I bet that the 40V measurement is likely a "ghost voltage," which is a misleading reading that can show up as a side effect of using a digital voltmeter on a dead wire. The misleading measurement happens because there is capacitive coupling when you have an un-energized wire running next to an energized one. The impedance of the voltmeter itself causes the high voltage to register, though the current it is capable of delivering would be miniscule. In this case, it would be from the switched wire running next to the hot wire.
To determine whether or not the voltage is actually present and being fed from a true voltage source, rather than being a misleading reading of an induced voltage from an adjacent wire, you need a low-impedance voltmeter. Fluke makes several.
Given that this is the only time I am likely ever going to need this test, I'm not going to purchase a dedicated low-impedance tester. Instead of doing that I'm going to do a few brute-force tests.
We're going to start with the assumption that the red wire is likely connected to nothing other than the outlet. Today, when the switch is closed, it sends connects the black wire to the red one and sends hot down the red wire.
As far as we know, no other devices are connected to this switch. If we shut off the circuit breaker, connect both ends of the red wire to ground, then turn it back on, the circuit breaker shouldn't trip. If this is the case, measure the current from the red wire to ground on each side, and from the red wire to neutral and hot. There shouldn't be any current flowing into or out of a dead wire, period.
Obviously, this was done at my own risk. Current to ground came up with .001 mA. Tied the red wire to neutral at the outlet, connected the smart switch, and works like a charm.
OK, disconnect that pendant light until you fix the problem. you can't have a ground wire carrying load. There is no neutral in that box.
You've got to choices (well, maybe more), you can run a new feed to the duplex switch and utilize the unused white and red wires to get neutral and switched power to the pendant light after disconnecting the switch from the existing source. You could also run a new feed to the pendant light box, connect neutral to light and utilize the black and red wires for switched hot after disconnecting switch from existing source.
Remember to connect all grounds from new feeds to existing ground wires
Best Answer
Yes there are risks to safety.
If anything interupts the ground conductor that leads back to the service entrance, suddenly your switch is energizing the ground on that circuit, so anything connected to it is also going to be energized (i.e. a printer that has a grounded metal chassis suddenly has a live metal chassis).
You guess that this is only a few milliamps, but do you know under all operating conditions that this is the case? Just 10mA is enough current to cause muscular paralysis -- and 100mA is fatal.
You may think that "well yeah, but it would take multiple bad things to happen for this to be a safety hazard"... but you're already doing one of the bad things it would take, so you're one conductor away from a very unsafe situation.
There are some smart switches rated for use without a neutral (but they generally only work with incandescent lamps).
Since you're just controlling a receptacle, the easiest thing to do is use a plug-in lamp or appliance module.
But if you were controlling a ceiling light fixture, you could use an in-line switch module that wires in at the lamp fixture itself instead of at the switch:
You could keep the switch on all the time to supply "line" to the lamp fixture, and use the existing neutral at that fixture, then let the switch module control power to the lamp. Then you can use a batttery operated wall switch to control the lamp module.