Stay Informed! Employer Considerations Surrounding:  COVID-19

Cannabis and the War for Talent: To Test or Not to Test?

All, Property & Casualty, War For Talent

Employers everywhere are struggling to attract and retain a talented workforce. The war for talent has essentially created an environment in which employers need to find creative ways to position their organization as a desirable workplace to have enough workers to operate at an efficient and effective level.

One topic up for consideration: cannabis testing. Employers are seeking guidance around whether pulling cannabis off of their testing panels would encourage more applicants to apply for open roles, or whether it could put them in insurance or legal trouble. Employers who may take this step should discuss their specific situation with their insurance advisor and legal counsel, but we can provide some insight into factors you should consider before you take any action.

Background

First, remember that while some states have legalized specific use cases for marijuana, marijuana is classified as a Schedule I substance under federal law via the Controlled Substances Act (CSA).

As mentioned in one of M3’s previous articles on cannabis, “While the federal government continues to schedule cannabis products as illegal, states’ regulation of these products is not standardized. This situation adds complexity for employers when it comes to workplace policies, drug testing, discrimination and other employment issues.”

What does this mean for employers who want to stop testing for cannabis use as a strategy for attracting and retaining talent? It’s important to consider the insurance and compliance implications that could result from this decision.

Insurance Considerations

At the end of the day, most insurance carriers want employers to test for cannabis as part of their pre-employment testing, as well as pre- and post-accident testing. Some carriers require a drug-free work environment for renewal. Carriers see this as a reasonable risk management requirement in order to create a safe work environment.

In our last article about cannabis testing in the workplace, we put it this way, “The focus of a safe work environment includes prohibiting employees from using, being impaired by, or under the influence of marijuana while on the job, company premises, or during company time.”

Organizations who decide to remove cannabis testing from their policies could face consequences in the insurance marketplace.

CASE STUDY: Removing Testing Leads to Difficult Renewal

An organization decided to stop administering pre-employment drug testing after years of including this test as a part of their work policy. The organization experienced 4x the number of injuries, their experience mod went through the roof, and, ultimately, they were non-renewed by their insurance carrier.

The organization made the decision to move back to pre-employment drug testing. Since then, they have had a total of only three claims in two years, with no lost time claims in those two years.

From a Legal Perspective…

No matter if an employer makes the decision to test for cannabis or not to test, it’s imperative that policies are applied consistently and equally to every employee. Exceptions cannot be made in certain circumstances without risking exposures for the organization.

M3 detailed how common policies are being addressed in the current environment in this blog post.

Alternatives to Eliminating Testing

While there is a lot of buzz around eliminating cannabis testing as a means for recruiting more talent to fill open positions, there are alternatives to this idea that can help your organization accomplish your talent attraction goals without risking exposure.

Use premium savings to make improvements to work environment

In the case study mentioned above, the organization realized premium savings once they moved back to pre-employment drug testing and reduced their claims. They then used the savings to implement improvements to their work environment, including upgrading to safer equipment, providing training for professional advancement, and offering employees incentives, bonuses, and an upgrade to their pay scale. 

Update benefits to address social determinants of health

Employers are getting creative with their benefits in order to best serve their desired employee population. Once employers consider their employees’ social determinants of health, innovative solutions emerge that actually solve employees’ problems and make them more likely to rack up tenure at their place of employment.

Key Takeaways

Employers who want to win the war for talent have options beyond removing cannabis from their drug testing panels and policies. Reach out to your M3 account executive to discuss your current drug testing policies, your carrier’s requirements, and other strategies for attracting and retaining employees during the war for talent.

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