Several States Raise Minimum Wage, Relax Marijuana Laws

Several States Raise Minimum Wage, Relax Marijuana Laws

The upset victory of Donald Trump in the presidential race was the biggest change to come out of Tuesday’s elections in the US, but it was not the only decision made at the polls with major consequences for business and HR. Voters in several states participated in referenda or ballot initiatives whose outcomes will affect hiring, compensation, and other HR policies.

Marijuana Legalization Moves Ahead

California, Massachusetts, and Nevada all passed ballot measures legalizing recreational marijuana use. Arizona voters rejected a legalization initiative while another, in Maine, is too close to call, so the state is looking at absentee ballots (Update: Maine’s ballot initiative ultimately passed by a narrow margin and went into effect January 30). Measures to legalize the use of medical marijuana succeeded in Arkansas, Florida, and North Dakota, while Montana liberalized its existing law on medical marijuana. After Tuesday’s votes, 28 states plus Washington, DC have legalized marijuana use for some purpose, either medical or recreational.

This national tide may have an impact on employers’ drug policies. In short, because marijuana remains illegal at the federal level, employers are still on fairly solid legal ground to maintain zero-tolerance policies, but these policies need to be communicated clearly and we may see more litigation over medical marijuana-related disability claims. Employment lawyers tell SHRM’s Lisa Nagele-Piazza that employers in states where medical use has been legalized may want to specifically address it in their drug policies:

Particularly if they are card holders for medical marijuana, employees may think that because it is legal, they are protected, [Danielle Urban, an attorney with Fisher Phillips,] noted. However, only a few states actually provide employment protections for card carriers. Employers should also note that some states, like California, have very restrictive drug-testing rules, [Oagletree Deakins attorney Austin] Smith said. Therefore, if employers want to test employees more often, they need to know what limits their state puts on drug testing.

So Do Minimum Wages

Arizona, Colorado, and Maine all passed referenda raising the minimum wage to $12 an hour by 2020, and Washington state voted to raise its pay floor to $13.50 an hour by the same year. A South Dakota referendum that would have lowered the minimum wage for employees under 18 from $8.55 to $7.50 failed decisively. Bloomberg’s Jordan Yadoo explains the economic debate that motivated South Dakota to vote on the question:

Supporters argued that a lower, so-called training wage for minors would help employers preserve entry-level opportunities for teens, who they say suffer disproportionately amid rising labor costs due to their lack of experience. A sub-minimum wage would help give them a fair shot, according to Michael Saltsman, research director at the business-backed Employment Policies Institute. …

Opponents of the measure said workers performing the same job deserve the same amount of pay. “On what grounds should we create a loophole that treats one class of workers differently than another?” said Reynold Nesiba, an economics professor at Augustana University in Sioux Falls, South Dakota, who also won a state senate seat in Tuesday’s election. He says there’s insufficient evidence to suggest a link between minimum wage increases and teen unemployment.

Adam Chandler at the Atlantic observes that these referenda are part of a growing national trend:

And so, as political leadership has been passed back and forth between parties over the years, minimum-wage hikes have become a reliably popular policy. “During the past 20 years they’ve appeared on state ballots 20 times and failed only twice—in Missouri and Montana, both in 1996, a mere three months after Congress voted to boost the hourly minimum from $4.25 to $5.15,” Politico noted in its morning newsletter about labor. It added that, in addition to a handful of cities, four red states also raised their minimum wage in 2014.

In addition to these hikes, Arizona, which broke easily for Donald Trump, and Washington, which voted overwhelmingly for Hillary Clinton, also passed mandated sick-leave measures, a boon for the nearly 45 percent of the American workforce without such paid protections.

Right-to-Work Amendments Win and Lose

Alabama passed Amendment 8 enshrining its “right to work” law, which prohibits employers from denying jobs to candidates based on whether or not they belong to a union, into the state constitution, but a similar amendment initiative failed in Virginia. In neither state does the law change; these amendment initiatives are instead meant to make it much more difficult for future state governments to repeal “right to work” legislation.

Colorado Says “No” to ColoradoCare

A referendum to establish a single-payer health insurance system in Colorado failed, garnering only 20 percent support. Under the proposed amendment to the Colorado constitution, the state would have raised payroll and income taxes by $25 billion in the first year to fund a system called ColoradoCare, which would have aimed to provide comprehensive health insurance to all state residents with no deductibles and no co-payments for preventive and primary care services.

The amendment failed in large part because small business owners considered the costs of implementing it too much to bear, but while this attempt to upend the existing health insurance economy did not succeed, industry experts expect to see more initiatives like this in the future, Elizabeth Galentine explains at Employee Benefit News:

“We don’t get involved in state issues, but we don’t consider this a state issue. We very much consider this a national issue,” says Joel Kopperud, vice president of government affairs at the Council of Insurance Agents & Brokers, which opposed the amendment, dubbed ColoradoCare.

“If you look at what’s happened with marijuana, Colorado seems to be a leader in a lot of social experiments. … Marijuana is on the ballot in five states in November and that’s because of Colorado’s experience,” he added. “The [marijuana] industry is blowing up. It’s a wave and it’s taking over and there’s a lot of anxiety in the [healthcare] industry that that could happen with single payer.”

Indeed, when Sen. Bernie Sanders (I-Vt.) spoke at a Boulder, Colo., rally in support of Amendment 69 in October, he emphasized the potential national implications of the amendment passing. “Colorado can send a shot that will be heard all over this country and all over the world,” he said at the time. “Because if you can pass ColoradoCare, then I guarantee you states all over this country will be following in your footsteps.”