My company makes dozens of pallets each day so I thought I would clear the air in regard to new pallets in the U.S.
Step 1: NPPO/IPPC Standars
Pallets now require an IPPC logo which certifies that the pallet was heat-treated or fumigated with Methyl Bromide.
The standard is a 2 letter country code (xx), a unique number (000) assigned by the National Plant Protection Organization (NPPO), HT for Heat Treatment or MB for Methyl Bromide, and DB to signify debarked.
The logo in the first image shows that it was produced in the U.S., the material was provided by 11187 (Unique number assigned to the producer), it was heat treated (HT) and was verified by PRL (Package Research Laboratory)
Step 2: Things to Consider
This pallet is about as clean as they get. It was heat treated, produced in the U.S. and debarked.
There are some additional codes that can go on pallets but the main one to watch out for is MB. It means it was treated with Methyl Bromide.
If you don't see an IPPC logo then you know not to use it. While a pallet may be perfectly safe without the logo, it could also mean it was treated with chemicals.
Another issue is what has spilled on the pallet. I'd be careful, personally, about oily pallets or ones that have clearly had something spilled on them.
Step 3: Reference
IPPC Standards FAQ
Also, keep in mind that many pallets are used for international shipping. While most industrialized countries have an NPPO, not all do. That means the country may not comply with the standards of other countries.
For the most part, if you stick by these guidelines and don't make a food cutting board from a pallet, you should be safe using them for projects.
As with any project involving cutting wood, you should always use a mask to keep from breathing in particles and pollutants.