Executive Summary: On February 15, 2019, New Jersey’s governor and leaders of the State senate and assembly reached an agreement for legalizing, regulating, and taxing marijuana for adult recreational use. The proposed legislation remains largely unchanged from Senate Bill 2703, introduced on June 7, 2018.

What to Expect: Assuming S.B. 2703 is signed into law, employers with operations in New Jersey must brace for changes. On the positive side, the proposed law allows zero tolerance policies to remain in place. Specifically:

  • No employer must permit or accommodate the use, consumption, or possession, of marijuana in the workplace; and
  • No employer need alter policies prohibiting marijuana use or intoxication by employees during work hours.

There are, however, potential landmines when employers face employees lawfully using marijuana. First, the proposed law prohibits New Jersey employers from: refusing to hire any person; employing any person; or discharging or otherwise penalizing any employee “because” that person uses marijuana—unless the employer has “a rational basis for doing so which is reasonably related to the employment, including the responsibilities of the employee or prospective employee.”

Second, the proposed law states a failed drug test by an employee who lawfully uses marijuana shall not form the basis for refusal to employ or otherwise penalize that person—unless failing to do so would put the employer in violation of federal law or “cause it to lose a federal contract or funding.”

As we have done throughout the process, we will continue to monitor the bill and all associated developments.