Medical Marijuana is Legal in Pennsylvania . . . Does Your Drug Testing Policy Have to Go Up in Smoke?

On April 17, 2016, Pennsylvania Governor Tom Wolf signed the Medical Marijuana Act (MMA), which legalizes medicinal marijuana in Pennsylvania. The MMA, which takes effect on May 17, 2016, includes various provisions related to employment, and we have received many questions regarding what employers must, can and cannot do as a result of the new law. The simple answer is that, for the time being, we do not believe that employers are required to take immediate action. No immediate changes to your drug and alcohol policies or how you deal with drugs in the workplace are necessary for now, but stay tuned.

The MMA requires the Department of Health (“Department”) to promulgate full regulations within 18 months, and the Department is also required to begin publishing temporary regulations no later than six months from the Act’s effective date. Accordingly, we expect further guidance before the end of 2016 and anticipate frequent changes to the rules and regulations surrounding the MMA and its interpretation thereafter.

So, what do you need to know about the law now?

  • The MMA contains an employment anti-discrimination provision that states as follows:

No employer may discharge, threaten, refuse to hire or otherwise discriminate or retaliate against any employee regarding an employee’s compensation, terms, conditions, location or privileges solely on the basis of such employee’s status as an individual who is certified to use medical marijuana. MMA §2103(b)(1).

This anti-discrimination provision seems clear; however, it does raise some unanswered questions.  Although more than 20 other states have legalized medicinal marijuana, for purposes of the MMA, an “individual who is certified to use medical marijuana” seemingly refers only to individuals certified under Pennsylvania law. It is unclear whether an employee who is certified in another state would be entitled to the protection of §2103(b)(1).  Also, keep in mind that it will take some time for Pennsylvania to implement the regulatory framework to begin the certification process, set up dispensaries and begin actually distributing marijuana.

  • Employers are not required to accommodate the use of medical marijuana at work and employers retain the ability to discipline employees for using marijuana at work. Along these lines, the MMA provides:

Nothing in this Act shall require an employer to make an accommodation for the use of medical marijuana on the property or premises of any place of employment. This Act shall in no way limit an employer’s ability to discipline an employee for being under the influence of medical marijuana in the workplace or for working while under the influence of medical marijuana when the employee’s conduct falls below the standard of care normally accepted for that position. MMA §2103(b)(2).

While employers retain the right to discipline users of medical marijuana if they are “under the influence” at work, we do not yet know what is meant by “under the influence.” It remains to be seen which definition of “under the influence” will apply to potential employee discipline.

  • The MMA prohibits certified users from performing certain safety-sensitive jobs while “under the influence” of medicinal marijuana, including: (1) operating or being in physical control of chemicals which require a permit issued by the federal government, state government, federal agency or state agency; (2) operating or being in control of high-voltage electricity or any other public utility; (3) performing any employment duties at heights or in confined spaces, including, but not limited to, mining; (4) performing tasks that the employer deems life-threatening to either the employee or any employees of the employer; and (5) performing any duty that could result in a public health or safety risk. MMA §510.
  • The MMA does not require employers to “commit an act that would put the employer or any person acting on its behalf in violation of federal law.” MMA §2103(b)(3). For example, an employer would not be required to accommodate medicinal marijuana use if such accommodation violates federal DOT regulations.
  • The MMA does not, currently, supersede an employer’s rights under the ADA. For example, under current interpretations of the law, employers are not prohibited by the ADA from discharging an employee who tests positive for marijuana, even if the use is pursuant to a valid prescription. This could change, however, as the MMA evolves and as we further understand how “under the influence” will be defined in Pennsylvania. Further, the EEOC may change its position on the protected nature of medical marijuana as more states allow its use.

As with any new law, we have much left to learn. The McNees Labor and Employment Group will be closely monitoring the implementation of the temporary and permanent MMA regulations. We will keep you advised as things develop and are hopeful that the temporary regulations will address some of our unanswered questions, including: (1) what is meant by “under the influence;” and (2) whether the anti-discrimination provisions apply to those certified to use medical marijuana in other states. In the meantime, should you have specific questions about the law, your policies or your employees, please do not hesitate to contact any member of the McNees L&E Group.

Fraud Alert: Computer Hackers Target HR and Payroll Departments – Guard Your W-2s!

Have you by chance recently received an email from your company’s CEO requesting copies of employee W-2 forms?  If so, don’t respond without first verbally confirming that the request is legitimate.  Several of our clients in Pennsylvania have reported receiving such fraudulent emails.  These emails are part of a broad “spoof” scheme launched by computer fraudsters with the goal of gaining unauthorized access to individual tax records.  The emails are typically sent to HR professionals from a high-ranking company officer and “kindly request” a file containing employee W-2 forms.  The thieves then use the personal information on W-2 forms (i.e. names, addresses, social security numbers, and earnings information) to file false tax returns and commit other forms of identity theft.  This scam is not limited to central Pennsylvania.  On March 1, 2016, the IRS issued a notice alerting employers of the scheme.  The IRS notice contains additional information and can be viewed by clicking here.

If you suspect your company may have released W-2 forms or other personally identifiable information to unauthorized parties, be sure to promptly comply with federal and state laws governing data breach notifications.  Companies with employees in multiple states will need to comply with the varying requirements of each state.  If you have any questions regarding your obligations under data breach notification laws, please contact any member of the McNees Privacy & Data Security Group or the McNees Labor and Employment Practice Group.

Coming This Spring . . . the New FLSA Overtime Regulations?

For what seems like an eternity, we have been waiting for the U.S. Department of Labor to issue the new Fair Labor Standards Act “white-collar” overtime exemption regulations. While many have speculated on when the final regulations would be issued, most assumed that the DOL would wait until the summer or fall of 2016 to issue the new regulations.

In a somewhat surprising move, the DOL on Tuesday sent its final regulations to the Office of Management and Budget (“OMB”) for its review. OMB review is the final step in the rulemaking process and can take anywhere from a few weeks to a few months. After completion of OMB review, the final rule will be published in the Federal Register and likely take effect 60 days after publication.

It now appears that, rather than in late 2016, the new FLSA white-collar overtime regulations will be issued this spring or early summer. We do not yet know what the final regulations will contain, but based on the content of the proposed regulations issued last June, we can assume that the changes to the FLSA white-collar exemptions will be significant and result in many currently exempt employees losing their exempt status. Specifically, we expect a sizable increase in the minimum salary requirement, as the proposed regulations would double the current $455 minimum weekly salary requirement to approximately $970 (i.e., over $50,000 per year).  In addition, we anticipate changes to the duties tests for a number of these exemptions, the details of which are currently unknown.

With Tuesday’s news, it is even more vital for employers to consider how they will respond to the new overtime exemption tests.  Many employees currently treated as exempt from overtime will need to be reclassified as non-exempt or otherwise have changes made to their compensation and/or duties to remain exempt.  Employers likely will have only 60 days to respond to the new rules and make necessary changes to employees’ compensation and overtime exempt status.  Now is the time for employers to consider the impact that the anticipated changes would have on the status of their exempt workforce and determine next steps.

DOL Releases Proposed Rules Regarding Mandatory Paid Sick Leave for Employees of Federal Contractors

The United States Department Labor recently issued a Notice of Proposed Rulemaking to enforce President Obama’s September 2015 Executive Order establishing paid sick leave for federal contractors. Now that we have been able to digest the lengthy proposed rules, we wanted to share some of our thoughts about the proposed rules with you.

What do the proposed rules say?

The proposed rules require certain federal government contractors and subcontractors to annually provide their employees with up to seven (7) days of paid sick leave. The leave can be utilized for the employee’s own illness, to attend a doctor’s appointment, to care for a sick family member, or for absences related to domestic violence, sexual assault, and stalking.

If finalized, when will the proposed rule go into effect?

If the proposed rule is not challenged, it is expected that the rules will apply to certain contracts entered into with the federal government on or after January 1, 2017.

Will this proposed rule impact every federal contractor?

No. It will only impact four types of contractual agreements: 1) procurement contracts for construction covered by the Davis-Bacon Act; 2) service contracts covered by the Service Contract Act; 3) concessions contracts for services on federal lands (i.e. the snack stand at a national park); and 4) contracts in connection with federal property or land rentals/leases. So, if your company manufactures widgets for the federal government, the proposed rule likely does not apply to you. However, if your company is constructing a building for the federal government, providing a service to the federal government, renting space from the federal government or vice versa, your company is probably covered by the new rule.

Does the proposed rule apply to all employees or just the employees servicing federal contracts?

The proposed rule only applies to persons engaged in performing work on a covered federal contract. The regulations provide that an employee who spends more than 20% of his/her working time performing services in connection with a covered federal contract is also covered under these rules. However, as a matter of practice, it may be difficult to explain to your workforce why some employees are entitled to paid sick leave and others are not.

Under the rule, will employees automatically be entitled to paid sick leave?

No. The rule requires contractors to allow employees to accrue at least one (1) hour of paid sick leave for every 30 hours worked on a covered federal contract. The proposed rule envisions that contractors will be able to limit the amount of paid sick leave to 56 hours each year but must permit employees to carry over accrued, unused paid sick leave from one year to the next. Even though rollover is required, a contractor can prevent an employee from accruing additional sick leave in excess of 56 total hours.

The proposed rule requires the contractor to provide employees with at least a monthly update on the amount of paid sick leave the employee has accrued but not used. Employees will be permitted to take sick leave in increments of no greater than 1 hour.

How does an employee request paid sick leave under the proposed rule?

The proposed rule requires that the employee request (orally or in writing) the ability to take leave at least 7 calendar days in advance of foreseeable leave and as soon as practicable in all other cases. Worried the employee is faking it? The proposed rules only allow a contractor to require certification from a physician or other provider if the absence is for three or more consecutive days.

Is this really a big deal?

Assuming the new rules apply to your business, probably! Most American business already provide some type of paid time off or paid sick leave to their employees—and most provide in excess of seven (7) days. The Department of Labor estimates that this new proposed rule will only impact a relatively small number of people—about 437,000 employees—who currently receive no paid sick leave. But, because the proposed rule provides specific instructions regarding accrual, use, requests for leave, and rollover, this rule could impact how many employers administer their PTO and/or sick leave policies. The provisions regarding domestic violence, sexual assault, and stalking are also unique.  If certain requirements are met, a contractor’s existing paid sick leave or PTO policy could meet the requirements of the rule.

How can I let the federal government know my feelings on the proposed rule?

Provide comments by clicking on this link. You have until April 12, 2016 to do so.

Interested in learning more? Check out this Department of Labor Fact Sheet, shoot us an email, or give us a call. As this proposed rule moves toward final implementation, we are happy to assist you in developing a sick leave and/or PTO policy that complies with the President’s Executive Order.


Pa. Wiretap Laws Forbid Use of Smart Phone Apps to Record Conversations

The Pennsylvania courts have delved into the “App Store,” addressing for the first time the use of smartphones and their applications in the context of illegal wiretapping.

Pennsylvania’s Wiretap Act forbids the “interception” of private conversations using an “electronic, mechanical, or other device,” unless all of the participants consent to that recording.  State laws like this one, as well as federal wiretapping laws, explain why you have often heard messages from telemarketers informing you that your call may be recorded “for quality assurance purposes.”  Such a warning, and your continued participation in the call, indicates that you have consented to the recording.  Without such consent, the recording of an otherwise private conversation constitutes illegal interception of a conversation, which is a felony criminal offense.

In 2014, in Commonwealth v. Spence, the Pennsylvania Supreme Court departed from this “dual consent” standard, finding that the Wiretap Act does not prohibit the surreptitious interception of private communications, so long as that interception is accomplished using a telephone rather than some other “device.”  In that case, a state trooper used an arrestee’s phone to call his drug dealer, then gave the phone back to the arrestee and instructed him to activate the speaker function.   The drug dealer incriminated himself during the phone call, and was arrested.  Challenging his arrest, the dealer argued that his private conversation with the arrestee had been illegally intercepted by the state trooper.  The court disagreed, finding that Pennsylvania’s General Assembly had deliberately excluded telephones from the definition of “electronic, mechanical, or other device.”  Because the state trooper had not used any “device” other than the telephone itself to record the call, the Wiretap Act did not forbid his actions.

In February, in Commonwealth v. Smith, the Pennsylvania Superior Court considered this exception for use of a “telephone” in light of “evolving technological advances of the modern day smartphone.”  In Commonwealth v. Smith, an employee was charged with interception of oral communications after he recorded a conversation he had with his former boss during a private meeting.  Without the boss’s knowledge or consent, the employee began recording the conversation with his iPhone’s “Voice Notes” app to capture statements regarding an ethics complaint.  After this recording was discovered during the employee’s wrongful termination lawsuit, the employee was charged with a felony violation of the Wiretap Act.

The Superior Court had to decide whether the Act’s exception for interception by use of a “telephone” encompassed today’s smartphone capabilities.  The court found the use of a smartphone app constituted the illegal use of an “electronic, mechanical, or other device” rather than the use of a “telephone” permitted by the exception to the wiretapping law.  The court ruled that, “[a]lthough [the employee] used an app on his smartphone, rather than a concealed tape recorder, to surreptitiously record his conversation with [his former boss], the result is the same. His actions constituted a violation of [the Wiretap Act].”

The case offers another example of the care that must be taken before recording a private conversation in Pennsylvania.  Without explicit consent from the participants, such recording is illegal.  This is true whether the conversation is captured on surveillance video, a tape recorder, or a smartphone app.

Devin Chwastyk is chair of the Privacy & Data Security group at McNees Wallace & Nurick.  He counsels organizations with regard to data security policies and in responding to data breaches.