The Pitfalls of Payroll

Written By Guest Writer - WECO

Compliant business services in the cannabis industry are becoming an important aspect of operations as state regulators tighten up their regulatory programs across the country.  Today companies are searching for partners that can exceed their needs, and position them for the future. Payroll and HR are important core services, and successful cannabis operators look beyond a traditional payroll provider for a full-service workforce management solution. A comprehensive approach to payroll is needed to support a client's growth and the human resource development of its workforce.  

A workforce management solution is required that can function as your payroll administrator and human resource manager, and help mitigate employment liabilities such as benefits, insurance, and claims. Contracting with an organization that can manage these services may provide long-term benefits. Things like labor contracts for payroll, and Human Resource administration, including services similar to a Professional Employment Organization (PEO) will be important to meet state guidelines. 

This model frees up your internal resources to grow and develop your core business, while also offsetting risks associated with employment, taxes, and insurance.  

There are key benefits to utilizing a workforce management services company. 

  • Risk Mitigation –Workers Compensation, Department of Labor unemployment claims.
  • Employment verification and background screens.
  • Benefits Management – Group health and wellness management and PTO administration.
  • Onboarding documentation and timekeeping management in one platform.
  • Reports and filings with no additional year end fees.

Nick Murer, CEO of WECO, a well known full service payroll processing solution, says “focus on finding a partner that can help your organization maintain tax and legislative compliance, drive peoples productivity, and streamline back-office HR and payroll functions with a single solution in a joint employment model”  “Work with a firm with a purpose of finding a complete back-office partner, that can enable strong individuals to grow, reduce overhead cost, and add value” continued Murer. 

Areas that may need to be customized for your company due to operations in the cannabis industry:

  • Processing of payroll and payroll taxes, and benefits.
  • Workers’ Compensation insurance for employees, OSHA vs State Regulators  
  • Health insurance plan options and limitations.
  • Unemployment claims, what's legal is the cannabis space.          
  • • End of year W2 distribution vs PEO
  • General Liability insurance for employees as part of a cannabis insurance program.
  • Payroll Invoicing - separate invoices for each location/company for 280E tax mitigation
  • Management of pre-employment screenings and background checks.
  • Managing all post-employment HR related issues, Federal considerations.
  • Employee portals and online employee management tools may need special functions.

Web-based employee services platforms to manage employee records, and benefits, including affordable health care and PTO in one central location are the now the standard of the industry, but having software does not make a company expert in providing service in the cannabis space. 

Note: WECO and Nick Murer serve the legal cannabis industry nationwide, and through its strategic relationships can assist with establishing compliant business services, visit www.weco.blue.