Cannabis producers make up the largest number of Oregon industry licensees. As of the Oregon Liquor Control Commission’s (OLCC) February 15, 2018 report, there are 922 licensed producers and approximately 1100 producer licenses awaiting approval. In comparison, the next largest license category is retail establishments, with a total of 527 approved licenses and approximately 200 awaiting approval. Clearly, licensed marijuana farms are leading the pack.
Cannabis farm workers are sometimes subject to additional statutes, rules, and regulations that do not apply to non-farm workers. For this reason, if you are an Oregon marijuana producer, it is important to be familiar with agricultural rules as well as the OLCC marijuana rules. One especially important area to be aware of is hourly payments for cannabis farm workers. Underpaying farm workers can have disastrous consequences, and overpaying workers simply because you do not understand the rules is a poor business model.
Certain cannabis farm workers are exempt from overtime payment requirements. For example, employees engaged in agricultural work 100 percent of the workweek are exempt from overtime pay requirements. Agricultural work is broadly defined to include farming in all its branches, including, but not limited to the cultivation and tillage of soil, the production cultivation, growing and harvesting of any agricultural or horticultural commodities and any practices performed by a farm or on a farm as an incident to or in conjunction with farming operations. If an employee handles or otherwise works on tasks that are not associated with farming, that employee must be paid over time for any hours worked in excess of 40.
Oregon employers can sometimes also be exempt from paying minimum wage to agriculture employees. Both federal and state laws provide minimum wage exemptions for small farms. A cannabis producer employer must ensure the cannabis farm employee is exempt under both federal and state minimum wage requirements to avoid liability.
Under the federal Fair Labor Standards Act, agricultural employers do not have to pay minimum wage to employees if the employer did not employ more than 500 man-days of agricultural labor in any calendar quarter of the preceding year. A “man-day” is defined as any day during which and employee performs agricultural labor for at least one hour. So for example, if you employed two cannabis farm workers on October 20, 2017 to cultivate plants and each worked a total of 4 hours, that is equivalent to two man-days.
In Oregon, employers do not have to pay minimum wage to agriculture employees if the employer did not employ more than 500 piece-rate work days in any calendar quarter in the preceding year. Piece-rate work is defined as pay calculated on the basis of the quantity of crop harvested. Again, the employee must be exempt under both federal and Oregon minimum wage requirements here.
It is important to accurately classify your cannabis farm workers. Violation of wage and hour laws can come with hefty fines. If you are unsure if your workers are exempt from minimum wage or overtime requirements, have an attorney or other qualified individual review your pay practices, and make sure your employee handbook is in line with current federal, state and local law.