As discussed in our March 28, 2019 blog post, New Jersey adopted its own individual health insurance mandate, the   New Jersey Health Insurance Market Preservation Act (“NJHIMPA”).  The NJHIMPA requires, with certain qualifying exemptions, New Jersey residents to have minimum essential health coverage. New Jersey employers must verify health coverage information provided by individuals. To assist with employer reporting, New Jersey launched an official website with guidance on the filing requirements.

Recent updates to the official website, which was lasted updated on July 25, 2019, are summarized below.

Use of Forms 1094 and 1095 Are Expected to Satisfy Employer Reporting in New Jersey

The State requires that employers provide New Jersey taxpayers and the State with the same Forms 1094 and 1095 health-care coverage information they send to the IRS. Employers will file health coverage forms through New Jersey’s system for filing of W-2 forms. Since March 28, 2019, the State has provided additional guidance encouraging companies to send data pertaining only to New Jersey full-year and part-year residents. However, for ease of filing, New Jersey will accept the same 1094/1095 data files sent to the IRS, even if they include data about individuals who are not residents of New Jersey. In other words, the State will accept “bulk” files.

Bulk Files May Raise Privacy and Other Laws

The State cautions out-of-state companies who provide information on non-residents of New Jersey that they should consult privacy and other laws pertaining to residents of other states before sending any sensitive or personal data to New Jersey.

Electronic Filing is Required

Updated guidance from the State provides that there is no paper filing option available.

Insurers or employers can submit the required health insurance coverage returns using their Division of Revenue and Enterprise Services (DORES) MFT SecureTransport service user credentials. For those without MFT SecureTransport, user credentials and/or technical specifications may be obtained by emailing e-GovServices@treas.nj.gov. Files for multiple companies can be submitted via a single file (that must not be in a zipped file format) from a single MFT SecureTransport account.

New Jersey strongly encourages filers to participate during their testing period, which will run from July 1, 2019 through September 1, 2019.

Filing Deadline for the 2019 Tax Year is March 31, 2020

The deadline to electronically file 2019 coverage information for the 2019 tax year is March 31, 2020. This deadline tracks the deadline to file Forms 1094 and 1095 electronically with the IRS. Under preliminary guidance, the deadline was earlier, by February 15, 2020.

Employer Takeaways

Employers in New Jersey and out-of-state employers with New Jersey residents should work with legal counsel and their vendors to assess their obligations and prepare for the 2019 tax year reporting obligations. They should consider participating in the State’s testing period and continue to monitor the State’s website for further updates on their reporting obligations.

California, Massachusetts, Rhode Island, Vermont, and the District of Columbia also have adopted individual health insurance mandates, and several other states including Connecticut, Hawaii, Maryland, Minnesota, and Washington are considering their own individual health insurance mandates.

As more states adopt mandates, employers operating in multiple states should monitor their obligations in the various jurisdictions where their employees reside and expect reporting obligations to become more complex than they are under the ACA.

Following an effort in the state legislature to legalize recreational marijuana, on July 29, 2019, Governor Andrew Cuomo signed S.6579A/A.8420 (the “Law”), a law decriminalizing marijuana possession in New York State. The Law will take effect on August 28, 2019. The Law expunges many past convictions for marijuana use and reduces the penalty for possession of small amounts (less than two ounces) of the drug from a misdemeanor to a violation.

Importantly, the Law does not legalize marijuana, and – relevant to this blog – therefore provides no employment protections for users or possessors of marijuana. But employers should stay tuned, as sponsors of the “Marihuana Regulation and Taxation Act” (S.1527B/A.1617B) – a bill to legalize adult-use marijuana in New York – have vowed to revive it in the next legislative session.

On August 9, 2019, Illinois Governor Pritzker signed legislation amending the state’s current medical marijuana pilot program. The Compassionate Use of Medical Cannabis Program Act (the “Medical Cannabis Act”) makes the medical marijuana program, which was initially enacted as a pilot program in 2013, permanent and expands the qualifying medical conditions for a medical marijuana card to include at least 12 new conditions, including chronic pain, irritable bowel syndrome, migraines, osteoarthritis, and ulcerative colitis. The Medical Cannabis Act also provides easier access to a medical marijuana card by expanding the range of medical professionals who can certify eligibility of applicants to the program. In addition to physicians, advanced practice registered nurses or licensed physician assistants can diagnose and certify an individual’s eligibility for the medical marijuana program. The amendments to the medical marijuana pilot program are effective immediately.

The Medical Cannabis Act continues to protect the status of a registered medical marijuana cardholder and prohibits an employer from discriminating against a cardholder based on his or her status as a registered qualifying patient of medical marijuana. However, employers may continue to take into account an employee’s medical marijuana cardholder status, if failing to do so would force the employer to violate federal law, such as the Department of Transportation regulations or the provisions of the Drug Free Workplace Act.

The Medical Cannabis Act does not change the express workplace protections previously included in the state’s medical marijuana pilot program. Employers should be able to continue to enforce zero-tolerance or drug free workplace policies, discipline a cardholder for violating a workplace drug policy, and discipline an employee based on a good faith belief that an employee is impaired at work. Similar to Illinois’ recreational marijuana law (the Cannabis Regulation and Tax Act) which takes effect January 1, 2020, if an employer disciplines a marijuana cardholder based on its good faith belief of impairment, the employer must afford the employee a reasonable opportunity to contest the basis of the determination.

However, employers should be aware that they may need to engage in an interactive process to determine whether they are able to accommodate an employee’s off-duty use of medical marijuana. Recent rulings in federal and state courts outside of Illinois have found that, depending on the language of the state’s anti-discrimination or medical marijuana statutes, the use of medical marijuana may be a reasonable accommodation for an employee, when the use occurs outside of working hours and does not adversely affect safety or job performance.  The Illinois Human Rights Act prohibits employment practices that discriminate on the basis of a person’s actual or perceived disability, if the disability is unrelated to the person’s ability to perform the job in question. Thus, for example, if an employee contests his employer’s impairment determination by informing his manager that he has a medical marijuana card for migraines, his employer may need to engage in the interactive process prior to taking a disciplinary action.

By legalizing recreational marijuana use and expanding the medical marijuana program, marijuana use in Illinois is likely to become more prevalent, and employers can expect an increase in marijuana-related issues to infiltrate the workplace.   Accordingly, Illinois employers should take steps now to ensure they are ready to address marijuana-related issues in the workplace. Some actions for employers to consider include:

  1. Review and update workplace drug policies to ensure employees are on notice of prohibited workplace conduct and the disciplinary action and process for violating the policy. The policy should include a written procedure for employees to be able to contest a cannabis-based disciplinary determination. In addition, for employment policies that cover employees in multiple states, consider whether to include state-specific information relating to Illinois’ medical and recreational marijuana laws effect on Illinois-based employees. Similar information may be required to tailor specific language for employees in other states that have their own recreational and/or medical cannabis regulations to ensure that employees clearly understand the state-specific cannabis regulations and the Company’s workplace drug policies.
  2. Review and update reasonable accommodation policies, as employers may need to engage in an interactive process and make an effort to accommodate an employee’s off-duty use of medical marijuana.
  1. Train supervisors on how to recognize, properly document and promptly report the signs of suspected marijuana impairment. Illinois’ medical and recreational marijuana laws provide specific symptoms to look for when making a determination that an employee is “impaired” or “under the influence” of marijuana,  including  the employee’s speech, physical dexterity, agility, coordination, demeanor, irrational or unusual behavior, negligence or carelessness in operating equipment or machinery, disregard for the employee’s own safety or the safety of others, involvement in any accident resulting in serious damage to equipment or property, disruption of a production or manufacturing process, and carelessness that results in any injury to the employee or others. This training will help establish that an employer had a “good faith belief” that the employee was impaired on the job and therefore that discipline was warranted and lawful. This training should also include reminders that company policy must be applied in a nondiscriminatory manner.

Please contact James Oh and Kathleen Barrett if you would like to discuss assistance in preparing your workplace for handling marijuana-related issues in Illinois or elsewhere.

Our Employee Benefits and Executive Compensation practice now offers on-demand “crash courses” on diverse topics. You can access these courses on your own schedule. Keep up to date with the latest trends in benefits and compensation, or obtain an overview of an important topic addressing your programs.

In each compact, 15-minute installment, a member of our team will guide you through a topic. This on-demand series should be of interest to all employers that sponsor benefits and compensation programs.

In our newest installmentTzvia Feiertag, Member of the Firm in the Employee Benefits and Executive Compensation practice, in the Newark office, presents “HIPAA Privacy and Security Rule Compliance.”

While employers themselves are not directly regulated by the Privacy and Security Rules of the Health Insurance Portability and Accountability Act (“HIPAA”), most employers that sponsor group health plans have ongoing compliance obligations. This crash course offers a brief overview of who and what is covered by these rules, why employers should care about HIPAA compliance, and five tips to maintain compliance.

Click here to request complimentary access to the webinar recording and presentation slides.

This Employment Law This Week® Monthly Rundown discusses the most important developments for employers in August 2019.

This episode includes:

  • Increased Employee Protections for Cannabis Users
  • First Opinion Letters Released Under New Wage and Hour Leadership
  • New Jersey and Illinois Enact Salary History Inquiry Bans
  • Deadline for New York State Anti-Harassment Training Approaches
  • Tip of the Week

See below to watch the full episode – click here for story details and video.

We invite you to view Employment Law This Week® – tracking the latest developments that could impact you and your workforce. The series features three components: Trending News, Deep Dives, and Monthly Rundowns. Follow us on LinkedInFacebookYouTube, Instagram, and Twitter and subscribe for email notifications.

On July 16, 2019, the New Jersey Supreme Court (“Court”) granted certification to review the Appellate Division’s decision in Wild v. Carriage Funereal Holdings, which ruled that the New Jersey Law Against Discrimination’s (“LAD”) requirement that employers reasonably accommodate disabilities applied to an employee’s use of medical cannabis legally prescribed pursuant to New Jersey’s Compassionate Use of Medical Marijuana Act (“CUMMA”[1]). Employers may expect to see additional direction regarding their obligation to accommodate employees’ use of legally prescribed medical cannabis, particularly in light of amendments to CUMMA enacted after the Appellate Division’s decision.

In Wild, which we discussed in a recent client alert, plaintiff Justin Wild (“Wild”) alleged that his employer, Carriage Funeral Holdings (“Carriage Funeral”) failed to reasonably accommodate his disability (cancer) and unlawfully discharged him in violation of the LAD because he used medical marijuana, as legally permitted by CUMMA. Carriage Funeral terminated Wild’s employment after he tested positive for cannabis following an on-duty motor vehicle accident.

The trial court dismissed the lawsuit holding that the fact Wild tested positive for cannabis  constituted a legitimate business reason for his discharge because cannabis use (medical or otherwise) remains prohibited under federal law. In rendering its decision the trial court relied on a provision in the law stating that CUMMA did not require employers to reasonably accommodate licensed use of medical marijuana in the workplace. The Appellate Division reversed, holding that the fact that CUMMA did not “require” employers to accommodate an employee’s use of  medical marijuana in the workplace, did not affect an employer’s requirement under the LAD to reasonably accommodate an employee’s disability, which could include an employee’s off-duty and off-site use of medical cannabis.

As we recently reported, since the Appellate Division’s decision in Wild, New Jersey amended CUMMA. Among other things, the amendments (“Amendments”) prohibit employers from taking an adverse employment action[2] against a current or prospective employee based upon the individual’s status as a “registered qualifying patient” of medical marijuana. The Amendments additionally require employers that maintain drug-testing policies to offer applicants and employees the right to respond, in specific ways, to a drug test that came back positive for cannabis. Of particular note, the Amendments deleted the provision in the original statute stating that nothing in the act imposed “an obligation on employers to accommodate an employee’s use of medical marijuana.” Court-watchers will certainly be curious to see if the Court addresses the issue of requiring employers to accommodate what is still considered a federal crime, and whether not an employer may plead that it is a per se hardship to require them to accommodate an employee’s illegal acts, such as the use of medical marijuana.

This post was written with assistance from Radhika Gupta, a 2019 Summer Associate at Epstein Becker Green.

[1] The amendments to the law changed the statute’s name to the “Jake Honig Compassionate Use of Medical Cannabis Act.”

[2] Under the Law, “adverse employment action” means “refusing to hire or employ an individual, barring or discharging an individual from employment, requiring an individual to retire from employment, or discriminating against an individual in compensation or in any terms, conditions, or privileges of employment.”

On July 9, 2019, Hawaii became the 26th state to decriminalize possession of small amounts of marijuana. HB 1383 (the “Law”), which became law when Governor David Ige allowed the veto deadline to pass without signing or striking down the bill, decriminalizes the possession of up to three grams of marijuana. It will go into effect on January 11, 2020.

Under the Law, those caught with up to three grams of marijuana will no longer face jail time but will still face a fine of $130. This is the smallest amount of marijuana that any state has decriminalized so far. Currently, possession of any amount of cannabis is punishable by up to 30 days in jail, a criminal record, and a $1,000 fine.

The Law also provides for the expungement “of criminal records pertaining solely to the possession of three grams or less of marijuana.” The state has amended its expungement statute in order to reflect this change, noting that courts must grant an expungement order, provided the individual is not facing any other criminal charges, and provided that the amount of marijuana possessed was three grams or less.

The Law establishes a “Marijuana Evaluation Task Force,” in an effort to examine other states’ laws, penalties and outcomes related to the decriminalization and legalization of marijuana. The task force, which will be active until June 30, 2021, will make recommendations on further changing marijuana laws in Hawaii.

The Law does not provide employment protections for recreational users, nor does it modify Hawaii’s Medical Use of Cannabis Law, which was amended last year in part to form a working group to evaluate potential discrimination against medical cannabis users and the employment protections made available in other states.

Employers and health care professionals should be ready to handle issues that arise with the potential conflict between state and federal law in devising compliance programs, both in terms of reporting and human resources issues, including practices and policies addressing drug use and drug testing. States continue to consider – and pass – legislation to decriminalize and legalize cannabis (both medicinal and recreational), and we are slowly marching toward 50-state legalization. All organizations – and particularly those with multi-state operations – should review and evaluate their current policies with respect to marijuana use by employees and patients.

This post was written with assistance from Radhika Gupta, a 2019 Summer Associate at Epstein Becker Green.

This Employment Law This Week® Monthly Rundown discusses the most important developments for employers in July 2019. Both the video and the extended audio podcast are now available.

This episode includes:

  • State Legislation Heats Up
  • NLRB Overturns Another Long-Standing Precedent
  • SCOTUS October Term 2018 Wraps Up
  • Tip of the Week: How inclusion and trust can increase innovation in the workplace

See below to watch the full episode – click here for story details, the video, and the extended audio podcast.

Stay tuned: Sign-up for email notifications and subscribe to the extended podcast edition on your preferred platform – Apple PodcastsGoogle Play, OvercastSoundcloudSpotifyStitcher.

On July 2, 2019, New Jersey joined Illinois, Nevada, New Mexico, New York City, and Oklahoma in enacting employment protections for authorized users of medical cannabis. New Jersey’s new medical cannabis law (“Law”), which became effective upon signing by Governor Phil Murphy, amends the state’s Compassionate Use Medical Cannabis Act (“CUMCA”),[1] N.J.S.A. 24:61-2, et seq. Among other measures, the Law prohibits employers from taking an adverse employment action against a current or prospective employee based on the individual’s status as a registered qualifying user of medical cannabis. Under the Law, an “adverse employment action” means “refusing to hire or employ an individual, barring or discharging an individual from employment, requiring an individual to retire from employment, or discriminating against an individual in compensation or in any terms, conditions, or privileges of employment.” In addition, the Law requires employers that maintain drug-testing policies to offer applicants and employees the right to respond, in specific ways, to a drug test that comes back positive for cannabis.

Specifically, if an employee or applicant tests positive for cannabis, the Law requires the employer to provide written notice offering the individual the right to provide a “legitimate medical explanation” for the positive test result or to request a retest of the sample. The individual has three days after receiving the notice to (i) provide the explanation, which may include authorization for the use of medical cannabis issued by a health care practitioner, proof of registration with the state’s newly created Cannabis Regulator Commission, or both, or (ii) request a confirmatory retest of the original sample at the individual’s own expense.

In addition, the Law grants employment and other protections to health care practitioners who engage in conduct authorized by CUMCA. Unless failing to do so would result in losing a monetary or licensing-related benefit granted pursuant to federal law, a health care facility may not take an adverse employment action against a health care practitioner or limit, restrict, or terminate a professional affiliation with a health care practitioner solely for engaging in conduct permitted by CUMCA, including authorizing patients for the medical use of cannabis, issuing written instructions to patients regarding such use, and consulting with patients regarding the use of medical cannabis to treat the patient’s qualifying medical condition. The Law reiterates that, under New Jersey law, no employer, including a health care facility, may be penalized or denied any benefit to which it is otherwise entitled for employing or maintaining a professional affiliation with a health care practitioner who engages in conduct permitted by CUMCA.

Of note, the Law deleted the original statute’s provision stating nothing in the act imposed “an obligation on employers to accommodate an employee’s use of medical marijuana.” The interpretation of the now-deleted provision was the subject of a recent New Jersey Appellate Division decision, which ruled that medical cannabis users might be entitled to reasonable accommodation under the New Jersey Law Against Discrimination, which we discussed in a previous Act Now Advisory; the amendment effectively ratifies that decision.

Implications for Other States and Multistate Employers

Given the trend in state laws to permit and expand the use of both medical and recreational marijuana and cannabis derivatives, some companies are reconsidering their drug-testing policies for applicants and employees. Laws such as those in Nevada, New Mexico, New York City, Oklahoma, and now New Jersey, which provide qualified medical cannabis users with various workplace protections, reflect the growing shift in attitudes about cannabis use, at least in some parts of the country. As employers try to balance their efforts to maintain a safe and healthy work environment with the increasing number of employees who lawfully use cannabis, they should anticipate that other states are likely to follow suit.

Employers therefore should consider how they want to approach the changing landscape—for example, whether to take a state-by-state approach or, to the extent possible, adopt a uniform approach that applies the law of the state with the most employer restrictions.

 What New Jersey Employers Should Do Now

New Jersey employers that engage in applicant and employee drug testing should do the following:

  • Prepare protocols for responding to positive drug-test results, including creating a written notice to give to persons who test positively for cannabis, advising them of:
    • their positive drug test result for cannabis;
    • their right to:
      • provide a “legitimate medical explanation” for the positive result, i.e., their authorization for the use of medical cannabis issued by a health care practitioner, proof of registration with the state’s Cannabis Regulator Commission, or both, or
      • request a confirmatory retest of the original sample at the person’s own expense; and
    • the three-day deadline for providing such information or request.
  • Train human resources staff and supervisors on the Law, as well as on any newly adopted or revised policies and protocols with respect to drug testing.

As the regulatory landscape continues to evolve, all employers should regularly review and, as necessary, revise their drug-testing and related policies, and consult with counsel, as appropriate.

Read this Act Now Advisory online.

__________________

[1] The Law amends the statute’s original name, “New Jersey Compassionate Use Medical Marijuana Act,” to the “Jack Honig Compassionate Use Medical Cannabis Act.”

On June 5, 2019, Governor Steve Sisolak of Nevada signed AB 132 (the “Law”), which prohibits employers from declining to hire a prospective employee based on pre-employment marijuana drug tests. On the heels of a new New York City law which prohibits employers from requiring pre-employment drug testing for marijuana and tetrahydrocannabinols (the active ingredient in marijuana), Nevada is now the first state to prohibit employers from using pre-employment drug tests to screen out applicants who use marijuana.

Under the Law, beginning January 1, 2020, employers in Nevada will be prohibited from denying employment to a prospective employee when that individual is required to take a drug test and the results of that drug test indicate the presence of marijuana. The Law also provides individuals who test positive for marijuana with the right to, at their own expense, rebut the original test results by submitting an additional drug screening test. This rebuttal procedure must take place within the first 30 days of employment. When the employee has chosen to rebut the original test results with a subsequent test, the employer must accept and “give appropriate consideration” to the results of the latter test.

The Law provides for a number of carve-outs and exceptions to the prohibition as follows:

Firefighters & Emergency Medical Technicians: Firefighters (defined as those who hold a license and either volunteer or are employed by firefighting agencies), and Emergency Medical Technicians (“EMTs”) (defined as those as having satisfactorily completed a program of training for certification as an EMT), are excluded from protection under the Law.

Motor Vehicle Operation: The Law does not apply to an employee who must operate a motor vehicle and submit to a screening test under federal or state law in order to operate the motor vehicle.

Employees who Affect the Safety of Others:  
If an employee, by the “determination of his or her employer,” could “adversely affect the safety of others,” then the Law’s protections will not apply to that employee. There is no further guidance as to what factors employers should consider in making this determination. Given the broad language of this provision, health care employees who provide patient care should be exempt from the Law.

Employment Contract or Collective Bargaining Agreement: The protections of the Law will not apply to the extent that they are inconsistent or otherwise in conflict with the provisions in an employment contract or in a collective bargaining agreement. The Law, however, is silent as to whether an employer may bargain to include such drug testing in a collective bargaining agreement or employment contract.  

Positions Funded by a Federal Grant: The Law’s protections do not apply to an employee who is in a position of employment “funded” by the federal government. Many federal contractors and all federal grantees must comply with the Drug Free Workplace Act (“DFWA”) and agree that they will provide a drug-free workplace as a precondition of receiving the contract or grant. Although the covered contractors and grantees must maintain a drug-free workplace, the specific components necessary to meet the requirements vary. The basic requirements do not include drug testing. Therefore, while many employers may perform drug testing in order to ensure compliance with the DFWA that does not mean that they are required to perform that drug testing. Thus, Nevada’s exception to employees “funded” by the federal government may exceed the requirements of the DFWA.

What Nevada Employers Should Do Now

To comply with this new law, Nevada employers should consider the following:

  • Review and consider whether to revise drug-testing requirements to ensure that they do not violate the new prohibition.
  • Revise pre-employment hiring procedures to account for employees’ right to rebut a pre-employment drug test that is positive for marijuana.
  • Review job classifications, and identify those that fit into one of the law’s exceptions for which such testing can still be required.
  • Train human resources personnel, as well as supervisors and managers, on any changes made to current policies and practices pursuant to the law, including permissive testing requirements during the pre-employment process, and on what may or may not be included in job postings.

Implications for Other States

Given the growing trend of laws that protect the use of medical and recreational marijuana and its derivatives, companies are increasingly reconsidering whether to require drug testing for applicants and employees. The Law in Nevada may be the first of its kind, but it is likely not the last, in light of rapidly changing attitudes about marijuana.  Indeed, Nevada Assemblywoman Nina Neal supported the Law despite opposing the earlier ballot initiative legalizing recreational marijuana because she did not want her constituents who lawfully used marijuana to be precluded from future employment.  It would not be surprising to see other states following Nevada’s lead, as they try to balance employers’ efforts to maintain safe and health work environments with a growing cannabis industry and increasing numbers of employees who lawfully use marijuana.

This post was written with assistance from Radhika Gupta, a 2019 Summer Associate at Epstein Becker Green.