The Grand Bargain: 2023 Legislature’s impact on workers’ comp

As the dust settles from the Minnesota Legislature’s 2023 session, the passage of a bill amending Minnesota’s Workers’ Compensation Act, Chapter 176, has the clearest impact on how the state oversees the handling of employees injured on the job.

The bill, proposed by the Workers’ Compensation Advisory Council (WCAC), included a substantial increase to the permanent partial disability (PPD) benefits compensation schedule effective Oct. 1, 2023, and limitations on fees charged for retrieval of electronic medical records requested as part of a workers’ compensation claim, just to name two of the more significant changes.

While that amendment had the most obvious consequences for Minnesota’s workers’ compensation system, any law impacting the workplace has the potential to impact workers’ compensation. Even though workers’ compensation is ultimately a benefit delivery system for workers injured on the job, it is also an important framework to incent improved workplace safety practices and successfully return employees to productive work after an occupational injury disrupts employment.

Legalization of marijuana

One of those laws certain to affect the workplace is the legalizing of marijuana. Since Aug. 1, 2023, adults age 21 and older may possess and use certain amounts of cannabis. The law outlines various limitations on use, including use while operating a motor vehicle. Both use and possession are prohibited at a variety of locations such as public schools or charter schools and school buses, and anywhere smoking commercial tobacco is prohibited.

Employers need to tread carefully when an employee is disciplined or terminated due to use or possession of marijuana when not at work, as cannabis is lawful now under Minnesota’s Consumable Products Act. An employee may not be disciplined or terminated for use of cannabis unless the employee possessed, used or was impaired by cannabis while working on the employer’s premises or while operating the employer’s equipment. Because recreational marijuana remains illegal at the federal level, though, employers can still prohibit use, possession, and impairment from marijuana products if failing to do so would violate federal or state laws or regulations, or cause the employer to lose federal funding or licensing-related benefits.

Employers may create written policies addressing use of cannabis, if work rules regarding cannabis use and testing are consistent with Minnesota’s Drug and Alcohol Testing in the Workplace Act (DATWA). Multistate employers need to stay current on the drug testing laws of each jurisdiction in which they operate. In Minnesota, drug testing for cannabis (including pre-employment), or random testing to include cannabis, may be done only for limited circumstances and positions, including certain safety-sensitive positions.

Intoxication defense

From a workers’ compensation perspective, the new law does not substantively change the analysis for determining whether an injured employee’s intoxication allows for a defense to a claim. Now that recreational marijuana is legal in Minnesota, it is effectively no different at the state level than any other legal intoxicating substance, such as alcohol, and therefore is subject to the Minnesota Workers’ Compensation Act’s intoxication defense statute. If an employee is believed to have been intoxicated at the time of a work injury, Minnesota Statutes Section 176.021, Subdivision 1, allows an employer to raise an employee’s intoxication as a bar to a claim for workers’ compensation benefits if it can be shown that:

1) The employee was intoxicated at the time of his or her injury, and

2) That the intoxication was the proximate cause of the employee’s injuries.

The employer has the burden of proving these elements, and satisfying this burden starts with a proper understanding of the laws regarding substance use, testing, and defenses in Minnesota.

If an employer suspects that an employee is impaired at the time of the work injury, they should inform their workers’ compensation insurer immediately so a proper investigation can take place. One difference from other intoxicating substances, however, may be how marijuana metabolizes and how that impacts testing results, potentially making it more difficult to measure intoxication and/or impairment compared to other legal substances. Even for those employers with a formal drug testing program, it may be difficult to tell when and where the marijuana use took place, complicating a determination whether impairment from marijuana was present at the time of the injury.

Impairment is impairment, and to some extent the source of the impairing substance, if it is a factor, does not matter. What matters is the employee has created a riskier work environment that increases the potential for injury to themselves or their co-workers. Whether the impairment is due to lack of sleep, or alcohol, or cannabis, employers should focus on creating a culture of safety, consistently enforcesafety rules, and properly address unsafe behaviors which do not require establishing levels of impairment or causation of the safety violation.

Time to refresh the safety program

The variation and inconsistency in laws regarding medical and recreational marijuana use in the workplace make it particularly difficult for employers operating in multiple states to establish company-wide policies and practices. The changing legal status of marijuana in the U.S. provides a great opportunity to refresh an employer’s safety program and workplace policies.

These four actions are a good starting point, and may require counsel’s guidance for best understanding and proper implementation:

• Understand the law: Understand how federal and state laws affect the business operation, especially if states in which the business operates are inconsistent with their legal treatment of marijuana.
• Revisit job descriptions: Regularly revisit job descriptions to ensure they reflect current equipment, any new technologies, and the scope of the jobs that may intersect with a position. Make changes, if needed, to reflect the reality of the workplace to increase the likelihood of hiring the best candidate for the job and then assist in providing the training they need to perform the job safely.
• Be fair and consistent with all employees: For example, if a business declares operating a forklift in a certain area of the company or in a certain manner is in violation of workplace policies, that standard needs to be consistently applied to employees, taking into consideration legal limitations on any blanket policy.
• Document violations: As impairment comes into question, the most important thing to come back to is the safety of the workplace. If someone is practicing unsafe behavior, regardless of any drug use, an employer should promptly address it. No matter the cause of or legality of the substance causing the impairment, employers can address safety concerns, and it’s important that they do so. Depending on the involvement of an impairing substance or the presence (or not) of a drug testing program, an employer may need to address the behavior separately from the substance that may be contributing to it.

The growing acceptance of marijuana use in the U.S. has forced lawmakers and employers to address its use and adapt. Legal counsel has an important role to play assisting employers in implementing workplace policies that may impact marijuana users due to the quickly changing legal landscape.

Thanks to Aaron Schmidt, Senior Defense Counsel with Lynn, Scharfenberg and Hollick, SFM staff counsel, for his contributions to this article.

Kathy Bray is Senior Vice President and Chief Legal Officer at SFM Mutual Insurance Company, bringing over 30 years of legal experience to the table, largely focused in the areas of employment and workers’ compensation law and litigation.