Legal cannabis use by employees could deny firms projects under the IIJA

The Infrastructure Investment and Jobs Act (IIJA) will flood states with financial grants to develop projects that many states would never be able to accomplish otherwise. Without federal funding, low-tax states or those with tremendous needs for remedial and new infrastructure projects would be unable to pay for developments that create jobs and economic growth. However, with federal funding comes federal rules, and one that could put design firms in jeopardy is the federal prohibition on the use of cannabis products.

Cannabis remains illegal under federal law. The Drug Enforcement Administration classifies the drug as a schedule 1 narcotic. That prohibited status is likely to continue for the near future. This issue creates additional uncertainty for design firms in states where the drug has been decriminalized.

State law vs. federal law

California was the first state to legalize medical marijuana in 1996. In 2012, Colorado and Washington were the first states to decriminalize recreational cannabis. As of April 2022, marijuana is legal for recreational use in 18 states and medical use in 37 states. On a federal level, all marijuana usage remains illegal. The federal government classifies marijuana, along with heroin and cocaine, as a drug with high potential for abuse and little to no medical benefit. Because of the conflict between federal and state law, design firm employees in some states can find themselves using marijuana in compliance with state law while simultaneously violating federal law. 

Passed in 1988, the Drug-Free Workplace Act (DFWA) requires employers to make a “good faith effort” to maintain drug-free workplaces and prohibits the use, distribution, and possession of drugs on federal contracting worksites; and it applies to cannabis. The law also requires that contractors implement drug-free workplace policies and that they take direct action against an employee convicted of a workplace drug violation. This action could involve a number of disciplinary measures, such as requiring the employee to participate in an appropriate rehabilitation program or terminating their employment.

Under the DFWA, any company that receives a federal contract of at least $100,000 and any organization that receives a federal grant of any amount must maintain a drug-free workplace policy and a drug-free awareness program. The drug-free policies apply to contract employees who are directly engaged in the performance of contract work. While the DFWA only covers employees working directly on the grant, it’s advisable to have a drug-free workplace for all employees.

Federal contract conditions must be maintained throughout the life of the contract. A contract may be suspended, debarred, or terminated if a contractor violates the DFWA. Contractors and individuals that have been debarred will not qualify for federal contracts for a period of up to five years. Additionally, companies that fail to inform the relevant federal agency of drug violations may also face contract suspension, debarment, or termination.

Risk of federal action

Design firms have little guidance on how to address the concerns over the differences between state law and federal law, let alone how the use of cannabis by employees might affect their performance. The receipt of federal contracts requires compliance with federal regulations, and firms will need to evaluate carefully their policies in light of conflicting federal and state legislation. To comply with federal law, specifically the DFWA, employers must follow specific requirements even though they might seem inapplicable to marijuana use (whether for medical or recreational purposes) allowed under state law:

  • Publish a statement notifying employees that the unlawful distribution, possession, or use of a controlled substance is prohibited in the workplace and specify what actions will be taken for violations of the prohibition.
  • Ensure that each employee engaged in the performance of a federal contract receives a copy of the statement.
  • Notify employees that as a condition of employment, the employee must abide by the statement and notify the employer of any criminal drug statute conviction for a violation occurring in the workplace no later than five days after the conviction.
  • Establish a drug-free awareness program to inform employees of the dangers of drug abuse in the workplace, the drug-free workplace policy, available drug counseling, rehabilitation, and employee assistance programs, and the potential penalties for violations.
  • Notify the contracting agency within ten days after receiving notice of an employee’s drug conviction.
  • Impose a sanction on any employee who is convicted of a criminal drug offense, or require participation in a drug abuse assistance or rehabilitation program.

Policies on impairment

Despite the uncertainty surrounding the issue of federal prohibition of marijuana use by government contractors, some firms have focused not on specific drug use, but on the impairment drugs can cause. These firms incorporate procedures such as the following:

  • Create a culture of zero tolerance to avoid any impairment on the job from any substance.
  • Write a clear testing policy that includes which positions require tests, when tests will occur, standard penalties for failed tests, and what accommodations the firm will consider, such as for medical marijuana use.
  • Train supervisors on how to identify and respond to potential substance impairment.
  • Educate your employees so that there is a clear understanding of your drug policies and procedures.
  • Have employment law legal advisors regularly review the firm’s drug testing requirements.
  • Consult with experts about the latest developments relating to legislative developments and court rulings on marijuana use and drug testing.

Federal law preempts state law when state contractors perform federally funded contracts. As long as the federal government still considers cannabis as a schedule 1 drug and prohibits its use, design firms should be cautious about its use by design firm employees providing services on federal grant or directly funded projects.

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