Cannabis in the Construction Industry: What You Need to Know to Mitigate the Risk

In a recent study done by the National Drug-Free Workplace Alliance, it was reported that over the past year, 11.6% of construction industry workers admit to using illicit drugs, and 14.3% admit to experiencing a substance abuse disorder. With the continual passage of recreational and medical cannabis laws, that percentage will continue to increase. The construction industry is already plagued with hazardous workplaces; any impairment from the use of marijuana can cause more considerable safety risks. Educating yourself about the dangers and instituting some best practices into your business is essential to avoid future claims.

Statistics

According to a study reported by the National Institute on Drug Abuse, employees who tested positive for marijuana had 55% more industrial accidents, 85% more injuries, and 75% greater absenteeism compared to those who tested negative.
In 2020, pre-employment marijuana positivity was 3.7% and post-accident 6.4% (a 73% increase in positivity percentage).
Insurance Institute for Highway Safety showed injury and fatal crash rates increased by 6% and 4%, as well as an increase in collision claims.

Costs

When an employee is injured in a work-related accident, the indirect cost outweighs the direct costs of the actual claim. If an employer is a Drug-Free Workplace (DFWP), they are entitled to a 5% discount on their premiums if they are in compliance with the DFWP statute.
Workers’ Compensation (WC) carriers can deny compensability of WC claims due to positive post-accident drug screens based on the presumption defense.
- If an employer is a drug-free workplace, this presumption may be rebutted only by evidence that there is no reasonable hypothesis that the intoxication or drug influence contributed to the injury.

Creating a Safe Workplace

Talk with your insurance advisor to stay up-to-date on state and federal law changes as it relates to marijuana and how it can impact your DFWP.
Review your drug and alcohol policy to ensure the policy outlines testing policies, timelines for contesting results & obtaining results, and EAP (employee assistance program).
- A drug testing policy can help employers reduce accidents and injuries while encouraging safety.
Build a safety-focused, trusting culture for employees to report cannabis use in the workplace.
- Teach supervisors how to recognize and respond to impairment in the workplace.
Reasonable suspicion testing
- Provide access to employee assistance programs and health care benefits for employees with substance use disorders.

We do anticipate things to change in the near future. BKS is here to help keep you as our client on the vanguard with this ever-changing matter

Diclaimer

This material has been prepared for informational purposes only and was generated from information provided to BKS from the client and/or third-party sources. Therefore, BKS makes no warranty or representation(s) as to the accuracy or appropriateness of the data and/or the analysis herein. This information is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your tax, legal and accounting advisors for those services.