The High Stakes of Cutting Corners in Regulatory Employee Compliance

LOS ANGELES — In the cannabis industry, regulatory compliance is not a mere formality, but it’s a vital safeguard against financial losses, legal challenges, and operational disruptions. An often overlooked yet incredibly high-stakes area of cannabis business operations is regulatory employee compliance management.

While compliance is notoriously complex for cannabis businesses, failing to stay in line with the regulations governing employee practices could risk not just fines, but your cannabis license and broader compliance efforts. Regulatory bodies that oversee employee compliance in the workplace are areas typically managed by HR and upper management, and they pose serious risks if ignored or improperly managed.

Neglecting to comply with employment-related laws can expose businesses to a multitude of risks, including hefty fines, workers’ compensation claims, and irreparable damage to their reputation. This article explores the critical financial and operational impacts of non-compliance and how Paylient Inc. is helping cannabis businesses navigate these challenges effectively.

Sizing Up High Stakes in Cannabis Operations

Operating within the cannabis sector comes with a unique and stringent regulatory framework. These regulations span federal, state and local laws governing employee safety, discrimination policies, and compensation standards. Failing to comply with these rules isn’t just a legal risk, but it can be financially devastating.

Regulatory bodies like the Occupational Safety and Health Administration (OSHA) and the Equal Employment Opportunity Commission (EEOC) have turned their attention to cannabis businesses, imposing penalties that can cripple even the largest operators.

Consider the case of major cannabis operators, which have faced substantial OSHA penalties after an employee’s death was linked to unsafe working conditions. These incidents underscore the serious financial and operational risks associated with cutting corners on employee compliance, whether as the result of over-trimmed budgeting, mismanagement, or grave unawareness of this complex segment of compliance.

While such cases are alarming, they also highlight an important lesson: the cost of non-compliance far exceeds the investment required for preventive measures.

Regulatory Oversight in Cannabis

Multiple regulatory bodies oversee compliance in the cannabis industry, ensuring a range of protections for employees. OSHA mandates safe working environments, while the EEOC enforces policies to prevent workplace discrimination. Additionally, the Americans with Disabilities Act (ADA) provides legal protections for employees with disabilities.

Failure to comply with these regulations can lead to costly penalties, legal fees, and forced corrective actions, all of which can significantly impact a company’s bottom line.

In 2023 alone, the EEOC filed 143 new employment discrimination lawsuits, signaling an aggressive stance on enforcing workplace equity. These lawsuits can be especially devastating for cannabis businesses, where profit margins are often thinner and compliance requirements more complex. For companies unprepared to handle these challenges, the financial toll can be severe.

Paylient’s Comprehensive Regulatory Employee Compliance and HR Solutions

This is where Paylient excels as a trusted partner in regulatory employee compliance and HR, providing tailored solutions to help cannabis businesses stay compliant within local, state and federal regulations for employees and employers.

Paylient is the only cannabis-dedicated Professional Employer Organization (PEO) in the cannabis industry offering a streamlined 6-for-1 solution that ensures comprehensive regulatory employee compliance across the entire talent-HR matrix, all within a shared liability model.

Some of their services, for example, includes managing workers’ compensation claims, offering proactive employee training, and assisting with employment-related disputes. By implementing comprehensive safety programs and conducting regular compliance audits, Paylient minimizes the risk of legal infractions.

Their approach goes beyond avoiding fines and extends to fostering a workplace environment that supports long-term success in an industry where the stakes are exceptionally high.

The Verdict: Minimize Risk

Regulatory employee non-compliance in the cannabis industry is far more costly than many businesses realize. Beyond steep financial penalties, it can disrupt operations, damage reputations, and, in the worst cases, result in tragedy. With Paylient as a partner, operators can ensure that as a cannabis business employer, their employees are not only compliant but also equipped with the advantage of streamlined employee management that comes with Paylient’s approach. Regulatory employee compliance can be more than a legal necessity safely and securely managed, but a strategic advantage, when Paylient helps you secure it.

By partnering with a PEO like Paylient to manage regulatory employee compliance and HR, cannabis operators can protect their business, their employees, and their future, while eliminating the administrative bloat that operational teams are burdened under. This allows executives and cannabis owners to instead spend time focusing on growth strategy and business development.

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Paylient is the only cannabis-dedicated Professional Employer Organization (PEO) offering a streamlined 6-for-1 solution that covers every aspect of the Talent-HR matrix, with a dedicated team for HR, Payroll, Risk and Safety, Regulatory Employee Compliance, Benefits and 401k, and a White-Labeled HRIS System.

For a deeper dive into navigating complex HR challenges in the cannabis industry, don’t miss our eBook, created in collaboration with Paylient: “Inside Cannabis with Daniela Williams: Navigating HR Challenges in the Cannabis Industry.” With real-world examples, expert insights, and step-by-step guidance, it’s packed with actionable takeaways to help operators proactively address employee compliance risks and streamline operations. Download your copy today here to explore in even more detail how to streamline your HR to scale your cannabis business successfully​.

For more information about how Paylient can streamline HR management and empower your cannabis business to thrive, visit their website at www.paylient.com to learn more or book a free discovery call.