California Protects Employees Who Use Recreational Cannabis and Limits Drug Tests

June 5, 2023

Effective Jan. 1, 2024, California law will restrict employers from using traditional drug tests to test for cannabis use. California Gov. Gavin Newsom signed the law on Sept. 18, 2022, prohibiting employers from discriminating against an employee based on off-site cannabis use or detection of nonpsychoactive cannabis metabolites.

Traditional Drug Tests, Nonpsychoactive Metabolites and Impairment

Delta-9-tetrahydrocannabinol (THC) is the primary chemical compound in cannabis that causes impairment and psychoactive effects. When cannabis is consumed, the human body metabolizes the THC compound and breaks it down into nonpsychoactive cannabis metabolites. These metabolites are then stored in the body for extended periods of time.

Traditional drug tests screen for nonpsychoactive cannabis metabolites in hair and in bodily fluids such as blood or urine. Because these metabolites can be stored in the body for weeks or months after cannabis use, a positive test does not indicate that an employee was impaired at the time of testing. Instead, the test indicates only that the individual consumed cannabis at some unspecified point in the past.

According to the new law, the intent of drug tests is to identify impairment at work, but by testing for nonpsychoactive metabolites, such tests do not fulfill that purpose.

The New Law

The new law, codified at Cal. Gov’t Code § 12954, prohibits employers from discriminating against applicants and employees based on: (1) the person’s use of cannabis off-duty and off-site; or (2) an employer-required drug test that reveals nonpsychoactive cannabis metabolites. Employers can, however, penalize applicants and employees based on drug screenings that test for THC.

This is a change to existing law, because in 2017, when voters approved the legalization of recreational marijuana, the law did not restrict employers’ ability to have policies prohibiting the use of cannabis by employees and prospective employees. The 2017 law was consistent with the California Supreme Court’s 2008 decision holding that employers were not required to accommodate employees’ use of medicinal marijuana.

What Tests Are Permissible?

The new California bill effectively prohibits tests that rely on or test for nonpsychoactive marijuana metabolites. However, there are two types of tests employers still might be able to implement.

The first type of test is what the law calls an “impairment test,” which “measure[s] an individual employee against their own baseline performance.” These tests are administered through a phone or tablet application that measures cognitive and psychomotor capabilities against a rolling baseline score specific to that individual’s cognitive function. These tests look for any impairment, regardless of cause, such as stress, fatigue, distraction and narcotics. If the employee’s test result diverges materially from the employee’s baseline, it indicates possible on-site impairment without identifying the source. While these tests might satisfy the new California law, they can present other legal risks. Several such tests are available on the market, and McGuireWoods can help evaluate whether they are right for an individual business.

The second type of test is a THC test, because the new law allows tests that screen for psychoactive THC instead of nonpsychoactive metabolites. For example, several companies advertise a breathalyzer that screens for THC but not nonpsychoactive metabolites. These companies advertise they can detect THC within a few hours after an individual uses cannabis, thus allowing employers to isolate cannabis use during or immediately preceding the workday. These breathalyzer tests are primarily in research and development, although the technology likely will be more widely available in the near future. Again, McGuireWoods can assist employers considering adopting new technology as part of a drug testing program.

Employers and Employees Exempt From the New Law

The new law applies to almost all private employers, employees and applicants, with few exceptions. It does not apply to: (1) employees in the building and construction trades; (2) positions requiring a federal background investigation or security clearance; (3) positions required to be tested for drugs pursuant to other state or federal laws or government contracts.

Employers still may prohibit employees from possessing, being impaired by or using cannabis on the job. This means employers can still maintain a drug-free workplace. It also does not affect rights or obligations of an employer specified by federal law or regulation.

For questions about these changes, or about any other California employment law, contact the authors of this article or another member of the McGuireWoods labor and employment team or cannabis, hemp and CBD team.