MONTPELIER — Business owners, including those operating in the nascent cannabis industry, are subject to labor laws.
A peer networking session hosted by the Vermont Cannabis Control Board on Aug. 19 was dedicated to the subject.
"[A]s a business owner, if you have an employee, then you're required to pay contributions to the unemployment insurance trust fund," said Jason Adler, staff attorney with the Vermont Department of Labor. "And your contribution rate is based on your payroll and the number of employees you have, among other factors."
All three parts of a test need to be met in order for a person to be considered what Adler described as "a bona fide independent contractor." They involve looking at whether someone is paid per job or to show up to work, if they're involved in a key component of the business, and if they are relying on the employment to support themselves or have an independently established business.
"For cannabis, if you were having somebody work in a storefront selling retail products, that's probably the key component of a storefront," Adler said. "But if you have somebody who comes in, let's say, and they're just cleaning the building after hours or they're washing windows for you, that's not really the key component of your business so that's probably the type of person that would obviously be considered an independent contractor and not an employee."
To see if someone is independently established, Adler said, "we're looking at things like evidence that they have their own business and that they're running their own business, and not just that they're relying on the employer."
A limited liability corporation isn't considered an employee but "a separate legal entity," Adler said, "so receiving services from an LLC is never going to create an employee and employer relationship. It's always going to be a valid independent contractor relationship."
With a change in law this year, the Department of Labor is no longer performing any enforcement work related to questions about misclassification regarding wages and payment of wages. Adler said Vermont's attorney general will now be handling that aspect.
Enforcement on contributing to unemployment insurance "still sits with the Department of Labor," Adler said. He noted that workers need to be properly classified to avoid administrative penalties.
Naira Hagopian, wage and hour investigator at the department, said the minimum wage in Vermont is $14.01 per hour. Overtime is calculated on weekly basis.
"The best policy for employers is to have a system where employees cannot enter the building before the works start and the employee leaves the building if employer is not ready to pay overtime and those hours are not authorized," Hagopian said. "But if employees are permitted to stay in the building, it's very difficult to convince that the employee did not perform any work, even if it was just reading a handbook or something that's work related."
Employers must keep and preserve certain records, including hours worked and wages paid to each employee. These records can be stored electronically or with hard copies.
Vermont requires employers to make earned sick time available to employees working at least 18 hours a week, Adler said.
Melissa Anderson, deputy licensing director at the CCB, said new state law eliminates the temporary employee ID card for cannabis businesses "except in extenuating circumstances."
"So temporary employee ID cards were necessary at the inception of the adult use program to serve new applicants," she said. "But today, the two step ID card process isn't necessary anymore, so those planning to apply for an employee ID card can usually obtain the background check results that are required for the submission within a few days."
Andersen said each employee should obtain their own ID card, which must be renewed each year. Background checks are due every two years unless requested earlier.
"Establishments should not complete applications on behalf of the employees," she said.
Andersen said the card belongs to the individual employee and "travels with them, if and when, their employment comes to an end with you."
"ID card holders must notify the board immediately if charged with a criminal act in any jurisdiction," she said.