.  Now, we have an updated version that goes into effect on January 1, 2020.  Although the proposals leading up to these new rules garnered a lot of ink, the new rules make some changes that were not expected and maintain the status quo in areas that were expected to change. The DOL says the increase in salary thresholds will boost wages for 1.3 million U.S. workers. More here.

What Employers Need to Know About New Jersey’s Tough New Wage Theft Law 

On August 6, 2019, New Jersey amended its Wage and Hour Law and adopted the new Wage Theft Act (WTA), creating one of the toughest wage and hour enforcement laws in the country.  This law puts a high burden on employers and imposes significantly increased liability for employers who fail to pay wages owed, including potential jail time.

Click here to read more about what this means for employers and what employers should do to protect themselves from liability under the WTA.

New Jersey Prohibits Employers From Asking Prospective Employees About Their Salary Histories  

Beginning in January, employers will no longer be able to screen job applicants based on their wage or salary history, or inquire about their historical salary, compensation and benefits. However, a prospective employee may still voluntarily provide salary information. The bill doesn’t go into effect until January 25th, but employers should be preparing to amend their recruitment processes before it is enacted.

Practically, this law means employers will need to rely on measures other than a candidate’s salary history in setting compensation, including internal pay policies and market-based analysis. Click here to learn more.

SCOTUS Rules Requirement to File Charge Before Suing Under Title VII is Nonjurisdictional: Employers Must Raise Defense Timely 

The main takeaway from the opinion named in this legal alert is that employers faced with violations of Title VII must be careful to promptly raise the defense, when available, that the employee failed to file a charge with the EEOC within the allotted time period. In many Circuit Courts of Appeal, including the Third Circuit, this has long been the law, while in other Circuits, employers could raise this defense at any time. Now, all employers must raise it timely. Employers and their counsel should be careful to do so.

If you are facing any complaints under Title VII and/or any state equivalents, click here to read about this case in more detail.

New Jersey Creates Employment Protections for Medical Cannabis Patients and Providers

In addition to the range of court decisions that shape how employers treat employees who use medical cannabis, in July, New Jersey’s legislature weighed in with new requirements. Now, no matter how an employer ultimately chooses to treat employees and applicants who use medical cannabis lawfully under the Jake Honig Compassionate Use Medical Cannabis Act, employers need to amend their drug screening programs and hiring processes to ensure that they are in compliance with this law. Employers also need to consider whether they will accept a valid medical explanation as a basis to disregard a positive test, especially in light of recent court rulings that may create liability for employers who take adverse action against employees and applicants who use medical cannabis in accordance with state law. Click here to learn more.

New Jersey Requires Pre-Tax Transportation Fringe Benefits 

The federal Tax Cuts and Jobs Act of 2017 eliminated a federal tax deduction for employers which had allowed them to deduct the cost of providing qualified transportation benefits to employees (thereby removing the tax incentive for employers to do so). In response, earlier this summer New Jersey enacted “An Act Concerning Pre-Tax Transportation Fringe Benefits” requiring all New Jersey employers with 20 or more employees to offer employees the opportunity to set aside wages on a pre-tax basis for the purchase of qualifying transportation services, such as transit passes and commuter highway vehicle travel. Click here to learn more about what this means for employers, including next steps and how to ensure your company is in compliance.

What Employers Need To Know: New Jersey’s Appellate Division Issues Historic Ruling On Medical Marijuana Users’ Rights in the Workplace

New Jersey employers need to be mindful that they no longer have a free pass to take adverse employment actions against employees and candidates solely because they use medical marijuana; those affected by such decisions will be emboldened by this new case, and their lawyers will be confident that a lawsuit challenging the adverse actions is more likely to survive a motion to dismiss at the beginning of the case. As the law in New Jersey now stands, employers are not required to accommodate medical marijuana use, but there is now an increased risk if they refuse. Additionally, various bills have been proposed and are being considered by the New Jersey legislature, which, if adopted, may expand employee rights in this area of the law.

As of right now, employers remain free to take adverse action if an employee shows any sign of impairment from use of medical marijuana, or, for that matter, any other drug, legal or not. More here.

Medical Cannabis Goes to Work 

Employers who take action against a candidate or employee based on a positive result for cannabis when the employee has a valid medical authorization and no evidence of impairment should be prepared for a fight.  Employees and their lawyers are looking for these cases in many states to try to change the law. Employers need to decide if screening out medical cannabis users is worth the risk of a potentially expensive court battle. More here.

Unions High on Cannabis 

As businesses across the country look to capitalize on the “green rush” from states’ expanded medical and adult use cannabis laws, unions are also eager to take advantage of the opportunities presented by this burgeoning, and quickly maturing, industry.  For instance, the United Food and Commercial Workers International Union has formed a cannabis-focused division and is actively representing cannabis workers in many states and seeking to expand to others.  These unions may also get a boost from legislative action in certain states.  Under New Jersey’s proposed cannabis expansion law, for example, licensee applicants who have entered into a labor peace agreement or a collective bargaining agreement receive preference in the license competition.  Expect unions to seek to represent workers in cannabis-related construction, retail, farming, cultivation, security, and processing.

Employers operating in and/or servicing the cannabis industry should consider and plan for the potential impact of labor unions in their industry.

Walmart Takes a Seat in California 

Earlier this year, Walmart reportedly agreed to pay $65 million to settle a case brought on behalf of nearly 100,000 current and former California cashiers who claimed the company violated their rights under a state law dating back to 1911 when it failed to provide them with seating.  The workers claimed Walmart, which denied any wrongdoing, breached its duty to make seating available “when the nature of the work reasonably permits.” This case is a friendly reminder that employers need to look carefully at their duty to offer reasonable accommodations to employees and to engage in an interactive process to make sure that the employer can justify any denied accommodation. More here.

What New Jersey’s New Law On Employment Contracts Means for Employers: Are Non-Disclosure and Arbitration Provisions Out? 

On March 18, 2019, New Jersey Governor Phil Murphy signed a new law, which, among other things, bars employers from requiring employees to sign or enforcing employment contracts that require employees to agree to waive certain rights or remedies and bars agreements that conceal details relating to discrimination claims. Click here for a checklist of what employers need to know, including what this law prohibits and applies to in the workplace.

Questions? Let me know.

U.S. Dept. of Labor Makes Its Move

Employment attorney adam gersh

As long-time readers of this blog may recall, since 2015, the U.S. Department of Labor  has been trying to update its Fair Labor Standards Act  regulations to qualify more employees for overtime pay. For basic exemptions, meaning those that are not industry-dependent such as the administrative, executive and professional exemptions, employers may generally classify as exempt from overtime pay only employees who meet both a duties test and a salary test.  Since 2004, federal law allowed employers to designate salaried workers who earn at least $455/week (the equivalent of $23,660/year) and meet certain “white collar exemption” duties-test requirements as exempt from overtime.  This month, the DOL issued a proposed rule to increase that salary exemption to $679/week (equivalent to $35,308/year).  If adopted, salaried employees who meet an applicable duties test and earn more than $455/week but less than $679/week will no longer be exempt from overtime under the basic exemptions.  Importantly, the DOL proposed rule will allow employers to use nondiscretionary bonuses (for example incentive bonuses tied to productivity or profitability) and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the salary test.  The DOL is also proposing to increase the exemption that applies to highly compensated employees.  Currently, salaried employees who earn at least $100,000/year in salary are exempt from overtime regardless of whether they satisfy the applicable duties test.  Under the proposed rule, the highly compensated employee salary threshold will increase to $147,414/year, meaning employees paid less than that threshold amount will be subject to a duties test or other exemption.  The proposed rule does not seek a change to any of the duties tests for the basic exemptions.

Savvy employer takeaways: Employers need to evaluate their payroll to identify salaried employees who meet the applicable duties test but may no longer be exempt and assess whether increasing the employee’s salary or making the employee overtime eligible makes more sense.  Employers also need to consider applicable state law, which may be more restrictive than the exemptions permitted under the FLSA.

Questions? Let me know.

The Department of Labor Goes to Church – Tips for Employers with Charitable Components

Adam Gersh Provides Tips for Employers with Charitable ComponentsThe U.S. Court of Appeals for the Sixth Circuit sided with a church operating the Lord’s Buffet and against the Department of Labor (“DOL”) in a case testing the reach of the Fair Labor Standards Act (“FLSA”). In Acosta v. Cathedral Buffet, Inc., the appellate court reversed a trial court ruling and held that volunteers who staffed a church-operated buffet are not employees and the Grace Cathedral Church did not run afoul of the FLSA by failing to pay the volunteers minimum wage.  The DOL claimed the church and its televangelist pastor illegally used unpaid labor by staffing its buffet with volunteers from the congregation.  In this case, the church operated the buffet restaurant for a religious purpose: to allow church members to proselytize to patrons.  Its operations relied heavily on church volunteers who worked alongside paid employees performing the same work. While the work performed was comparable to that of an employee, the Sixth Circuit held the DOL overstepped the bounds of the FLSA by applying it to the volunteer workforce.  In part, the Court’s decision relied on a determination that the volunteers had no expectation of payment and were not economically reliant on the work of the church.  

Savvy employer takeaways: Employers with charitable missions and those who support charities must be careful to delineate work from volunteer activities to avoid claims that the volunteers should have been paid for their activities.

Questions? Let me know.

 

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