Four Legal Issues for Businesses to Watch in 2017

Regulatory changes and litigation trends raise several issues for both small and large businesses in Pennsylvania. While we are only a few months into 2017, there are several developing issues that businesses should be aware of this year.

1. Medical Marijuana Legalization in Pennsylvania

Pennsylvania legalized the production and sale of medical marijuana in 2016, and dispensaries making medical marijuana available to patients will open throughout the Commonwealth this year. Employers are prohibited from discriminating against employees solely on the basis of the employee’s status as a certified user of medical marijuana. Employers and human resources managers should review their drug use policies and train managers and supervisors to understand the discrimination provisions of the new law. Additionally, employers should review whether certain positions involve dangerous activities that employees certified to use medical marijuana may be prohibited from performing.

While discrimination against employees certified to use medical marijuana is prohibited, Pennsylvania’s medical marijuana law still allows employers to discipline employees under the influence of medical marijuana at work. Employers may need to work with drug testing vendors to develop accurate methods of assessing whether an employee is or is not under the influence of marijuana on the job. As medical marijuana use expands in Pennsylvania, we can expect to see cases where employees discharged for testing positive for marijuana argue that they are being discriminated against for the lawful use of medical marijuana. Employers should consider revising their handbooks and drug policies as well as testing procedures now to minimize conflicts with the medical marijuana law moving forward.

2. Local Employment Rules

While the Pennsylvania legislature struck down Philadelphia’s paid sick leave ordinance in 2015, other areas of local employment regulation are likely to continue to effect employers in 2017. Philadelphia is considering an ordinance prohibiting employers from asking about prospective employee salary history. This is just one example of a national trend where cities and municipalities, rather than state or federal government, enact laws affecting employment. Businesses should closely monitor proposed and enacted ordinances in municipalities where they operate to ensure compliance with any local regulation. While many examples of these ordinances include exceptions for small businesses or businesses operating in certain industries, employers should never assume that, because of their size, a local rule or ordinance does not apply.

3. Potential ACA Changes and Insurance Issues

The Affordable Care Act requires medium-sized and large employers to offer affordable health insurance coverage to employees. The ACA imposed certain additional coverage requirements on employers already offering health insurance, such as a prohibition on annual and lifetime limits and annual out-of-pocket limits. Many of these requirements, including the ban on waiting periods for preexisting conditions coverage, are fairly popular and may continue to exist even if other parts of the ACA are repealed and/or replaced.

Employers should work closely with their health insurance providers to comply with required coverages under the current law. Additionally, businesses would be wise to anticipate some degree of volatility, possibly including higher prices, in the insurance market until (and possibly after) any changes are made to the ACA.

4. Consumer and Employee Data Privacy

Consumer data breaches from large, national retailers frequently make the news, but many, if not most, small businesses collect the same type of consumer information. As the law continues to develop on what standards businesses should employ to safeguard this information in 2017, businesses should update their privacy policies accordingly to communicate to customers what information is kept and how that information is protected from unauthorized access. Employers should also communicate this information to employees who handle sensitive data and train employees to recognize common phishing and other scams that could compromise a company’s network and put customers at risk. Similarly, employers should review what information they collect about their own employees and how that information is stored and distributed. Verifying that vendors with access to employee information, such as insurers and payroll processors, take adequate steps to safeguard sensitive personal information is essential for employers who disclose this information to third parties.