Two new laws will take effect next year that restrict how employers may respond to worker off-duty cannabis use.  One law will restrict employers’ ability to ask about prior cannabis use in the hiring process, and the other will limit employer actions based on positive marijuana drug tests. Recall that last year, Governor Newsom signed AB 2188, which prohibits adverse action based on an individual’s use of cannabis off the job and away from the workplace, and also prohibits adverse action based on a drug test that identifies only non-psychoactive cannabis metabolites in the applicant’s hair, blood, urine, or other bodily fluids.  The legislature gave a one-year ramp up before this law took effect, so this new prohibition will take effect on January 1, 2024.

Meanwhile, this legislative session, the governor signed SB 700, which amends the Fair Employment and Housing Act (FEHA) (California Government Code § 12954), to close what some saw as a loophole in AB 2188. As a result, on January 1, 2024, it will now also be unlawful for an employer to request information from a job applicant relating to the applicant’s prior use of cannabis, including in the applicant’s criminal history, absent an applicable exception. As these prohibitions are incorporated into the FEHA, they come with all of the usual remedies associated with prohibited employment discrimination, including attorney’s fees.  In California, according to the bill’s sponsor, it is already illegal for employers to discriminate against job applicants based on their prior use of alcohol and other legal drugs. SB 700 extends this protection to the use of cannabis, which became lawful as a matter of state law in 2016.

The impact of SB 700 on criminal background checks is not entirely clear. Read in favor of applicants and employees, SB 700 seemingly prohibits employers from relying on prior convictions for simple possession of cannabis. In that sense, it seemingly obviates existing law, California Labor Code section 432.8, which prohibits employers from inquiring into or considering such convictions after they are more than two years old. Because SB 700 refers to an individual’s prior “use” of cannabis, SB 700 does not appear to afford any protection to workers with prior criminal convictions involving, for example, the manufacture, distribution, or sale of cannabis. (Note the San Francisco Fair Chance Act prohibits covered employers from considering a conviction for “decriminalized conduct,” including the non-commercial use and cultivation of cannabis.)

Exemptions. These two laws exempt employers in the building and construction industry, as well as employers with applicants and employees in positions that require a federal background investigation or clearance. The law also does not preempt state or federal laws applicable to companies receiving federal funding or federal licensing-related benefits, or that have federal contracts.

Information about a person’s prior cannabis use obtained from their criminal history also could be used if the employer is permitted to consider or inquire about that information under a specified provision of the FEHA or another state or federal law.

Review and Revise Your Policies. Employers should prepare for these prohibitions by reviewing and revising their anti-discrimination policies and their drug use policies and procedures. Covered employers that wish to conduct marijuana tests should also ensure that their marijuana testing programs measure only psychoactive marijuana components. Employers should assess any pertinent updates to their policies and procedures concerning criminal background checks.