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SHOULD EMPLOYERS CONSIDER DELETING POT FROM THEIR DRUG TESTS?

The U.S. is currently experiencing the tightest labor market in 17 years.  At the same time, marijuana is becoming more widely accepted in the U.S., as about two-thirds of Americans support its legalization.  More than half dozen states have legalized pot for recreational purposes, and 29 states have legalized it for medical purposes.  Employers do not screen applicants for alcohol, so in this type job market, some are asking why screen for pot?

Other considerations are involved.  Pot stays in one’s system for approximately a month, and thus a person may be disqualified from employment for minor recreational use some time ago.  Further, pot does not create the same dehabilitation features during work as does alcohol and many other drugs, but it does have other adverse effects on the body.

                                            

There are some countervailing considerations, however.  If a significant portion of the employer’s business comes from federal contracts, the employers are subject to the Drug-Free Workplace Act of 1988, which requires such employers to prohibit employees from engaging in the unlawful possession or use of any controlled substance, including marijuana.  Employers must still test for pot under Department of Transportation rules for those to which the rules apply.  Many are concerned because U.S. Attorney General Jeff Sessions rescinded the Obama-era policy that did not enforce federal drug laws in states in which pot was legalized.  U.S. attorneys thus can now bring drug cases in the 29 states where cannabis is legal, but most do not expect many of these cases to be brought.  In any event, the employment of pot users is not against the law, particularly if employers do not allow pot consumption on their premises.

There are special public relations issues, as most employers that have ceased testing for pot do so without fanfare.  AutoNation, for example, no longer refuses to hire applicants who test positive for marijuana in drug screenings, and they made the change silently two years ago.  AutoNation still rejects those who test positive for other illegal drugs.

ICE CONDUCTS "OLD-FASHIONED" RAID OF TENNESSEE MEAT PACKING PLANT

Immigration & Customs Enforcement (ICE) officials on April 5, 2018 conducted a "raid" on a meat packing plant in Bean Station, Tennessee, near Knoxville.  One distinction between a "raid" and an "inspection" is that a raid is accompanied by a warrant that requires immediate access to the property.  An inspection or audit in contrast begins when a business receives a Notice of Inspection, which states that the employer must produce its Form I-9s to an ICE auditor.  By law, unless a search warrant allows immediate seizure of documents, an employer must be given three (3) business days to produce the documents requested by the Notice of Inspection.

In contrast to audits or inspections, employers are not notified of raids and raids usually occur in very serious situations.  At the Tennessee location, where the authorities executed a search warrant, the facility allegedly failed to report $8.4 million in wages and to pay at least $2.5 million in payroll taxes for undocumented workers.  The workers were allegedly paid in cash and subject to harsh conditions.  During the course of the raid, ICE arrested some 97 immigrants suspected of being in the country illegally.  In ICE raids, it is not uncommon for the premises to be surrounded by ICE officials to prevent anyone from leaving. 

The action was described as the largest single workforce raid since the Bush Administration and the implementation of the raid reminded one of those conducted during that administration.  State and local authorities participated in the raid and streets were blocked.  In a federal affidavit, officials said the family-run plant is under criminal investigation for allegedly evading taxes, filing false tax returns and hiring immigrants in the country illegally.

Last October, the acting ICE director indicated that there would be a four- to five-fold increase of ICE enforcement efforts.  During the Trump Administration so far, there has been more than a one-third increase in immigration arrests and deportations. 

Employers should carefully review any warrant to understand its scope, as the warrant should have a detailed description of when and where agents are going to search and what they may seize.  Obviously, employers should be polite to the officers and not obstruct them from doing their jobs.  Employers are not required, however, to answer ICE questions during a raid and advice of counsel should be sought as to whether employers should consent to ICE agents speaking to their employees on the premises.  Employers must learn their rights during a raid and develop protocols to follow if an audit or raid occurs.

EXEMPTIONS TO WAGE-HOUR LAW NO LONGER TO BE NARROWLY CONSTRUED

An April decision of the U.S. Supreme Court has important ramifications beyond its ruling pertaining to auto dealerships.  Encino Motor Cars, LLC v. Navarro, No. 16-1362 (U.S. 4/2/18).  The overtime rule exempts any salesman, partsman or mechanic primarily engaged in selling or servicing automobiles, trucks or farm implements.  The lower court ruled that exemptions should not apply to the service advisor because they did not sell automobiles and did not engage in the manual labor of maintaining or repairing vehicles.  The employee argued that the exemption from overtime applied to those whose duties involved selling or servicing vehicles, even if they did not perform the manual tasks themselves.  The Obama Administration had supported their position on the issue.

In the current ruling, the Court objected to the narrow construction concept that exemptions should be narrowly construed in a way that provides the greatest possible benefit to a worker.  Justice Clarence Thomas, writing for the majority, stated: "We reject this principle as a useful guidepost for interpreting the FLSA."  Justice Thomas, joined by four other justices, ruled that exemptions in the wage-hour law were entitled a "fair reading."  Four justices dissented. 

This case is of great interest for two reasons.  First, it suggests that in the future, courts are likely to give broader interpretations to exemptions to the wage-hour rules.  Second, it shows the importance of newly-appointed Justice Gorsuch, who joined in the 5-4 majority ruling. 

In a related development, the federal government budget law signed March 23, 2018, includes a rider amending the wage-hour laws pertaining to tip-pooling arrangements.   A regulation had been proposed that allowed restaurants to require employees who directly earn tips to share them with workers who don’t.  The budget bill would prohibit employers, including managers and supervisors, from participating in the tip-pooling arrangements.  Questions still remain as to how this prohibition will apply to lead persons.  The original Obama-era rule asserted that tips are the property of employees who earn them, and the rider rescinds this rule and moots a December 2017 proposed rule that would have allowed broader tip pooling. 

EMPLOYER CAN PURSUE FRAUD CLAIM AGAINST UNDOCUMENTED WORKER

Undocumented workers generally have the right to bring lawsuits under the wage-hour and discrimination laws.  While their right to reinstatement and future pay may be limited because of the immigration laws, they generally are considered to have remedies nevertheless under these laws.  At the same time, when employers are sued, they in theory have the right to bring counter-suits or counter-claims.  One employer recently brought such a counter-claim of fraud based on the Plaintiff’s presentation of fake documents to gain employment.  Oxlaj v. Darby Road Pub. House & Rest., 2018 BL 86995, D.N.J., No. 2:16-cv-01180, 3/14/18.  

The court allowed a counter-claim to be made in this situation, in which the employer is seeking a return of monies the plaintiff received while working there.  It should be noted, however, that the case is in a preliminary stage, and this result is not a final ruling.

The concept of the case is extremely interesting because there are many other circumstances in which employers are plagued with "fake" applicants.  The applicant may be a union organizer, a reporter, a safety or animal rights activist, or various other types of persons seeking to gain employment for reasons unrelated to wanting the job.  The question is whether more employers will counter-sue for fraud or related claims in these circumstances. 

A great deal of caution is necessary because the retaliation laws may come into play.  That is, it is possible for a court to rule that a counter-suit is really retaliatory based on the bringing of the complaint against the employer.  On the other hand, the counter-suing employer may argue that certain counter-claims are mandatory or the employer is waiving its legal right to sue.  Obviously, these are complicated issues. 

TRUMP ISSUES EXECUTIVE ORDER TO IMPROVE ECONOMY BY GETTING PERSONS OFF WELFARE AND INTO EMPLOYMENT

The percentage of working-age Americans actually working has significantly dropped over the last 10 years.  At the same time, unemployment rates are dropping to a modern low, approximately 4%, and are expected to drop to around 3.5% over the next year.  America needs workers, and workers need jobs to improve their income and self-image. 

About 80% of federal government agricultural expenses go for food stamps, and in 2017 the federal government alone spent more than $700 billion on low-income assistance.  In comparison, federal spending was only about $545 billion for defense and $725 billion for Social Security.  Almost 110 million Americans received some sort of low-income welfare in 2011.  In contrast, during that same time period, there were only about 106 million Americans working full-time. 

The last major effort at welfare reform was enacted in 1996, and promoted by President Bill Clinton.  More recent favorable results are shown by the experience in Kansas.  A foundation reported that Kansas tracked 6,000 families who moved off welfare and went to work in 600 different industries, and incomes on average more than doubled over a year.

Some oppose welfare reform because they say any recipients already work or such reforms would hurt low-income individuals.  Others say those who stopped receiving welfare benefits because of a work requirement either have refused to work or train for work or no longer need assistance, the latter being a real success story.

Welfare programs can include a combination of food stamps, housing support, child care, Medicaid and other benefits.  Currently, the food stamp program has work requirements for most able-bodied people aged 18-49, but there are many exemptions and waivers operable in various states.  Under Congressional proposals in the farm bill, able-bodied adults between and 18 and retirement, without young children, would have to work to be eligible for food stamps or in the alternative would be required to take a minimum of 20 hours a week of new job training classes.  Some half-dozen states have already instituted work requirements for the receipt of Medicaid benefits.

More recently, on April 10, 2018, President Trump signed an executive order with the theme of "reducing poverty in America by promoting opportunity and economic mobility."  Among other things, the federal government would enforce welfare work requirements that are already required by law.  States and localities would be given flexibility to create, revise and evaluate innovative programs to get people off welfare and into employment, and the relevant agencies would establish metrics that measure outcomes so that the agencies administering welfare programs can be held accountable.  There would be a clearing house so that the agencies could evaluate successes of such reforms as well as failures, and certain information would be available to the states and localities that can benefit and adopt best practices.  Agencies would be required to view their programs not currently requiring work for receipt of benefits or services to determine whether enforcement of a work requirement would be appropriate.  Initial steps are supposed to be taken by the agencies within 90 days of the executive order.


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