Three Compelling Reasons to Continue Testing for Marijuana

Note: We hosted a webinar on this topic in July 2021. If you find this information helpful, you may want to keep an eye on our social media. We plan to host another webinar in the fall! This information is provided for educational purposes only. Reader retains full responsibility for the use of the information contained herein. The ongoing movement to legalize marijuana from state to state is fraught with misinformation. For example, in a recent survey of employers conducted by the Current Consulting Group (CCG), 12.5 percent of those who said they were considering dropping marijuana from their drug test panel indicated it was because testing for marijuana was not permitted in the states where they have business operations. Nothing could be further from the truth. Drug testing for marijuana is legal in all 50 states. We also know: 1) marijuana use is up, 2) marijuana positive test results in the workplace are up, and 3) marijuana-related traffic accidents and fatalities are up. This means that there are more workers using marijuana, at work under the influence of marijuana, and exposing their employers to greater exposure to legal liability through increased possibility of accidents. Those three trends form a strong argument in favor of continuing to drug test candidates and employees for marijuana; yet they are may not even be the three most compelling reasons to continue testing for marijuana. Employers who may be considering dropping marijuana from their drug test panel should think again.  

Three Compelling Reasons

Reason #1—Thriving vs. Surviving. The legalization of marijuana has resulted in more people using marijuana and more employees testing positive. It stands to reason, therefore, that as more states legalize pot or Congress legalizes it federally, usage and positive test results will increase exponentially. And along with the dramatic increase in usage will come a predictable increase in all the negative side-effects of marijuana use by workers: more workplace accidents, more workers’ compensation claims filed, more usage of health care benefits, more turnover, more absenteeism, and less productivity. All of that combined puts employers in a constant state of playing defense unless they take a stand on marijuana use in the workplace. And in all 50 states, employers still have the right to prohibit employees from using marijuana on the job, bringing marijuana into the workplace, and being at work impaired by or under the influence of marijuana. And that is not likely to change no matter how many states legalize marijuana. A marijuana-free workplace is one with fewer accidents, higher productivity, and less turnover. Such a workplace gives employers a chance to grow their business, increase profitability, and attract and retain satisfied customers and clients. It is the difference between simply surviving as a company and thriving. Reasons #2—The Best Employees vs. Just Any Employees. A company is only as good as its workforce. In the same sense that marijuana-impaired workers are less safe and less productive, conversely drug-free workers are safer and more productive. While it is true that there is a so-called labor shortage in America in 2021, drug testing is not the cause of that shortage. Dropping pre-employment drug testing for marijuana, for instance, will not necessarily result in more people applying for work, but it will result in more current marijuana users applying for work, getting hired, and bringing their less-safe, less-productive behavior with them. In a survey of admitted drug users who were employed full-time, 40 percent said they were less likely to work for a company that conducted random drug testing and 30 percent said they were less likely to work for a company that conducted pre-employment testing.^[i] For a moment, let’s assume that the vast majority of employers would prefer to hire non-drug users or people who are deterred from using drugs because their employer conducts drug testing. If so, then those employers, the vast majority, would not want to hire the 30- and 40-percent who don’t want to work for companies that conduct drug testing. Now consider a recent federal government report that claims 14.3 percent of full-time workers are current drug users (and considering that marijuana is by far the number one illicit drug of abuse, most if not all of them are marijuana users).^[ii] Conversely, about 85 percent of full-time workers are not current drug abusers and probably do not want to work side-by-side with drug-abusing co-workers. From among those who make up the 85 percent employers will find workers who, by comparison, are less likely to cause an accident, file a workers’ compensation claim, over utilize health care benefits, quit or get fired, miss work, and who will be two-thirds more productive. A company’s employees are the company. Products and services are produced or delivered by employees. Employees are the public face of the company. Drug testing for marijuana helps employers hire the best possible employees and not just any employees. Reasons #3—Legal Defensibility vs. Legally Bankrupt. Marijuana may be legal in some states, but that does not mean that everything an employee does while high on marijuana is legal. The legalization of marijuana has not suspended the laws of negligent hiring and respondeat superior that hold employers legally liable for accidents, property damage, fatalities, theft, fraud and other bad acts caused or committed by employees. As an example of the liability an employer is exposed to, we can look to the Kentucky case of Allgeier v. MV Transportation Inc. A jury found the employer liable under the doctrine of respondeat superior, as well as negligence in hiring and training, and was ordered to pay almost $5 million in compensatory and punitive damages. In that case, the employer was unaware that an employee was an alcoholic living in a rehabilitation center when she was hired. The employee caused an accident that injured a customer. Although the employer had a post-accident drug testing policy, it did not test the employee until two and a half hours after the accident, at which time she tested negative. Legal marijuana is no defense for the employer who could’ve and should’ve known by conducting pre- and post-hire drug testing for marijuana that an employee was a safety risk. Testing for marijuana may be the difference between a viable legal defense and legal bankruptcy.  

Measuring the ROI of Testing for Marijuana

We know that employees who use marijuana are less productive and more likely to cause an accident and to file a workers’ compensation claim. But what does all of this cost employers? How does marijuana effect a company’s bottom line? According to a 2020 report from the University of Chicago, the average annual cost of each substance abusing employee is $8,817.^[iii] These types of evaluations take into account costs associated with turnover, lost productivity due to increased absenteeism and tardiness, accidents and medical expenses. Marijuana users are more likely to cause a workplace accident and file a workers’ compensation claim, so let us examine those costs to get a more realistic vision of the cost of substance abuse by drug-using employees. Consider these figures from the National Safety Council as reported by AmTrust Financial:

• The total one-year cost of work-related injuries equals $161.5 billion.
• That comes out to $1,100 per worker (including “the value of goods or services each worker must produce to offset the cost of work injuries”).
• The average cost per worker death is $1.15 million.
• The average cost per medically consulted injury is $39,000.^[iv]

According to these figures, a marijuana-using employee who is nearly 4 times more likely to cause a workplace accident would cost his or her employer much more than $8,817 per year. One accident alone could result in tens of thousands of dollars in additional expenses. Just focusing on workers’ compensation costs, the average cost for all claims combined in 2017-2018 was $41,003.^[v] The same report found that “the most costly lost-time workers’ compensation claims by cause of injury result from motor-vehicle crashes, averaging $78,466 per workers’ compensation claim filed in 2017 and 2018.”^[vi] Now let’s try to make sense of these figures for the purpose of calculating a return-on-investment in drug testing:

1. Drug users are 3.6 more likely to be involved in an accident than a non-drug using employee.^[vii]
2. Drug users are 5 times more likely to file a workers’ compensation claim.^[viii]
3. The average cost of a “medically consulted injury” is $39,000 (see above).
4. The average cost of a workers’ compensation claim is $41,003, though it is much higher for certain types of claims such as motor vehicle crashes (see above).
5. The average cost of a drug test is $40 (this is an arbitrary figure, the cost of a drug test is impacted by many factors including the method of tests, number of drugs tested for, when and where the collection takes place, total volume of tests conducted annually, etc.).

If a company spends $40 on a pre-employment test for marijuana and avoids hiring just one marijuana user, it will reduce the cost of doing business by at least $8,817 (according to the University of Chicago). But if it fails to screen out the marijuana user, it has hired a person who is more likely to cause an accident. If that accident results in a “medically consulted injury” it could cost, on average, $39,000. If that injury involved a motor vehicle crash and resulted in a workers’ compensation claim, it could cost, on average, another $78,466. Now consider the fact that many states’ workers’ compensation regulations allow employers to move to deny a workers’ compensation claim if the employer can show, via a positive drug-test result, that the injured worker had marijuana in his or her system at the time of the accident. In that situation, the company that tests for marijuana saves as much as $78,466 while the company that dropped marijuana from its drug-test panel incurs that cost. And to add insult to injury, pardon the pun, the cost reduction realized by dropping marijuana from a drug-test panel is often zero. In other words, the employer who chooses not to test for marijuana will save zero per test while at the same time exposing his or her company to tens of thousands of dollars of potential liability in accident-related costs for each marijuana user it hires. Some states that have legalized marijuana require employers to prove an individual who tests positive was impaired at the time of the drug test before taking adverse employment action. Proof of impairment can consist of many things, including a pattern of aberrant behavior, recklessness, workplace violence, employee theft, accidents, and myriad other issues. When this type of behavior is thoroughly documented, the positive marijuana drug-test result is just one of several items the employer can use to justify adverse employment action.  

Conclusion

There are many reasons why a company should continue testing for marijuana. The fact that marijuana use is on the rise, that more employees are testing positive for marijuana, and marijuana-related traffic fatalities is increasing should be reason enough for most employers. But if owning a thriving successful business, with productive and safe workers, and staying out of court is important to you, testing for marijuana should remain an important and indispensable priority. © 2010-2021 The Current Consulting Group, LLC – No portion of this article may be reproduced, retransmitted, posted on a website, or used in any manner without the written consent of the Current Consulting Group, LLC. When permission is granted to reproduce this article in any way, full attribution to the author and copyright holder are required. This is for the record. For The Public Record is a monthly blog featuring thought leadership from the most seasoned experts at ClearStar, across all functions of the background screening process. Click here to subscribe.

[i] Why Drug Testing. Current Consulting Group. William F. Current. Page 34. [ii] National Survey on Drug Use and Health. Table 1.24B – Illicit Drug Use in Past Month among Persons Aged 12 or Older, by Age Group and Demographic Characteristics: Percentages, 2018 and 2019. SAMHSA. August 2020. https://www.samhsa.gov/data/sites/default/files/reports/rpt29394/NSDUHDetailedTabs2019/NSDUHDetTabsSect1pe2019.htm [iii] New Analysis: Employers Stand to Save an Average of $8,500 for Supporting Each Employee in Recovery from a Substance Use Disorder. University of Chicago. December 2020. https://www.prnewswire.com/news-releases/new-analysis-employers-stand-to-save-an-average-of-8-500-for-supporting-each-employee-in-recovery-from-a-substance-use-disorder-301183912.html [iv] Cost of Workplace Injuries & Accidents. https://amtrustfinancial.com/blog/loss-control/workers-compensation-injury-costs [v] NSC. National Council on Compensation Insurance’s (NCCI) Workers Compensation Statistical Plan. https://injuryfacts.nsc.org/work/costs/workers-compensation-costs/ [vi] Ibid. [vii] Why Drug Testing. Current Consulting Group. William F. Current. Page 10. [viii] Ibid.

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