Understanding How New Jersey’s Recreational Cannabis Law Impacts Employers

When New Jersey legalized recreational cannabis in February, it dramatically altered the legal landscape governing cannabis use, including how employers can restrict recreational use by their employees...

When New Jersey legalized recreational cannabis in February, it dramatically altered the legal landscape governing cannabis use, including how employers can restrict recreational use by their employees. The Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA) addresses issues ranging from drug testing to legal protections for employees who use cannabis outside the workplace.

To further complicate compliance, additional changes may be on the horizon. Legislation introduced on March 9, 2021, would allow employers to ban employees’ use of cannabis on their personal time if they work in certain safety-sensitive roles. It would also allow employers to “use scientifically reliable testing services and to exercise [their] own judgment in making a good faith suspicion determination” about an employee’s impairment, which may lead to discipline/termination.

Key Provisions of CREAMMA Impacting Labor Law

Because CREAMMA overhauls how recreational is treated under New Jersey law, it also includes big changes for employers. Below is a brief summary of the CREAMMA provisions impacting labor issues:

Employment Protections

Employers are prohibited from firing or refusing to hire a person who uses cannabis on their own time. The law expressly states: “No employer shall refuse to hire or employ any person or shall discharge from employment or take any adverse action against any employee with respect to compensation, terms, conditions, or other privileges of employment because that person does or does not smoke, vape, aerosolize or otherwise use cannabis items.” New Jersey employers are also prohibited from making an employment decision “solely” based on an arrest, charge, conviction, or adjudication of delinquency for violation of certain New Jersey laws related to manufacturing, distributing, dispensing, or possessing certain amounts of cannabis.

Drug Testing

Employers may still prohibit cannabis in the workplace. This includes prohibiting the possession and consumption of cannabis in the workplace, as well as intoxication during work hours.

Employers can require random testing, or testing as part of a pre-employment screening, or regular screening of current employees to determine use during an employee’s prescribed work hours. Under CREAMMA, an employer may also require an employee to undergo drug testing if: 

• The employer reasonably suspects the employee’s usage of a cannabis item while engaged in the performance of the employee’s work responsibilities;
• There are observable signs of intoxication related to usage of a cannabis item; or
• The drug test follows a work-related accident subject to investigation by the employer.

Employers can utilize the results of any such drug test when determining the appropriate employment action concerning the employee. However, an employee drug test must meet a heightened standard, which includes scientifically reliable objective testing methods and procedures, such as testing of blood, urine, or saliva, AND a physical evaluation in order to determine an employee’s state of impairment.

The physical evaluation must be performed by a “Workplace Impairment Recognition Expert” certified by the Cannabis Regulatory Commission The yet-to-be-established certification program will be developed by the Commission in consultation with the Police Training Commission, and will prescribe standards, minimum curriculum courses of study, and the approval of private programs, organizations, and schools and their instructors to offer courses of study, for full or part-time employees, or other contracted persons working for or on behalf of employers. These certified persons will be trained to detect and identify an employee’s use of cannabis items or other intoxicating substances and assist in the investigation of workplace accidents.

Proposed Amendments to Employment Provisions of CREAMMA

Less than a month after the landmark cannabis bill took effect, the New Jersey Legislature is already contemplating changes. One of the bills introduced would amend certain employment-related provisions of CREAMMA.

Senate Bill 3525 provides that employers can’t prohibit an employee from using cannabis products during non-work hours except upon a determination by an employer that the nature of the work of an employee at a critical infrastructure facility or a construction site has an “exceptionally high risk of potential harm to other employees or to public safety if the employee were to be impaired through the use of cannabis.”  The approval to designate categories of such employees, or a specific employee of an employer, must be made by the Cannabis Regulatory Commission upon application of the employer.

Senate Bill 3525 also allows employers to prohibit off-duty cannabis use without first obtaining the Commission’s approval in the following circumstances:

• When the nature of the work of an employee is operating, maintaining, constructing or repairing a public utility that is subject to the jurisdiction of the Board of Public Utilities;
• When such actions are required under the federal Omnibus Transportation Employee Testing Act of 1991;
• When the employer is subject to the Railway Labor Act; or
• When the employee is a law enforcement officer and the duties of the employment require the possession of a firearm.

The legislation also removes the requirement that an employer designate and certify employees as Workplace Impairment Recognition Experts for drug testing and determinations of suspicion of cannabis usage while engaged in the performance of the employee’s work responsibilities. As explained in the statement accompanying the bill, an employer would “remain free to use scientifically reliable testing services and to exercise its own judgment in making a good faith suspicion determination.”

Senate Bill 3525 was introduced on March 9, 2021, and is now under consideration by the Senate Judiciary Committee. Companion legislation has also been introduced in the New Jersey Assembly.

What’s Next?

Labor issues involving recreational cannabis will continue to evolve over the next several months. CREAMMA’s employment protections and drug testing requirements don’t become operative until the Commission adopts implementing rules and regulations. The Commission has 180 from the effective date of the new law to develop its regulations, which is August 21, 2021.

In the meantime, New Jersey employers should begin to review their drug testing policies and consider what changes will be needed for compliance. For assistance, we encourage you to contact a member of the Scarinci Hollenbeck Cannabis Law Group.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Dan McKillop, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.

This article is a part of a series pertaining to cannabis legalization in New Jersey and the United States at large. Prior articles in this series are below:

• Will New York Legalize Recreational Marijuana This Week?
• Is It Easy to Become a New Jersey Cannabis Dispensary?
• What’s Legal and Still Illegal Under New Jersey’s New Marijuana Laws?

Disclaimer: Possession, use, distribution, and/or sale of cannabis is a Federal crime and is subject to related Federal policy. Legal advice provided by Scarinci Hollenbeck, LLC is designed to counsel clients regarding the validity, scope, meaning, and application of existing and/or proposed cannabis law. Scarinci Hollenbeck, LLC will not provide assistance in circumventing Federal or state cannabis law or policy, and advice provided by our office should not be construed as such.