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Keven Moore: Relaxing current drug-testing policies a bad move from risk-management prospective

As a risk control and safety consultant who fields risk management-related questions on a daily basis, it amazes me each time I am asked, “Should we continue to drug test our employees?”

During the last three decades, pre-employment and random drug testing the workforce has been a means to weed out costly, dangerous and undesirable employees. But now employees that smoke weed are becoming more desirable. Pun intended.

With record-low unemployment rates nearing full-employment rates in the U.S., and the spreading legalization of marijuana, many businesses are rethinking their drug-testing policies. The truth is, employers today are struggling to find and hire workers in this ever-tightening U.S. job market.

Employers are discovering that with the labor pool being so limited, it’s now impacting their productivity and growth, and many are forced to look for alternatives to qualify applicants.

In surveys conducted by the Federal Reserve last year, employers cited an inability by applicants to pass drug tests among reasons for difficulties in hiring. Failed tests reached an all-time high in 2017, according to data from Quest Diagnostics Inc. This is only going to get worse, as more and more people partake in state-legalized cannabis. In 2016, 4.2 percent of all urine tests came back positive, up from 4.0 percent in 2015 and the highest rate since 4.5 percent in 2004, according to the company.

During the past year, I have had more than a dozen clients tell me that they are unable to staff qualified employees. Several have said that they have actually witnessed potential applicants walk up to their front door and turn right back around without even picking up an application after seeing the sign “Drug-Free Workplace” on their front door.

One business owner, who runs a machine shop, stated last month to me that “Eight out of 10 potential entry level applicants will leave without filling out an application after discovering that they are a drug-free workplace employer.“

With this kind of pressure employers are now re-examining their existing company policies, practices and benefits as a way to remove hiring barriers and better fill jobs — and the drug-free workplace policy is front and center of that review for many.
One client, who contracts with one of the largest retailers in America, told me last month that even the retailer is now seriously looking to relax their drug-free workplace policy because they are so dire to find employees.

With recreational marijuana now legal in nine states and Washington, D.C., and medical marijuana legal in 29 states, more Americans are partaking in cannabis, leading business owners and human resource managers today to consider dropping their drug-testing policy all together or revising it to exclude the testing of marijuana.

Drug testing your work force has always seemed like a good idea, because every business wants to staff sober, addiction-free employees that have the personality to follow rules. Past studies have shown that non-drug users are more productive and safer employees, but when faced with an inability to staff correctly, employers are starting to waver.

We owe today’s drug-free workplace programs to Ronald Reagan’s war on drugs. In the 1980s, very few businesses were drug-testing their employees. Then in 1988 Reagan signed an executive order that led to legislation requiring federal employees and some contractors to be tested.

Employers in the private sector weren’t required to do anything differently (and still aren’t), but many took this as a cue and an entirely new industry blossomed overnight. Drug-testing manufacturers, testing facilities, laboratories, consultants and law firms specializing in the development of drug-testing policies and procedures were created.

The data is a little patchy, but according to a June 2015 article in the Business Insider article, the best estimate is that about 40 percent of U.S. workers are currently subjected to drug tests during the hiring process.

Another dated 2011 survey conducted by the Society for Human Resource Management found that 57 percent of employers conducted drug tests on all job candidates. I suspect that that number has dropped significantly as many states have legalized marijuana. For instance, a Colorado survey conducted by the Mountain States Employers Council (now called the Employers Council), says that in 2014, the year the state legalized marijuana for recreational adult use, they found that 77 percent of employers said they conducted drug testing, a figure that fell to 62 percent three years later.

Employers today are drug testing at a higher rate if they suspect a worker is impaired or after a workplace accident since on-the-job use rises to the level of negligence, particularly if it is a contributing factor to an accident.

When this happens it can become an issue with worker’s compensation. Many insurance carriers can and will deny coverage, or they will reduce a percentage of the coverage if a worker injures themselves while under the influence of drugs. This obviously varies by individual state.

Today’s opponents of the drug-free workplace policy are saying that companies are spending a significant amount of money to pinpoint a very small portion of the working population that is abusing their drug-free workplace policy. The costs for some employers to find a single drug user can be rather high.

Proponents for drug free workplace programs would argue that it’s about finding safe and good employees that follow rules. However, as these rules related to marijuana change, it is becoming less important for employers to screen out folks on the basis of marijuana use.

Nevertheless many industries like nursing homes, hotels, retail and restaurants are dropping this pre-employment screening in order to fill positions.

With more and more states legalizing marijuana, lager employers have started to relax their drug screening protocols, because of the disparity of legalization across the United States. For employers in multiple states, patchwork of regulations can be an administrative nightmare, and could leave a company vulnerable to a lawsuit if it fires an employee using marijuana in accordance with their state’s rules.

For small businesses these challenges have proven to be even more problematic to keep up with these changes, because they don’t have extensive HR and legal departments to help them sort through it all.

As a risk management and safety professional, I can safely say that the drug-free workplace program has saved thousands of lives and have prevented an incalculable number of injuries. OSHA still strongly supports measures that contribute to a drug-free environment and reasonable programs of drug testing within a comprehensive workplace program for certain workplace environments, such as those involving safety-sensitive duties such as operating machinery.

As a consultant I can understand the economic demands when it comes to properly staffing your company needs, but from a risk-management standpoint I still would have a hard time with agreeing to scratch your entire drug-free workplace policy.

If you are a defense contractor, or if your business is regulated by the Federal Department of Transportation, then you are still legally required to drug test for all illegal drugs at the federal level, including marijuana.

Similarly, if a job raises safety concerns — such as a forklift driver, an operator of heavy factory equipment, or a meat slicer — it’s in the best interests of the employer to still test for marijuana, even if it is legal in that state.

From a bottom-line standpoint, as it relates to your workers compensation and liability risk exposures, underwriters do take into consideration if you have a drug-free workplace policy. In addition, many states will even offer discounts towards your workers compensation policy. As of 2016, 13 states had laws that provide a discount to employers that implement a drug-free workplace. Some states offer as much as 7.5 percent discounts, but in Kentucky it is 5 percent.

As a consultant tasked with saving lives and preventing injuries that always errors on the side of safety, I still cannot come to terms with agreeing to remove your drug-free workplace policy even though I do understand the economic demands as it relates to staffing. And if you do and I show up at your door with higher accident trends, I promise to not say, “I told you so.”

Be Safe, My Friends

Keven Moore works in risk management services and is an expert witness. He has a bachelor’s degree from University of Kentucky, a master’s from Eastern Kentucky University and 25-plus years of experience in the safety and insurance profession. He lives in Lexington with his family and works out of both the Lexington and Northern Kentucky offices. Keven can be reached at kmoore@roeding.com.

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