5 HR Compliance Issues for the Cannabis Industry

October 21, 2020 - minute read

The rapid growth of the cannabis industry has placed an immense amount of pressure on all positions within its various sectors in recent years. Given that cannabis businesses already face complex compliance concerns and workforce management obstacles in an evolving industry, HR personnel are likely to be feeling these pressures most of all.

As your industry grows in size and regulation, it’s unlikely these pressures will lessen. Luckily, businesses have found ways of identifying these challenges and curating effective solutions. Let’s make sure you’re aware of the top 5 cannabis industry compliance struggles, as well as some HR tools to ease your burdens in 2021.

1. Fulfilling Proper Employee Training


Your cannabis business could be subject to a variety of training requirements depending on your state. In California, for instance, all licensed cannabis businesses are required to provide a CAL/OSHA 30-Hour General Industry safety course to one supervisor and at least one employee. That said, the cannabis industry still largely lacks standardized education and national training standards which can lead to under prepared employees and potential lawsuits if you aren’t careful.

A dependable solution for addressing this concern is adopting a learning management system. Whether you’re getting new hires up to speed, upskilling current employees, or providing mandated trainings unique to the cannabis industry, continuously educating your employees will help you avoid legal missteps and prepare your workforce for success.

2. Inclusive Hiring

In a newly emerging industry like the cannabis industry, casual recruiting methods won’t cut it anymore. According to the National Cannabis Industry Association, many of the industry’s states have passed strict requirements around diversity initiatives in the cannabis application process and hiring requirements moving forward. That is why your business needs to find innovative ways to recruit compliantly and competitively.

You need a solution that can help you tailor your applicant searches, job boards, interviewing process and decision-making for optimum satisfaction. Check out the benefits of using an applicant tracking solution here.

3. Reporting Correct Data

New compliance regulations are constantly evolving and forcing businesses to adjust their reporting requirements, data processing methods, employee tracking, and more. For a fledgling industry like the legalized cannabis industry, the consequences for making any mistakes around things like federal workforce reporting, accident or hazardous material reporting, and quality control shipment reporting are high.

Even small errors related to these operational functions are opportunities for your cannabis business to get investigated. Consider using a Human Capital Management system to assist with monitoring your company’s data and easy reporting with the appropriate agencies.

4. I-9 Compliance

As you know, the I-9, or Employee Eligibility Form, helps verify a new hire’s identity and eligibility to work in the United States. However, under the Immigration Reform and Control Act, if someone was not born in the U.S. but is legally able to work here, you cannot deny them employment due to lack of citizenship. That means you need to uphold this standard while also successfully confirming eligibility with the appropriate state and federal agencies within three business days of your new hire's first day.

What’s the easiest way to ensure I-9 compliance? Employment Verification Services, or using E-Verify, allows you to verify the identity and employment eligibility of your new hires electronically. Check out our blog on cannabis onboarding for more insight.

5. Wage and Hour Laws

A common challenge cannabis businesses come up against are wage and hour laws. Wage compliance requires you to not only correctly classify your employees and identify their specific federal and state compliance requirements- but maintain accurate records, flawless payroll calculations, and timely tax filings as well. This is especially relevant for those of you operating in California- where meal breaks, rest breaks and overtime rules are particularly tricky.

One way to ease your time tracking and ensure payroll accuracy is by using a flexible payroll system. These systems offer cloud-based time and attendance tracking that feeds seamlessly into your payroll and reporting modules to alleviate manual errors and free up your HR staff for other important tasks.

HCM Solutions for the Cannabis Industry

EPAY Systems is taking on the cannabis industry with the only human capital management solution built specifically with your hourly, distributed workforce in mind. Our features go above and beyond to ensure your cannabis industry compliance struggles are overcome effectively- from onboarding to benefits administration, payroll, scheduling, and more.

Check out our blogs on banking for your industry or onboarding cannabis employees for more compliance tips and tricks. Or watch our two-minute demo to learn why you need EPAY to become your in-house HR specialist.

Filed Under: Compliance Cannabis