I’ve been doing quite a bit of research on the safety of using wood pallets for furniture building and anything really that comes into close contact with people. The simple answer is, there is no simple answer.
What are the issues?
Chemicals and pestisides. Sitting out in the environment around the world.
What pallets are safe?
From what I’ve read it seems that most pallets are stamped ____ or HT. HT means heat treated and are deemed more safe than the other option. This is because there aren’t any chemicals used in the process.
Some comments on the internet have said things like “pallets are used and in close contact with our food, consumer products, and almost anything that is shipped via truck. If they’re really that bad, would we be shipping food on them?” That’s an incredibly valid point. The chemicals used on pallets have probably come in contact to other things that are currently in your house. You just haven’t seen the shipping process so it doesn’t come to mind.
Take it all with a grain of salt.
To be safe I would look for heat treated (HT) pallets. Use a mask while you’re doing any sanding/cutting of the pallet wood so that you’re not breathing in any chemicals that may be in the wood, just as a precaution.
Useful links and discussion:
the scoop on safe shipping pallets 101