Cannabis Industry Employment Numbers on the Rise: Misclassification Claims to Follow?

Author: Katy M. Young

In a recent article in Marijuana Business Daily , author Eli McVey posited that the cannabis industry now employs 165,000 to 230,000 workers, which is more than the number of employees who are dental hygienists, bakers, or massage therapists.  At the NCIA’s Business Expo  in Oakland, I was a speaker on a panel discussing how cannabis business owners need to be mindful of employment classification issues.

Here at Ad Astra, we predict (along with many other experienced attorneys) that employment misclassification claims are going to be the next big wave of litigation in the cannabis industry.

As an example, I came upon a cannabis grower who operated as a sole proprietor.  When I asked if she had any employees, the owner responded: “No, just my boyfriend who works with me and we split profits 50/50, then a few people [her trimmers] who come and go.”   She must have seen the reaction on my face, because she then asked what it was that she said. I explained that in a business context, anyone working with you is either your business partner/co-owner, your employee, or your independent contractor. She said that her boyfriend is NOT her partner, though I was sure she called him her “partner” earlier in the conversation.

Additionally, this owner insisted that her trimmers were independent contractors.  She obviously was unaware that there is a multi-factor test for determining whether one is truly an independent contractor.  California’s default is that a person is an employee, and so it is far more likely that the trimmers are really misclassified employees. It came as a shock to her that there were no in-betweens, and that at any moment, one of those people she considers friends could go to the EDD and complain that they were misclassified as independent contractors when they are really employees.

If there are 165,000 employees we know of, how many “independent contractors” are there? How many potential claims does that translate to? Many!  Please do not fall into this trap.

If you are a business owner in the cannabis space, it is imperative that you understand the difference between employees and independent contractors; and, partners or co-owners.   Employees are further subdivided into “exempt” and “non-exempt” (non-exempt are entitled to meal and rest breaks, and paid overtime- this is a whole different topic).

 

In sum, please contact us for a review of your employment and ownership practices.  An ounce of prevention is really worth a pound of cure here!

 

California Trial Courts Are Still Chronically Underfunded, Which Delays the Public from Getting their Day in Court

Author: Wendy Hillger

Have you wondered why it takes so long to have your matter heard by a judge in California?

Unfortunately, the trial courts are not being properly funded.  As a result, there are reduced hours of operation, reduced services, and fewer workers to staff the courts.   California Supreme Court’s Justice Tani Cantil-Sakauye noted that chronic under-funding of the courts, “unfairly affects members of the public seeking their day in court.”

In 2008, the San Francisco Court’s budget was $90.5 million.   At the time, the Court employed nearly 600 non-judicial staff.  However,  because of the subsequent Recession, California’s trial courts saw severe budget reductions.

While the economy has improved, the funding has not been substantially restored.

In July, 2017, San Francisco trial courts saw their budget further reduced by 9% for the fiscal year 2017-2018.   The court has a budget deficit of over $5.2 million dollars.  Today, the Court’s budget amounts to just $51.7 million, with a staff of approximately 430.

To help save money, San Francisco announced that court staff are being furloughed without pay for one day a month.   In addition, the clerk’s office will close early on Fridays.  Alameda County also has experienced a similar shortfall and has been on reduced staff hours and services for a few years now.

The July 2, 2017 news release of the San Francisco court is linked here. Here  is the County of Alameda public notice from November, 2016.