Weeding Through California’s Prop 64: Employer Takeaways

The initiative legalizes recreational marijuana for individuals over the age of 21. It allows adults to possess, carry, share, transport and purchase up to one ounce of marijuana. The basic thrust of Proposition 64 is to decriminalize the adult use of marijuana for recreational purposes, as well as to regulate marijuana cultivation, distribution, sale and use.

Previously, Oregon, Washington, Alaska, Colorado and Washington, DC, legalized recreational use of marijuana by adults. Also last week, voters in Massachusetts, Maine and Nevada voted to legalize recreational marijuana, while Arizona rejected such a measure. Four other states — Arkansas, Florida, Montana and North Dakota — also approved ballot measures legalizing medical marijuana. California first legalized medical marijuana with Proposition 215 in 1996.

Proposition 64 generally took effect on Nov. 9, 2016, the day after the election. The provisions legalizing individual possession and use of marijuana are in effect now. These changes raise several immediate questions about what, if anything, employers need to do and whether the initiative created any new employee rights. The good news is that Proposition 64 did not work any significant changes in the employment area.

What Proposition 64 Does

Among its main provisions, Proposition 64:

• Legalizes the private use and possession of up to one ounce of marijuana, and up to 8 grams of concentrated marijuana, for individuals over the age of 21.
• Allows individuals over the age of 21 to cultivate up to six marijuana plants.
• Allows smoking marijuana in a private home or at a business specifically licensed for on-site marijuana consumption.
• Establishes the state Bureau of Marijuana Control, responsible for regulating and licensing nonmedical marijuana businesses.
• Imposes new state taxes on growing and selling both medical and nonmedical marijuana.

Impact on California Employers

Even before Proposition 64, employers faced various questions concerning use of marijuana by applicants and employees. Although California had legalized marijuana for medical reasons in some circumstances, the drug otherwise remained illegal under federal and California law. Still, with medical marijuana and other increasing use, employers faced issues concerning drug testing, possession or use of marijuana on work premises or during work time, dealing with employees possibly under the influence, and what they could or could not do if an employee had authorization for use of medical marijuana. These same concerns, among others, remain after Proposition 64.

Proposition 215 did not contain any provision requiring employer accommodation or prohibiting discrimination. In Ross v. RagingWire Telecommunications Inc., 42 Cal.4th 920 (2008), the California Supreme Court held that an employer lawfully could refuse to employ an individual who failed a drug test, even if the positive test resulted from medical use authorized under Proposition 215. The court further held that employers are not required to permit or accommodate marijuana use as a reasonable accommodation under the Fair Employment and Housing Act. Other courts reached the same conclusion under different states’ laws.

Generally, Proposition 64 does not change the current legal landscape in the employment area. The initiative states its intent to “[a]llow public and private employers to enact and enforce workplace policies concerning marijuana.” The measure expressly provides that nothing in it shall not be “construed or interpreted to amend, repeal, affect, restrict or preempt” various existing laws, such as driving while under the influence. The same section further provides that Proposition 64 does not impact “[t]he rights and obligations of public and private employers to maintain a drug- and alcohol-free workplace or require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale or growth of marijuana in the workplace, or affect the ability of the employer to have policies prohibiting the use of marijuana by employees and prospective employees, or prevent employers from complying with state or federal law.”

With these provisions, Proposition 64 thus generally maintains the status quo in the employment area, even though it makes dramatic changes in drug laws. Employers still can adopt policies and take steps to maintain an alcohol- and drug-free workplace, even if marijuana is legal. Similarly, while alcohol is legal, employers already typically take steps to prohibit it in the workplace and to prohibit employees from being under the influence. Employers also do not have to accommodate use of marijuana, including its use for medical reasons. The RagingWire decision remains good law.

Importantly, Proposition 64 did not create any new employee rights or prohibit discrimination against employees who use marijuana. In this respect, Proposition 64 was significantly different from Proposition 19, which California voters rejected in 2010. That measure would have legalized marijuana, but created a broad new anti-discrimination provision. It would have provided that “[n]o person shall be punished, fined, discriminated against, or be denied any right or privilege for lawfully engaging in any conduct permitted by this act … providing, however, that the existing right of an employer to address consumption that actually impairs job performance by an employee shall not be affected.” With no such provision in Proposition 64, employers can avoid these concerns.

Employers still can prohibit the use of marijuana by applicants or employees. Employers can continue to prohibit possession or use on their premises or while an employee is on duty, as well as prohibit employees from being under the influence. Employers may continue to discipline employees found to be in possession or under the influence of marijuana while on work premises or on duty. Proposition 64 maintains current law prohibiting driving under the influence, so employers also may continue to prohibit such conduct and discipline employees accordingly.

Further, Proposition 64 did not make any changes to California law on drug testing. Under California’s state constitutional right to privacy, the California Supreme Court has held that public and private employers may drug test an applicant without suspicion. However, the court also held that testing current employees generally requires reasonable suspicion. Some local jurisdictions, however, may impose further drug testing restrictions by local ordinance.

Proposition 64 also apparently preserves California’s smoke-free workplace requirement in general. In addition to prohibiting marijuana smoking generally in any public place, the initiative provides that it shall not be construed to permit smoking marijuana or marijuana products “in a location where smoking tobacco is prohibited.” Thus, where California law prohibits or restricts tobacco smoking, the same rules should apply to marijuana. The initiative, however, allows local jurisdictions to permit smoking or vaporizing marijuana on the premises of a retailer or microbusiness if the business limits access to people age 21 and over, consumption is not visible from a public place, and sale or consumption of alcohol or tobacco is not allowed. Such establishments would be an exception to the smoke-free workplace law. The initiative requires Cal/OSHA to convene an advisory committee to evaluate the need for any new health or safety standard “to address exposure to second-hand marijuana smoke by employees” at these establishments, as well as whether “specific requirements are needed to address the potential risks of combustion, inhalation, armed robberies or repetitive strain injuries.”

Finally, Proposition 64 enacted one change to wage and hour requirements. It requires that an employee engaged in marijuana cultivation shall be subject to Industrial Welfare Commission (IWC) Wage Order No. 4. Typically, employees cultivating plants would be subject to IWC Wage Order No. 14, which covers agricultural occupations. The main difference is the Wage Order No. 4 requires overtime after eight hours in a day, or 40 hours in a workweek, with double overtime after 12 hours in a workday. Wage Order No. 14, however, currently requires overtime after 10 hours in a day or 60 hours in a workweek. Under recently enacted Assembly Bill 1066, agricultural employees in California gradually will be subject to the same overtime requirements as found in Wage Order No. 4. Proposition 64 made this change immediate for employees in marijuana cultivation under the initiative. Similarly, Assembly Bill 243 and Senate Bill 643 — enacted in 2015 — applied Wage Order No. 4 to employees engaged in “commercial cannabis cultivation activity.”

What Employers Should Do

With the approval of Proposition 64, employers should review their alcohol and drug policies. They may want to make sure that the policies specifically address marijuana and how it will be treated under an employer’s policies. Some policies may require updating. For example, some employers’ policies may only refer to alcohol and illegal drugs, which would not necessarily address marijuana under California law now. Employers may wish to communicate policies that specifically address marijuana in light of Proposition 64, so that employees understand what the standards are after legalization and do not mistakenly think that things concerning the workplace changed as a result.

A clear policy, communicated to employees, would avoid any confusion on the part of employees as to whether an employer allows or treats marijuana any differently after its legalization in Proposition 64. In all or most respects, marijuana can be treated the same as alcohol — both are legal in some instances, but need to be controlled and treated in the same or similar respects. If an employer may undertake drug testing, it also may wish to address the circumstances when it may conduct such testing, or reserves the right to do so.

This alert was originally published on Law360.