What Does Federal Rescheduling of Cannabis Mean for New York Employers

The federal government partially changed how cannabis is classified under the Controlled Substances Act. State-licensed medical cannabis and FDA-approved cannabis products are now classified as Schedule III substances under federal law.

However, adult-use (recreational) cannabis was not included in this change and remains Schedule I under federal law.

Schedule III substances are recognized by the federal government as having:

• Accepted medical use 
• A lower potential for abuse or dependence compared to Schedule I or II substances 

This is the first time the federal government has formally recognized accepted medical use for state-licensed medical cannabis under the Controlled Substances Act.

No. Rescheduling is not the same as federal legalization. Cannabis remains a controlled substance under federal law, and unauthorized possession, distribution, or production of cannabis can still result in federal penalties.

No. New York’s cannabis laws and regulations, including the Marijuana Regulation and Taxation Act (MRTA), remain fully in effect. Businesses and workers must still comply with all applicable New York State regulations.

New York’s cannabis law (the MRTA) amended Section 201-D of the New York Labor Law to clarify that cannabis used in accordance with New York State law is a legal consumable product. As such, employers are prohibited from discriminating against employees based on the employee’s use of cannabis outside of the workplace, outside of work hours, and without use of the employer’s equipment or property. Employers may take employment action or prohibit employee conduct where: 

• An employer is/was required to take such action by state or federal statute, regulation, or ordinance, or other state or federal governmental mandate 
• The employer would be in violation of federal law
• The employer would lose a federal contract or federal funding 
• The employee, while working, manifests specific articulable symptoms of cannabis impairment that decrease or lessen the employee’s performance of the employee’s tasks or duties 
• The employee, while working, manifests specific articulable symptoms of cannabis impairment that interfere with the employer’s obligation to provide a safe and healthy workplace as required by state and federal workplace safety laws

If a New York State employer discriminates against an employee for lawful off-the-clock cannabis consumption, they violate Section 201-d of the New York Labor Law. As a result, the employee can pursue a private lawsuit for wrongful termination, and the employer may face civil penalties and court-mandated remedies. Additionally, if the New York State Attorney General steps in on behalf of the public to stop the unlawful employer conduct, the court can impose civil penalties against the employer.

Yes, but in New York, the biggest liability is still with the MRTA and NY Labor Law § 201-d, not just federal rescheduling. Employers may only act if the employee shows specific articulable symptoms of impairment that decrease performance or interfere with workplace safety. Drug tests alone cannot establish impairment and odor alone is not sufficient evidence.

In light of rescheduling, medical cannabis may now trigger ADA accommodations obligations, however, New York employers are already required to provide reasonable accommodations to medical cannabis patients under the New York Human Rights Law. Now, failure to provide accommodations to medical cannabis patients or disciplining based on perceived impairment may not only trigger disability claims under New York Human Rights Law but potentially under the ADA as well.

Lastly, employers are still required to maintain a safe workplace and should take action when impairment affects safety or job performance. 

Not automatically. Many workplace drug testing and safety requirements remain in place, especially in federally regulated industries and positions subject to Department of Transportation (DOT) rules.

Employers should continue following applicable federal, state, and local employment laws when developing workplace policies.

Possibly. The DEA was directed to restart formal rulemaking proceedings to consider moving all cannabis to Schedule III. Additional hearings, public comment periods, and federal guidance are expected.

An individual’s status as a certified medical cannabis patient is still considered a disability under the New York State Human Rights Law. Employers and businesses open to the public are required to provide reasonable accommodations for a person with a disability. A reasonable accommodation may include a modification or adjustment to a work or public environment to accommodate the patient’s certified use of medical cannabis.

Certified medical cannabis patients have the same rights to reasonable accommodations and amended job duties that are available to injured workers under the workers’ compensation law. The refusal to make reasonable modifications to policies, practices, and procedures for a person with a disability is an unlawful discriminatory practice.

Possibly. The DEA was directed to restart formal rulemaking proceedings to consider moving all cannabis to Schedule III. Additional hearings, public comment periods, and federal guidance are expected."

The ILR School Labor and Employment Law Program provides educational information only and does not provide legal advice. If you have questions about how federal rescheduling may affect you or your business operations, consult a qualified attorney.