Medical marijuana UI decision in Michigan stands

The Michigan appellate court decision (previously noted here) holding that the use of medical marijuana does not qualify as misconduct in Michigan will not be reviewed by the Michigan Supreme Court. Rick McHugh of NELP has the details:

In October 2014, the Michigan Court of Appeals held that denying UI benefits to claimants who were registered medical marijuana users and who were fired when they tested positive for marijuana was a prohibited penalty under Michigan’s Medical Marijuana Act. Under the facts of this case, there was no allegation that any of the claimants were in possession of, intoxicated, or under the influence of marijuana while at work. All testified that they had used marijuana away from work pursuant to their medical marijuana cards. Despite this, the administrative appellate body, the Michigan Appellate Commission, had imposed misconduct disqualifications upon the claimants. Three separate trial courts then reversed and the cases were consolidated in the state court of appeals.

The favorable reported ruling is found in Braska v. Challenge Manufacturing, 861 N.W.2d 289 (2014). While the agency’s petition for appeal was pending, Mr. Braska passed away, so the Supreme Court order denying review last week was issued under the caption Janine Kemp v. Hayes Green Beach Memorial Hospital, one of the two remaining cases.

Here is a news article that gives further background about the case.

NELP had filed an amicus brief with the Michigan ACLU and Michigan UI Program in the Court of Appeals. The favorable holding is based upon explicit language contained in the Michigan Medical Marijuana Act — which was passed as a result of a voter referendum. And the act was very skillfully drafted.

Drug testing for Temporary Assistance for Needy Families (TANF) recipients

UPDATE (9 Nov. 2015): The new drug testing regulations actually only apply to Temporary Assistance for Needy Families (TANF) programs. Food stamp recipients may be covered at some later date if Wisconsin wins a law suit against the federal government to allow drug testing in food stamp programs.

Emergency regulations that were only recently proposed on October 19th have this week been quickly approved by the governor (the comment period closed this week on Monday, November 2nd) and will take effect this upcoming Monday, November 9th.

While this drug testing has nothing to do with unemployment benefits (unemployment testing cannot even be considered for implementation until federal authorities issue final regulations and then state regulations for the testing pass federal review), this testing of food stamp Temporary Assistance for Needy Families (TANF) recipients includes some wrinkles — or rather a lack of specificity — that everyone should take note of.

In particular, the criteria and the nature of the drug testing that will be used is essentially “to be determined.”

NATURE OF TESTING REQUIRED. Testing shall consist of laboratory analysis of a specimen collected from an individual. The department shall provide to each administering agency a list of all controlled substances or metabolites of controlled substances that must be included in the test and cutoff levels for the test and any confirmation test that may be used. The department may add or delete controlled substances or metabolites that must be included in the laboratory test to reflect changes in pre-employment drug testing practices of Wisconsin employers. Any positive test shall be confirmed through a confirmation test from the original specimen collected from the individual. Methods of analysis for the confirmation test may include quantification by gas chromatograph-mass spectrometer, liquid chromatography-mass spectrometry, tandem mass-spectrometry, or another analytical method approved by a medical review officer for the drug testing vendor.

ADM DCF 105.05(2) [pp.8-9 of the emergency regulation].

What information about the drug testing standards at issue here indicate that open-ended criteria will be used to determine both what kinds of tests will be used as well as the criteria at issue in those tests. Rather than the urine testing that is standard in most workplace drug testing, the Department of Children and Families could well order up saliva, sweat, blood, or even hair testing (see, for instance Brandt v. Scot Forge Co., UI Hearing No. 09006150MD (18 July 2013) for a discussion of some of the problems with hair testing). At present, the federal agency responsible for drug testing has still only approved of urine or blood tests as legitimate tests for use of illegal drugs. In addition, this new regulation allows the Department of Children and Families to set cutoff levels for revealing drug use that may differ or even conflict with federal requirements for establishing a positive test result. It is the “drug testing practices of Wisconsin employers” rather than established scientific standards that will govern what cutoff levels will be used for a positive test result.

Finally, these regulations are completely silent about inspection and certification requirements for the drug testing laboratories themselves. The federal standards for drug testing and certification are thorough and fair. Other standards for drug testing laboratories, however, can leave out quite a bit. And so, any lab that is not federally certified might not have much validity at all to its tests. But, without a thorough understanding of the science and laboratory techniques at issue with that test and the lab conducting the test, a challenge about a fake-positive will be difficult if not impossible to mount.

This Narcotics Anonymous group brought to you by DWD

Yesterday, the Joint Finance Committee approved of drug testing the unemployed in the proposed budget.

The final testing requirements are similar to AB192 minus the requirement to survey employers about their drug testing. Accordingly, the estimate by the Legislative Finance Bureau to a great extent applies to this similar testing requirement. I went through AB192 costs here. In short, initial costs for setting up the drug testing will be just over $1.6 million, and the annual costs for the drug testing will, it is estimated, be $1.06 million.

The drug testing in the budget bill was previously described here. For the Joint Finance Committee, the Fiscal Bureau added additional analysis for the drug testing that is now in the budget bill. This memo revises the annual cost estimates from AB192 — now only $973,200 — and notes numerous “issues” with this testing. For instance, other drug testing programs have only found extremely low numbers of positive test results, this testing could easily be more expensive than estimated, the testing requirement could — if the full scope of the requirement is allowed by federal authorities and applied by DWD — cover up to 85% of all claimants in Wisconsin, almost 5% of Wisconsin’s workers would most likely be immediately covered by this drug testing requirement, and estimated treatment costs of $2,700 per claimant are really nothing more than guesswork and that actual costs for treatment are unknown.

The ability of employers to volunteer test results of job applicants raises a host of additional problems as well, from whether employers will need to change their testing procedures to DWD-approved testing, potential violations of employee privacy, and creating a host of complications regarding departmental record-keeping requirements. Indeed, the Finance Bureau specifically notes that the Advisory Council previously asked the legislature to repeal a similar testing provision that was passed by the legislature in 2011. And, the legislature did so. None of the issues with that legislation have been addressed in this current drug testing requirement.

So, there are many reasons to think this drug testing requirement is not ready for prime time. But, all of these problems are not what is most remarkable about this legislation. What is most strange here is who is advocating for this testing and what supporters and critics are saying.

As the title for this post indicates, this testing requirement is essentially making the Department of Workforce Development into a sponsor and supporter of drug treatment programs for hundreds of Wisconsin workers. Prior to my arrival in Wisconsin, for some time I lived in Massachusetts, the home state of that lion of the senate, that bastion of liberalism, Ted Kennedy. Senator Kennedy certainly changed his positions on issues over time, but the Kennedy of the 1970s was the symbol of big government programs intended to cure societal ills. In 2015 — forty years later — you would think that the Republicans of today would be as far apart from 1970s big government liberalism as possible, especially when many push President Reagan’s rebuke of that liberalism as a little bit of political heaven on earth.

Yet, during the debate over this drug testing the Democratic members of the Joint Finance Committee were the ones pointing out the wasteful, big government spending at issue with this drug testing. The estimates were low-balled, these Democrats exclaimed, the testing and treatment will accomplish nothing, and government bureaucracy will only make finding work that much harder. WisPolitics budget blog smartly featured the Republicans’ response to these criticisms. Rep. Dale Kooyenga, R-Brookfield, explained: “There’s a tremendous opportunity through good public policy to make a community better.” In 1975, Ted Kennedy could not have said it better, and that is what makes this drug testing one of the strangest pieces of legislation I have ever seen.

Costs of Drug Testing

The drug testing provisions in the proposed budget have also been put into separate legislation — AB192 — and the Legislative Finance Bureau has prepared estimates for how much this testing would cost. While the Finance Bureau cautions that these numbers are not applicable to the proposed drug testing in the budget bill (see this post for details about that drug testing), everything I have heard and read indicates that the drug testing proposed in AB192 is very similar to what is proposed in the budget bill.

To start, here are the numbers for setting up this drug testing:

  • Programming costs of just over $1.2 million.
  • Training, program management, testing, communications, and database development costs of around $360,000.
  • Vendor costs of $18,000.
  • Policy and rule promulgation costs of $38,000.

So, the total costs to set up this drug testing are just over $1.6 million.

[AB192 also includes a requirement to survey employers about their drug testing requirements. The costs for setting up this survey would be more than $1.2 million. Subsequent surveys every ten years will cost $865,000.]

Obviously, there are also annual costs for this drug testing.

  • DWD estimates that 85% of claimants will have to be screened to determine if drug testing is appropriate for them. That screening will cost $2 per claimant or $321,000 annually.
  • DWD estimates that 2.5% — about 4,000 claimants — will end up being required to undergo drug testing. DWD believes around 300 will refuse these tests, and that tests for the rest — at $40 per test — will cost around $149,000 each year.
  • DWD believes 318 of those tested will test positive — around 8.5% of those tested (a high positive test rate that is unlikely to occur when compared to prior testing). DWD also posits that only half of those testing positive will opt for treatment (an extremely low estimate, especially when treatment will be the only way for unemployment benefits to continue and these benefits are usually vital to paying rent and getting groceries). Treatment costs of $2700 per claimant, then, will only amount to just under $430,000 annually.
  • Staffing costs of .75 FTE or nearly $69,000 annually will be needed for managing all of this testing, and printing and mailing associated with this testing will cost $5,000.
  • Not yet known will be the costs for litigating disputes over test results or how much will be spent on test results that employers voluntarily submit to DWD.

With these numbers taken as is, drug testing will cost each year around $1.06 million.

Understandably, there are savings from this drug testing because claimants who test positive and do not seek treatment will not collect any unemployment benefits. Here, the Department of Workforce Development’s over-estimating the number of positive test results and under-estimating the number of folks who will seek treatment leads to significant savings. Nearly 460 claimants each year are expected to lose their eligibility for unemployment benefits, according to the Department’s estimates (NOTE: this number consists of of the 300 who refuse drug tests plus the 159 who test positive this number of claimants testing positive and refusing treatment is wrong, since only 318 are believed to test positive and only half of this number will presumably refuse treatment, leaving only 159 — not 459 as reported). Assuming an average benefit amount of $3,950, just over $1.8 million will then NOT be paid out to 459 claimants.

The Finance Bureau does not simply accept this number as the total savings, however. Employers’ unemployment taxes will be reduced somewhat for two reasons: (1) claimants who test positive and refuse treatment will not be paid any benefits that can be charged to employers’ accounts, and (2) claimants who test positive but seek out treatment will have their benefits paid out of the general balancing account rather than charged against their employers. In both cases, employers will be paying less in unemployment taxes (and even though benefits continue to be paid in the second scenario). Because the charges to employers’ accounts are being reduced, there will be a general reduction in employer’s unemployment taxes. So, according to the Finance Bureau, employers will see a general $194,000 reduction in their unemployment taxes. In addition, approximately $600,000 of benefits will be charged to the balancing account for those claimants seeking out treatment. As a result, the annual savings are down from $1.8 million to just over $1.02 million each year of this program.

In short, even with the Department’s generous estimates about how many will test positive and how few will actually seek treatment, this drug testing will still cost Wisconsin taxpayers around $30,000 each year. Keep in mind as well that, even though employers’ unemployment taxes are being reduced by $194,000 for the 300 refusing tests and the 159 testing positive, around $600,000 in benefits being paid each year to those testing positive and seeking treatment will be paid out of the balancing account.  As a result, the balancing account — which all employer pay a portion of their taxes into — is likely to have a negative balance that much sooner. Take out the generous estimates about how many will test positive and how many will refuse treatment, then the costs escalate further.

UPDATED 13 May 2015 (struck out reference to wrong number and added explanation for how that number is calculated; updated discussion at end of posts about costs of drug testing).

Gov. Walker’s proposed UI drug testing

Finally, there are details about the drug testing Governor Walker has been talking about for several months now.

The proposed testing includes three initiatives set forth in a newly created Wis. Stat. § 108.133 (see section 3155 of AB21):

  1. Allowing employers who conduct preemployment drug screenings to report failed tests to the Department.
  2. Requiring drug tests for claimants “for whom suitable work is only available in certain occupations that are federally approved for benefits eligibility testing.”
  3. Requiring drug testing for claimants “for whom suitable work is only available in an occupation that regularly conducts drug testing, as determined by the Department.”

Employer drug test reporting

This employer reporting of failed drug tests was in the 2011 budget. After complaints from the Advisory Council about being bypassed and problems noted by the Department about this employer reporting raising questions over employee privacy and administrative costs, this drug testing reporting was repealed by 2011 Wis. Act 198 before it was ever implemented.

This current proposal is an obvious effort to revive this employer reporting of drug tests. Job applicants here who have test results reported or who refuse a drug test are treated as someone who has refused an offer of suitable work pursuant to Wis. Stat. § 108.04(8). This disqualification means that the person cannot collect benefits until he or she has earned 6x his or her weekly benefit rate.

Proposed Wis. Stat. § 108.133(4)(a) sets forth this reporting option and sub-section (b) states: “The department shall promulgate rules necessary to implement par. (a).” Because not all drug tests are equivalent in accuracy, scope, and process, even rules for confidential handling of drug test results or refusals to take tests only scratch the surface of what kind of rules are needed here. Documentation about the kind of tests being done, the chain of custody for the samples, and options for retests of samples, for instance, will be needed with each test report.

Furthermore, because these test results can come from any employer rather than just a prior employer of an employee (as when an employer discharges an employee for a failed drug test), employers simply screening applicants will be dragged into unemployment hearings for their job applicants who want to contest their disqualification. Most employers do not feel a great need to get involved in such situations.

One final note here about job applicants refusing a drug test. Under this proposal, a job applicant who refuses a drug test is treated the same as an applicant who fails a test. On more than a few occasions, applicants refuse a drug test not because he or she fears a positive test result but because they are no longer interested in the job. For them, a no-show for the test is a better way of turning down the offer rather than telling the employer in person that they do not want the job. Certainly, someone currently collecting unemployment benefits does not have this option, as they must accept all reasonable/bona fide job offers. But, someone who is not collecting unemployment benefits will, under this proposal have to take the test and then turn down the job they are no longer interested in. If they decline the drug test, they risk having their unemployment benefits suspended in the future because of this past refusal to take a test (and, even though this reporting prohibition will only apply to current claimants, there is nothing yet to indicate when an employer report of a drug test will matter or be declared stale for this rule). As a result, employers will be paying for additional tests because applicants will feel pressured to take the tests regardless of actual interest in the work at stake.

Testing in federally approved drug testing occupations

The April 2014 minutes of the Advisory Council described how federal law allows for this drug testing:

Drug Screening
The Middle Class Tax Relief Act of 2012 granted states the option to pass laws to enable their UI agencies to require drug testing on UI claimants. In order to be able to require drug testing, a claimant must have been terminated from their most recent employer due to the use of controlled substances, or if the claimant’s only suitable work involves employment that regularly performs drug testing. DOL is currently promulgating rules that will identify specific industries that regularly require drug testing. Wisconsin law does not currently require drug testing of UI claimants.

This part of the proposal seeks to implement this federal law by requiring those in fields where drug testing occurs because of federal drug testing requirements (e.g., commercial drivers or those in heavy manufacturing) to pass an additional drug test when applying for unemployment benefits.

I am unaware of the status of the federal regulations needed to implement this provision. Even with those regulations in place, the Department will need to undertake the following:

(2) DRUG TESTING PROGRAM. The department shall establish a program to test claimants who apply for regular benefits under this chapter for the presence of controlled substances in accordance with this section and shall, under the program, do all of the following:

(a) Promulgate rules to establish the program. The department shall do all of the following in the rules promulgated under this paragraph:
1. Establish a process to test claimants for the presence of controlled substances. In establishing the process, the department shall adhere to any applicable federal requirements regarding drug testing.
2. Identify the parameters for a substance abuse treatment program for claimants who misuse controlled substances and specify criteria that a claimant must satisfy in order to be considered in full compliance with requirements of the substance abuse treatment program.
3. Create a screening process for determining whether a claimant should be required to submit to a test for the presence of controlled substances.
4. Identify the parameters for a job skills assessment for claimants who misuse controlled substances and specify criteria that a claimant must satisfy in order to be considered in full compliance with the requirements of the job skills assessment.

(am) Promulgate rules identifying occupations for which drug testing is regularly conducted in this state.

(b) When a claimant applies for regular benefits under this chapter, do all of the following:
1. Determine whether the claimant is an individual for whom suitable work is only available in an occupation that regularly conducts drug testing.
2. Determine whether the claimant is an individual for whom suitable work is only available in an occupation identified in the rules promulgated under par. (am).
3. If the claimant is determined by the department under subd. 1. to be an individual for whom suitable work is only available in an occupation that regularly conducts drug testing, conduct a screening on the claimant.
4. If the claimant is determined by the department under subd. 2. to be an individual for whom suitable work is only available in an occupation identified in the rules promulgated under par. (am), conduct a screening on the claimant if a screening is not already required under subd. 3.
5. If a screening conducted as required under subd. 3. or 4. indicates that the claimant should be required to submit to a test for the presence of controlled substances, require that the claimant submit to such a test.

(c) Create and provide a substance abuse treatment program in accordance with the rules promulgated under par. (a)2.

(d) Create and conduct job skills assessments in accordance with the rules promulgated under par. (a)4.

See proposed Wis. Stat. § 108.133(2).  As is obvious, a lot of work is needed to implement this testing requirement. Those who test positive or refuse the drug test face a 52 week prohibition on unemployment benefits unless they enroll “in [a] substance abuse treatment program and [undergo] a job skills assessment.” See proposed Wis. Stat. § 108.133(3)(d).

Gov. Walker has earmarked $500,000 in the 2017 fiscal year budget $1 million in his budget for each of the next two fiscal years for this drug testing and treatment. Staff time and effort on creating and implementing these requirements are not funded separately but come out of general DWD funds. This $500,000 $2 million is a made-up number, and there is no evidence available about what the actual costs of the drug testing and treatment will be will be. Given all the cuts in this budget, these monies would certainly be better spent elsewhere (Wisconsin public radio and television, for instance, could use these funds) than in implementing a drug testing requirement that will very likely cost more than in any unemployment benefits it stops from being paid out.

UPDATE: I misread budget figures and have corrected the proposed budget amount based on the LFB analysis.

Drug testing in other occupations

Here, the proposal goes further than in seeking to implement current federal drug testing legislation. Governor Walker is asking the Department to identify on its own occupations for which drug testing is regularly conducted in the state — see (2)(am) above — and then to expand the drug testing of claimants to all of these fields as well as the federally mandated occupations. This expansion, however, is put on hold (as well as any part of this drug testing proposal) if the Department “determines that waiver of the provision is necessary to permit continued certification of this chapter for grants to this state under Title III of the federal Social Security Act or for maximum credit allowances to employers under the federal Unemployment Tax Act.” See proposed Wis. Stat. § 108.133(5)(d). In other words, federal approval is needed before implementation of this expanded testing, and no testing may take place until federal authorization is obtained. As a result, there is almost nothing that can be determined about this expansion from this proposal.  The substance is lacking.

Gov. Walker’s proposed drug testing plan: Meh

On January 22nd, Governor Walker announced his workforce readiness plan, which includes a proposal to drug test folks who receive food stamps or unemployment benefits.

Food stamps is operationally and legally distinct from unemployment, and so the purpose and mechanism for drug testing in each will have to be very different. Recent commentary on this drug testing issue is available from CogDis and the Wisconsin State Journal. And, here is what Governor Walker stated about this proposed drug testing:

Helping People Move from Government Dependence to Independence:

Some employers in high-demand fields, including manufacturing, require their employees be drug-free for safety and other reasons. To assist those looking to secure these positions, the budget includes a plan to require drug testing of those who are applying for or receiving benefits from programs, which may include unemployment insurance, FoodShare, Transform Milwaukee, transitional jobs, and others.

Those who fail the drug test will be offered the opportunity to participate in a drug treatment program, free of charge, as well as job training.

Huh?  This quotation is all that Governor Walker has actually said about this drug testing proposal. Based on this language, it is hard to know anything about this proposal other than that drug testing may be a possibility. Will drug testing be limited to former employees of an employer who does drug testing? Or, will the drug testing apply to any and all?  How will the drug testing be paid for and how will the tests be handled?  Without the actual mechanics and substance for this proposal (perhaps when the specific budget bill is revealed in early February), about all that can be said about who is actually affected . . .  meh.