Medical Marijuana Raises Workers’ Comp, Liability Issues for Employers

Fifteen states and the District of Columbia currently have laws that approve medical marijuana as a medical treatment option, which has increasingly important implications in the workplace.

Arizona voters recently passed Proposition 203 allowing registered, qualifying patients (who must have a physician’s written certification that they have been diagnosed with a debilitating condition and that they would likely receive benefit from marijuana) to obtain marijuana from a registered nonprofit dispensary, and to possess and use medical marijuana to treat the condition. The state Division of Public Health Services has until April to develop the regulatory system to approve, renew, and revoke the registration of qualifying patients, designated caregivers, nonprofit dispensaries, and dispensary agents. Meanwhile, businesses statewide wonder what impact the Medical Marijuana Act will have on their companies.

Within the workers’ compensation arena, the new measure clouds clarity in the statute (ARS § 23-961 K) that permits a five percent premium credit to businesses that implement a qualified drug and alcohol policy at their workplace. SCF Arizona, the state’s largest provider of workers’ compensation insurance, promotes drug-free and alcohol-free workplaces, and continues to offer the five percent premium credit for companies that have a qualified drug and alcohol policy. As long as Arizona employers administer their drug and alcohol testing programs as required under the state statute, they can continue to earn the credit.

Employers are prohibited from discriminating against employees who will be authorized to use medical marijuana. In other words, if a job applicant or employee tests positive for marijuana in a pre-employment or other drug test, and the individual is a registered medical marijuana cardholder, the test results cannot be a basis for disqualifying him or her for the job or taking disciplinary actions against a current employee. The only exception to this is if the employer may lose “a monetary or licensing related benefit under federal law or regulations” by knowingly permitting employees to use marijuana. This exception generally applies to any government agency that receives federal funding or a private governmental contractor that is required to maintain a drug free workplace.

Likewise, if a worker who has state permission to use medical marijuana is involved in a workplace accident, and a post-accident test shows marijuana use, the employer is prohibited from disciplining the worker based on the positive drug test.
However, the new law also makes it clear that even if a worker becomes a registered medical marijuana cardholder, the individual is prohibited from ingesting or possessing the drug while at work.

Companies should update their drug and alcohol policies relating to drug use and drug testing to remove any language that says the employer will not hire or will terminate an employee who tests positive for marijuana.

A company’s policy still may contain strong language that emphasizes: “Possession or use of, or impairment from marijuana in the workplace will not be tolerated.” The policy could include language spelling out that medical marijuana will be treated like any other “lawfully prescribed drug” that may impair the way a worker functions on the job.

Nothing protects an employee who is impaired from medical marijuana from termination. However, because of the law, it may be more difficult for the employer to prove impairment. The employer will have to build a case on anecdotal evidence, which may include gathering witness testimony.

Because the Arizona’s Supreme Court ruled that impairment by itself is not sufficient to deny a workers’ compensation claim, SCF will continue to accept injury claims of a worker who tests positive for marijuana, as long as the injury occurred on the job.

As medical marijuana becomes accepted in more states, employers may need to change many of their personnel policies. But they do not have to allow anyone to work while impaired, whether by alcohol, marijuana, or any other drug.

SCF has a series of answers to common questions regarding the law and its effect on workers’ compensation. FAQs and answers are posted on Web site, www.scfaz.com.

Topics Legislation Commercial Lines Workers' Compensation Business Insurance Cannabis Arizona Medical Professional Liability