Wage and Hour Laws for Cannabis Businesses Because it Really Matters

Avoid wage and hour violations or be shocked by the penalties assessed.

We have written recently about labor expenses related to cannabis businesses (here and here) and litigation (here, here, here and here). Though litigation and labor expenses are a part of doing business these days, there are things you can do to limit expenses and to avoid certain types of litigation. The case of Oregon’s Legacy Emanuel Medical Center provides an important lesson to cannabis business owners on how to do that.

Beginning in 2015, Legacy Emanuel employees began filing wage and hour complaints with the Oregon Bureau of Labor and Industries (BOLI), contending the hospital was not accommodating employee breaks, such as unpaid lunch breaks and paid shorter breaks throughout the day. BOLI launched an investigation and discovered over 4,400 meal and rest period violations for the hospital between 2015-2017 alone. BOLI discovered some employees had not been granted a break for their entire tenure with the hospital—up to 18 years in one nurse’s case.

Oregon BOLI did not hold back against Legacy and fined the hospital $276,680 for the violations—the largest assessment of civil penalties in the agency’s history. These penalties might be the beginning for the health care provider as BOLI has launched an investigation into Legacy’s other facilities throughout Oregon.

BOLI made several important findings during its investigation that are important to complying with wage and hour laws. First, it is important to note that Oregon wage and hour laws require employers provide 30-minute unpaid lunch breaks to any non-exempt employee who works more than six hours and paid 10-minute breaks for every four hours worked. BOLI found that though Legacy was encouraging its employees to take breaks, it was not actually providing its employees the means to do so. Specifically, employees did not have someone providing them with relief coverage during break times and therefore they did not take a break or the employees were interrupted with work during their breaks. BOLI found these practices violated wage and hour laws.

In whatever state you are operating your cannabis business, wage and hour violations are easy to avoid if you know the requirements. As Legacy Emanuel proves, egregious violations can come with a hefty civil penalty. Your job as a cannabis business owner is to make sure you provide your non-exempt cannabis employees with meaningful breaks. In other words, ensure your employees have coverage if necessary and have somewhere to go where they will be uninterrupted by work. If an employee is interrupted by work during one of their legally required breaks, the break no longer counts as the required break. Complying with wage and hour requirements can save you a lot of money in the long run.