Quest Diagnostics' (DGX) upgraded long-term guidance based on its new and extended two-point strategy looks promising. However, it expresses resentment against the recent PAMA-related CMS proposal.
Employers struggling to fill jobs have begun to relax or eliminate drug testing requirements amid increased marijuana legalization and a tightening U.S. job market. Drug testing has been standard procedure for decades across a variety of industries, ranging from finance to manufacturing to healthcare - which several employers have begun to eschew. Las Vegas based Excellence Health Inc., for example, stopped testing employees for marijuana two years ago - and completely dropped drug tests in the beginning of 2018 for employees on the pharmaceutical side of the business. “We don’t care what people do in their free time,” said company spokesperson Liam Meyer. “We want to help these people, instead of saying: ‘Hey, you can’t work for us because you used a substance." The company also provides a hotline for workers who might be struggling with drug issues. MassRoots employee taking pot break during brainstorming sessionIn February, AutoNation Inc. - the largest auto dealer in the country, announced it would no longer refuse job applicants who tested positive for marijuana, while the Denver Post ended pre-employment drug testing last September for all positions that don't require safety precautions. As the Daily Caller reported in February, the manufacturing industry in Ohio has experienced stunted growth because many potential employees are also addicted to drugs - primarily opioids. "Steve Staub, who runs Staub Manufacturing Solutions in Ohio, attended the State of the Union address Tuesday as a special guest to President Donald Trump. While there, aside from participating in the pageantry, Staub discussed problems in the manufacturing industry and business in general with the president. Staub mentioned to Trump the toll the opioid crisis has had on business’ ability to fill jobs. About two million Americans nationwide are addicted to the drug. The crisis has been particularly hard on Staub’s home state of Ohio, were thousands of job applicants are turned away because of substance abuse," reports the Caller. “In Ohio alone, they have about 20,000 available jobs in manufacturing. In Dayton, Ohio, where I’m from, we have about 4,000 jobs available today in manufacturing that we can’t fill,” Staub told TheDCNF. “We can’t get people to pass a drug test.” States that have legalized either recreational or medicinal marijuana now lead the way in companies which are dropping drug tests. A survey last year by the Mountain States Employers Council of 609 Colorado employers found that the share of companies testing for marijuana use fell to 66 percent, down from 77 percent the year before. -Bloomberg Last year the Fed noted in their traditionally drab Beige Book that employers are having an increasingly difficult time finding qualified and skilled workers to fill empty positions. Labor markets remained tight, and employers in most Districts had more difficulty filling low-skilled positions, although labor demand was stronger for higher skilled workers. Modest wage increases broadened, and reports noted bigger increases for workers with skills that are in short supply. A couple of Districts reported that worker shortages and increased labor costs were restraining growth in some sectors, including manufacturing, transportation, and construction. And according to the Boston Fed the qualified labor shortage is so bad, that the hit rate on hiring after a simple math and drug test, collapses below 50%. To wit: Labor markets in the First District continued to tighten somewhat. Many employers sought to add modestly to head counts (although one manufacturer laid off about 4 percent of staff over the last year), while wage increases were modest. Some smaller retailers noted increasing labor costs, in part driven by increases in state minimum wages being implemented over a multi-year period. Restaurant contacts, particularly in heavy tourism regions, expressed concern about possible labor shortages this summer, exacerbated by an expected slowdown in granting H-2B visas. Half of contacted manufacturers were hiring, though none in large numbers; several firms said it was hard to find workers. One respondent said that during a recent six-month attempt to add to staff for a new product, two-thirds of applicants for assembly line jobs were screened out before hiring via math tests and drug tests; of 400 workers hired, only 180 worked out. According to data from Quest Diagnostics Inc., failed drug tests reached an all-time high in 2017, which is estimated to get worse as more people begin to use state-legalized marijuana. “The benefits of at least reconsidering the drug policy on behalf of an employer would be pretty high,” according to Mercer Law School professor Jeremy Kidd, who wrote a paper on the economics of workplace drug testing. “A blanket prohibition can’t possibly be the most economically efficient policy.” Kidd also believes that eliminating drug testing would benefit the overall economy, allowing employers to hire the best, and theoretically most-productive workers which would otherwise not fall under consideration due to their recreational (or medical) habits. Indeed, more and more companies having a hard time hiring with unemployment around 4 percent are quietly pulling back on their strict drug policies. “Employers are really strapped and saying ‘We’re going to forgive certain things,’” said James Reidy, a lawyer that works with employers on their human resources policies. Reidy knows of a half-dozen other large employers that have quietly changed their policies in recent years. Not all companies want to advertise the change, fearing it might imply they are soft on drugs. (Even former FBI director James Comey in 2014 half-joked about the need for the bureau to re-evaluate its drug-testing policy to attract the best candidates.) -Bloomberg Employers are justifying the changes by claiming pre-employment testing isn't worth the expense in a society which has become increasingly accepting of recreational drug use. In October, a Gallup poll found that 64 percent of Americans favor legalizing marijuana - while Republican support for legalization is now at a majority level. When Gallup began asking the question in 1969, just 12% of American supported changing Marijuana's legal status. As Gallup concludes: "As efforts to legalize marijuana at the state level continue to yield successes, public opinion, too, has shifted toward greater support. The Department of Justice under the current Republican administration has been perceived as hostile to state-level legalization. But Attorney General Jeff Sessions could find himself out of step with his own party if the current trends continue. Rank-and-file Republicans' views on the issue have evolved just as Democrats' and independents' have, though Republicans remain least likely to support legalizing pot." With drug tests costing employers between $30 and $50 each time, the value of maintaining a drug-free workplace has become less and less attractive tradeoff. While pre-employment drug testing has waned in recent years, dangerous jobs such as operating heavy machinery and flying airplanes will always require checks. Companies which also contract with the U.S. government will also likely continue the practice of drug testing in accordance with federal mandates. Not all employers are feelin' the vibe. Burger King parent company Restaurant Brands International Inc isn't altering its corporate marijuana policy, according to CEO Daniel Schwartz. Ford Motor Co. similarly treats pot as an illegal substance. Said companies have an ally in Attorney General Jeff Sessions - whose war on marijuana is in direct conflict with several statements made by President Trump on the campaign trail in which he said the federal government should leave weed policy to the states. "In terms of marijuana and legalization, I think that should be a state issue, state-by-state," Trump told The Washington Post. "… Marijuana is such a big thing. I think medical should happen — right? Don't we agree? I think so. And then I really believe we should leave it up to the states." Sessions, meanwhile, rescinded Obama-era policies in January which enabled state-legalized cannabis industries to thrive. The uncertainty caused by the DOJ's actions may put a crimp in both the industry, as well as employer plans to relax their drug policies. Moreover, employers have to weigh the financial costs of changing their rules surrounding drug tests - as discounts are often offered on workers' compensation insurance for companies which maintain "drug free" workplaces. That said, the type of job the test is for makes a huge difference - as white collar and other clerical positions are less likely to have many workers comp claims vs. factory jobs, for example. For many employers, the money saved by meeting the "drug free zone" qualifications isn't worth the savings. “We assume that a certain level of employees are going to be partaking on the weekends,” said Reidy. “We don’t care. We’re going to exclude a whole group of people, and we desperately need workers.”
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