Keeping pace with the ever changing state and federal regulations of being a cannabis employer is complicated. A misstep can be financially devastating.
A marijuana dispensary with locations in Chicopee, Bridgewater, and Great Barrington, MA failed to properly pay hundreds of employees premium Sunday pay and covered holidays, and consequently, is now facing nearly $300,000 in restitution and penalties.
Here’s what happened:
The President and CEO and Treasurer of the marijuana dispensary have been issued a single citation by the Attorney General’s Office for violating Massachusetts’ wage and hour laws.
“Our office works to ensure that employees are rightfully compensated under the law for the work they do across industries in Massachusetts,” Attorney General Maura Healey said. “As a result of our investigation and action in this case, nearly three hundred employees who were not paid properly…will now be made whole.”
An employee had filed a complaint about premium pay in December 2020, at which point the Attorney General’s Fair Labor Division began its investigation. The investigation determined that almost 300 employees were owed hundreds of thousands of premium pay dollars for work performed on Sundays and covered holidays.
Massachusetts’ 2021 wage and hour laws state that employees who are entitled to premium pay must be paid 1.2 times their regular hourly rate for work on Sundays and covered holidays. Come 2022, that rate will go down to 1.1 times their regular rate. Come 2023, the premium pay requirement will be eliminated altogether.
The marijuana dispensary has completely cooperated with the investigation and has since come into compliance with the Massachusetts premium and holiday pay laws.
Like we saw with the Massachusetts marijuana dispensary above, even simple payroll processes can expose a cannabis-based business to wage and hour and tax penalties. Typically, the more complex your cannabis business, the greater effect inaccurate data and tax issues will have on you and your business. No matter how big or small your cannabis company is, we have a payroll solution that fits.
At AdaptiveHR, we offer customized payroll solutions that meet the specific needs of your cannabis business. We have packages that include direct deposit, live checks, and paycards, online data management, real-time detailed reporting, garnishment and deduction administration, general ledger uploads, and online access to payroll management for both managers and employees.
We can also help your cannabis business stay up to date with the latest tax rates and regulations. Our HR Professionals can assist with:
1. Tax administration and reporting
2. Periodic, quarterly, and annual filings
3. W-2 processing and production
4. Federal, state, and local compliance support
5. Guidance and support on IRS Rule 280e
Ultimately, utilizing our customized payroll solutions will help your cannabis business improve data accuracy, reduce employer liability, and increase process oversight. It will also offer your employees unparalleled insight into their pay so that wage and hour citations, like the unfortunate one issued to the MA marijuana dispensary, are not issued to you and your business.
We are here to help. We have a passion for supporting cannabis businesses big and small, and the last thing we want to see is medical and recreational cannabis companies having to pay outrageous fees for failing to properly track and pay employees for hours they have worked. Fill out the form below to have one of our HR Professionals reach out to you directly or give us a call at (833) 462-3278 if you have any questions or would like additional information. It is never too late to ask for help!