Joint Considerations for Cannabis Industry Employers: Top Ten Takeaways

While cannabis industry employers face the same legal obligations as mainstream companies, there are a host of considerations these employers need to be aware of as they develop. This article provides a brief synopsis of ten considerations.

1. As employers approach the fifty-employee minimum, they should be aware that they will then be subject to the National Labor Relations Act (among other laws). Once an employer reaches that threshold, employees have the right to unionize, organize, voice concerns, discuss wage and employment issues, etc. The result may be Collective Bargaining Agreement negotiations.
2. Some states have variations of “Labor Peace Agreements”—contracts between a union and employer that require parties to waive certain rights under federal labor law. It is particularly important for employers to know whether their state requires these Agreements and the substance of those requirements.
3. Employers should beware of the potential for misclassification, which can result in improper payment, taxation, and errors in benefits, among other things. Being conscientious of the legal requirements surrounding classification as an employee or independent contractor, how the employee is paid, and whether the employee receives benefits, can help protect against violations of labor and wage and hour laws.
4. Federal, state, or local law may require employers to provide leave for employees. Some laws may require leave when the employer reaches five employees, while others apply to those with fifty or more employees. The awareness of growth and applicable law is vital.
5. Employers should familiarize themselves with the Department of Labor and state requirements for classifying employees as exempt under the Fair Labor Standards Act. Lack of familiarity can lead to civil penalties or lawsuits when misclassification results in a failure to pay owed overtime or other violations.
6. For business and employee health, cannabis industry employers need to be aware of and informed about, anti-discrimination, anti-harassment, and accommodations laws on the local, state, and federal level. From Equal Employment Opportunity to mandatory harassment training to required reasonable accommodations—intentional or unintentional violations can lead to administrative charges, civil lawsuits, civil penalties, and sometimes, criminal penalties.
7. Navigating COVID-19 in the workplace continues to be a quickly changing game. After the federal Families First Coronavirus Response Act expired, some states implemented their own protections for employees, which may require paid leave for vaccination or listing COVID-19 as a disability, among other things.
8. While the cannabis industry is a newer field, employee benefits are nothing new. Employers should be aware of what benefits are common and which are required, and identify which benefits are most attractive to their employee base to maximize employee retention.
9. Whether employers are choosing voluntary benefits or implementing required benefits, entering discussions with service providers requires careful navigation. Service providers may exercise leverage over the cannabis industry, so employers may be required to negotiate.
10. Retirement plans in the hemp industry differ from the cannabis industry. Understanding the differences and potential effects is key to ensuring employers obtain retirement benefits at optimal costs.

If you have any questions about the contents of this article, please contact Carolyn Horton at chorton@clarkhill.com or your Clark Hill attorney.