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- Introduction
- The importance of paying employees correctly
- Do dispensaries pay employees in cash?
- The risks of paying employees in cash
- Is paying the employees as independent contractors an option?
- Are there other options to pay employees?
- The different types of payroll services available
- How to choose the right payroll service for your cannabis business
- Conclusion
Introduction
The cannabis industry is growing rapidly, and with that growth comes a need for qualified employees. Dispensaries are competing for top talent, and one way they do this is by offering competitive wages and benefits.
So, how do cannabis dispensaries pay their employees? The answer varies depending on the dispensary, but there are some general trends.
1. The importance of paying employees correctly
Paying employees correctly is important for a number of reasons. First, it is simply the right thing to do. Employees deserve to be paid for their work, and they should be paid the correct amount. Second, paying employees correctly helps to ensure compliance with labor laws. There are a number of labor laws that govern how employees must be paid, and failing to comply with these laws can result in fines and penalties. Third, paying employees correctly helps to build trust and goodwill between the dispensary and its employees. Employees who are treated fairly and paid correctly are more likely to be loyal and productive.
2. Do dispensaries pay employees in cash?
Some dispensaries do pay their employees in cash. This is often done because of the challenges of accessing traditional banking services for cannabis businesses. However, paying employees in cash can be risky, as it can be difficult to track and report cash payments. Additionally, paying employees in cash can make it more difficult to comply with labor laws.
3. The risks of paying employees in cash
There are a number of risks associated with paying employees in cash. These risks include:
- It can be difficult to track and report cash payments. This can make it difficult to ensure that employees are being paid correctly and that the dispensary is complying with labor laws.
- It can be difficult to prove that an employee is an independent contractor if they are paid in cash. This can make it more difficult for the dispensary to avoid liability for employment taxes and benefits.
- It can be more difficult to collect unpaid wages if an employee is paid in cash. This is because there is no paper trail to track the payments.
4. Is paying the employees as independent contractors an option?
Another way to pay cannabis dispensary employees is to pay them as independent contractors. This means that the employees are responsible for paying their own taxes and benefits. However, this can be risky for the dispensary, as it can be difficult to determine whether the employees are truly independent contractors.
If you’re illegally operating by paying your employees as 1099 employees, and the labor board happens to walk into your store and see that your employees are being paid improperly, you could face substantial fines.
To determine whether an employee is an independent contractor, the dispensary should consider the following factors:
- The degree of control the dispensary has over the employee. If the dispensary has a lot of control over the employee’s work, then the employee is more likely to be an employee rather than an independent contractor.
- The level of skill required for the work. If the work requires a high level of skill, then the employee is more likely to be an independent contractor.
- The method of payment. If the employee is paid by the hour, then they are more likely to be an employee. However, if the employee is paid a flat fee for their work, then they are more likely to be an independent contractor.
5. Are there other options to pay employees?
In addition to paying employees in cash or as independent contractors, there are a number of other options available. These options include:
- Paying employees through a payroll service. A payroll service can help the dispensary to calculate and withhold taxes, as well as issue paychecks and track employee hours. This ensures that the dispensary is paying its employees correctly and complying with all applicable laws.
- Paying employees through a bank account. This is the most common way to pay employees, and it is the safest and most secure option.
- Paying employees through a pay card. This is a less common option, but it can be convenient for employees who do not have a bank account.
6. The different types of payroll services available
There are a number of different payroll services available. The best service for you will depend on your specific needs. Some factors to consider include the size of your business, the location of your business, and the features that you need.
| Payroll Company | Main Features | Pricing |
|---|---|---|
| Greenleaf | Automated payroll processing, tax compliance, benefits administration, HR management | Custom pricing based on business size and needs. Contact for pricing |
| People Guru | Full-service payroll processing, tax compliance, HR tools, time and attendance tracking | Custom pricing based on business size and needs |
| SurePayroll | Online payroll processing, tax compliance, employee self-service, benefits administration | Starts at $19.99/month + $5/employee per month |
| UKG | Full-service payroll processing, tax compliance, HR tools, time and attendance tracking | Custom pricing based on business size and needs |
| UZIO | Tax calculation and reporting, employee self-service, benefits administration, leave management, analytics and dashboards, regulatory compliance, integration with HR and accounting software | PEPM (Per Employee Per Month) based transparent pricing available on the website |
| Wurk | Cannabis industry-specific HR software, including payroll processing, time and attendance tracking, and tax compliance | Custom pricing based on business size and needs |
7. How to choose the right payroll service for your cannabis business
When choosing a payroll service, there are a few things to keep in mind:
- Does the software provider have experience working with cannabis companies?
- Does the software provider offer features such as tax calculation and reporting, employee self-service, benefits administration, leave management, analytics and dashboards, and regulatory compliance?
- Does the software provider offer integration with HR and accounting software?
- Does the software provider offer support during the implementation process and ongoing training for employees?
- Is the software scalable to accommodate the needs of a growing cannabis company?
- Does the software provider have a strong reputation for customer support and service?
By considering these factors and using the checklist, cannabis companies can make an informed decision when choosing payroll software that meets their specific needs.
Recommended Reading: Biggest pain point with Payroll and HR software
Conclusion
Paying employees correctly is important for a number of reasons. By following the steps outlined in this blog post, you can ensure that you are paying your employees correctly and complying with all applicable laws.
Overall, choosing the right payroll software provider for a cannabis company is crucial for ensuring accurate and compliant payroll processes. By considering the features, cost, regulatory compliance, and support offered by potential providers, businesses can make an informed decision and select the best software for their needs.
Get in touch with us for an expert-led demo to know more about UZIO payroll services.
