As Cannabis Businesses Grow, So Do Applicable Employment Laws: Part 1

california cannabis employee
More employees. More laws.

Cannabis companies are subject to both state and federal employment laws and regulations. Certain employment laws only kick in once your cannabis business employs a certain number of employees. This post will the first in a series to explore when different employment laws take effect, relative to the size of your workforce. Today’s post focuses on California’s Sexual Harassment Requirements.

As we have discussed in the past, sexual harassment policies and trainings are very important for every cannabis business. California’s anti-discrimination and harassment statutes and implementing rules are some of the most comprehensive in the country. California has strict anti-harassment requirements and is one of the few states that requires certain private sector employers provide sexual harassment training for managers and supervisors. The anti-discrimination and harassment statute has different requirements depending on the size of the employee workforce.

California’s Fair Employment and Housing Act (“the Act”) requires all California employers to take reasonable steps to prevent discrimination and harassment from occurring. This requirement means that employers have to: 1) distribute the Department of Fair Employment and Housing’s brochure on sexual harassment (or a writing that complies with statutory requirements); 2) post an anti-discrimination poster and; 3) develop and distribute a written harassment, discrimination, and retaliation prevention policy. The requirements of the anti-harassment and discrimination policy are extensive and specific. In general, the policy must prohibit discrimination and harassment; create a complaint process; create an investigation process; and make clear that employees will not be exposed to retaliation for reporting discrimination or harassment. To put it simply—an expert should draft your anti-harassment policy.

California cannabis businesses that employ at least 50 employees must provide at least two hours of sexual harassment training every two years to each supervisor employee and to all new supervisor employees within six months of the assumption of a supervisory position. The training must be “effective interactive training” and includes: in-person instruction; e-learning; webinars; or a using audio, video, or computer technology with any of those training methods. The trainer must be a qualified trainer which is defined as “attorneys, professors or instructors, HR professionals or harassment prevention consultants.”

The California Department of Fair Employment and Housing enforces the Act and rules. DFEH can impose a civil penalty on any employer that fails to follow the above requirements. Those penalties can range from the moderate to the severe, depending on the violation and attending circumstances. Suffice it to say that you do not want to be caught up in a state-level enforcement action.

Although Act provisions go take effect at the 50 employee threshold, any new cannabis company should have an anti-discrimination and harassment policy in place as soon as it intends to hire its first employee. As cannabis business grow, additional requirements are placed on them. California’s requirements are strict and its best to get in front of these requirements before its too late.

Stay tuned for Part 2 of this series, where I will discuss state and federal family leave requirements for marijuana businesses.

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Author: Megan Vaniman

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