Member Blog: The Drawbacks of Doing Your Own Payroll
The cannabis industry is unique in that there are many issues to consider when it comes to payroll. Doing payroll in-house can prove to be a complex endeavor and can have many drawbacks along the way. For instance, it can be difficult to keep up with ever-changing laws and regulations relating to payroll taxes, safety net contributions, and labor law compliance. Additionally, in-house payroll requires comprehensive knowledge to compute withholdings and deductions from employee wages, which can prove to be challenging.
Using a third-party payroll provider can help to improve accuracy and ease the burden of managing employee payroll. Third-party payroll providers can handle all the complexities involved in payroll, such as withholdings, benefit deductions, and payroll tax filings, freeing up valuable time and resources. Furthermore, a third-party payroll provider will be securely monitoring and tracking payroll changes, ensuring compliance with the latest payroll regulations.
In general, doing payroll in-house can be a complex endeavor that requires specialized knowledge and can be a resource-consuming task, but in a heavily regulated industry like cannabis this is especially true. For these reasons, cannabis businesses who switch to a third-party payroll provider often find the benefits far outweigh any obstacles.
Business owners have their minds set on ensuring the growth and stability of their businesses, figuring out modes to cut down costs along the line. Particularly, budding businesses in a bid to satisfy this widespread phenomenon, decide on DIY payroll – choosing to oversee the bookkeeping and accounting arm of their businesses. The common misconception is that payroll outsourcing options constitute a financial burden, contrariwise, the costs incurred from consistent errors (as is always the case) sum up to impact much more extensive financial repercussions on the company.
It is noteworthy that the convincing nature of DIY payroll also bears characteristic flaws which could pose serious threats to your business enterprise. Details on the drawbacks of doing your payroll are highlighted in this article.
Extreme Dependency
Seeing that you and/or another member of your workforce is solely charged with the responsibility in addition to other work-related assignments, chances are that your company finances will take a nosedive if you or the designated other is unavailable for any reason. This isn’t the same if you outsource, as payroll software and service providers are unfazed by such challenges.
Reduced Productivity
Settling financial statements and record keeping are time-consuming processes. Therefore, taking this up yourself would suggest that precious time and labor that could be spent on other vital aspects of the business will be diverted, influencing the work rate and eventual results.
In addition, payroll requires rapt attention to detail, precision, and patience. There is increased stress and the resultant frustration that could result could negatively impact productivity.
Heightened Susceptibility to Errors
Payroll is a complex system of procedures, requiring well-trained and skillful personnel. Experienced service providers are prone to errors and sometimes make mistakes, the chances, therefore, are that if you handle it yourself, you will make grave errors.
Miscalculating Profits
Inaccurate bookkeeping can lead to miscalculation of profit. Unpaid invoices would remain unnoticed, and the establishment suffers losses.
Missing Important Deadlines
The workload makes missing deadlines a high possibility. Poor handling of documents and vital information can result in missing payment dates, ignoring tax information and forgetting payment bonuses and overtime, to mention a few. This could result in noncompliance with government rules and your business might spend a large chunk satisfying fees and fines.
Cash Flow Problems
With inaccurate bookkeeping, there is no adequate knowledge of cash inflow and outflow. This common DIY payroll challenge could lead to payroll issues in the long run and set your business up for a downturn.
Apprehension by Regulatory Agencies
With DIY payroll, you may have inaccurate books, payment issues, consistent complaints, and noncompliance with state and federal laws. This would ignite the swift actions of government agencies like the Internal Revenue Service (IRS) and your business may suffer grave repercussions.
Indeed, the complications accompanying DIY payroll may outweigh the advantages proposed, hence the need to consider helpful payroll services to ease the burden and help your business focus.
Having an effective payroll system is crucial for Human Capital Management, an important ingredient for business growth and advancement.
Member Blog: Transportation Woes – The Unique Risks Cannabis Businesses Face and the Need for Specialized Insurance
In recent years, the cannabis industry has continued to grow with the legalization movement gaining momentum across the globe. As the market expands, so do the unique risks that cannabis businesses face, particularly when it comes to transportation. From theft and accidents to regulatory compliance, navigating the road to success in the cannabis industry requires adequate insurance coverage. In this blog post, I will explore the specific risks cannabis businesses encounter during transportation and the increasing importance of insurance products tailored to these challenges.
The Rising Threat of Theft
Protecting your valuable cargo from theft is a constant concern for cannabis businesses, especially during transportation. The high value of cannabis products makes them an attractive target for criminals. With high value products and cash amounts involved, the consequences can be devastating. That’s why it’s crucial for cannabis businesses to invest in insurance policies that specifically address theft risks during transportation. These policies can provide coverage for stolen goods, ensuring that businesses can recover from such losses and continue to thrive.
On the Road
Whether a retail delivery or wholesale distributor, transporting cannabis comes with its own set of challenges, particularly when it comes to employee safety, accidents and liability. Cannabis businesses must comply with strict regulations regarding transportation, including proper labeling, packaging, storing, tracking and secure transport methods. Additionally, accidents involving cannabis delivery vehicles can result in property damage, bodily injury, or even fatalities. Insurance products tailored to cannabis transportation risks can provide coverage for these eventualities, protecting businesses from costly lawsuits and providing peace of mind.
Staying Compliant
Navigating regulatory compliance with ever-changing regulations is a top priority and can be a challenge for any cannabis business. When it comes to transportation, the rules can be even more complex. Each jurisdiction has its own set of regulations governing cannabis transportation, such as licensing requirements, transport manifest requirements, and restrictions on the quantity of cannabis allowed per shipment. Failure to comply with these regulations can lead to significant penalties or even the suspension or loss of a cannabis license. Insurance products designed for the cannabis industry can help businesses stay compliant by providing coverage for regulatory fines and legal expenses.
Tailored Insurance
Meeting the unique needs of the cannabis industry and recognizing the unique risks faced by cannabis businesses, insurance providers have developed specialized products to address these challenges. Cannabis transport insurance policies offer elements of risk transfer strategies by providing comprehensive coverages, including theft, auto damage, liability and employee injury, while simultaneously meeting regulatory compliance issues. These tailored insurance solutions are essential for cannabis businesses, providing financial protection and ensuring business continuity in the face of inherent risk.
In general, the transportation of cannabis presents unique risks for businesses operating in the industry. From the constant threat of theft to accidents and regulatory compliance challenges, cannabis businesses must be prepared to face these risks head-on. Insurance products tailored to the specific needs of the cannabis industry offer crucial protection, allowing businesses to navigate the road to success with confidence. Investing in this insurance is not just a wise business decision — it is an essential step towards safeguarding the future of your cannabis business.
Committee Blog: Defining Legal Hemp – It Isn’t Always Simple Math
If you are a cannabis-related business, and are looking to accept credit cards, it is only possible to do so if you are selling a product that is defined as legal hemp by the 2018 Farm Bill.
The 2018 Farm Bill provides that:
“The term ‘hemp’ means the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.”
For the most part, it’s pretty cut-and-dry. Marijuana is a schedule 1 drug. Hemp is not. If your product has less than .3% Delta-9 on a dry weight basis, it’s not marijuana, it’s hemp. And since it’s hemp, it’s federally legal. And since it’s federally legal, it can be purchased with checks, credit cards, or debit cards. Hemp products are, reductively, as incendiary as a stick of butter.
Of course, there is the law and there is how acquiring banks—banks that offer merchant accounts—interpret the law. Across the U.S., there are hundreds of acquiring banks. Of those, only six or seven offer merchant accounts to hemp businesses.
That’s it, plus payment service provider Square.
The immediate problem for the few acquiring banks that have, laudably, said, “Yes,” to hemp is, “how do we distinguish products that are .3% Delta-9 or less (and therefore, yawningly legal) from those that are over .3% Delta-9 (and therefore, illegal as angel dust)?”
Enter the Certificate of Analysis, or COA, or lab report. While there is nothing in the law stating that COAs are required to prove that a product is within the federally legal limit, their role is sacrosanct during the boarding process. For every hemp-derived product, there must be a corresponding COA proving that the product being sold is hemp, and not marijuana.
Fortunately, there are labs across the nation. The U.S. Department of Agriculture website lists 85, as of May 2023. Manufacturers and businesses ship their samples to these labs. The labs run their tests and the COAs are issued.
Simple, right?
Not really.
There are no standards in place for these reports. No templates. Every laboratory’s COAs—while substantively providing the same information—look a little different. Furthermore, most bankers haven’t seen a lab report since high school chemistry, and you’ve got a recipe for confusion or misunderstanding (frequently both).
This COA, when it was initially presented to the bank, was rejected. To the underwriter, it was an open and shut case.
When the bank opened its door to offering acquiring to hemp businesses, its policy was to reject anything with greater than .3% Delta-9 by weight.
The top of this COA showed an instance of Delta 9 that read .189%. That passed muster, certainly. However, when he delved further into the analyte detail, he noted additional Delta-9 figures in excess of the .3% limit:
10.368 in the mg/unit cell
1.892 in the mg/g cell
It was not clear to the bank’s underwriter which of the two—per-unit or per-gram—corresponded with the by-weight percentage he was to be mindful of, but both were certainly over the .3% limit.
So, open and shut case: DECLINED
The salesperson that brought the merchant to this bank was surprised by the rejection. He hadn’t looked at the COAs very closely, but it seemed unlikely that this merchant had been selling products on her website that were in excess of .3% Delta-9.
Why? Because if the merchant had been selling products on its website in excess of .3% Delta-9, it would have been engaging in egregious felony drug trafficking. The salesperson doubted that was the case.
The salesperson did something he didn’t normally do: he took out his calculator.
He wanted to know why it read .189% Delta 9 at the top, but 10.368 in the analyte table. He noted the unit size at the bottom of the page was a gummy weighing 5.480g.
For the sake of simplicity, he multiplied that by 1000 to convert it to milligrams. That made it 5480 mg
Then he entered the onerous 10.368mg from the mg/unit figure in the analyte table and divided it by 5480mg. The resulting calculation netted the following total: .0018919.
Next, he converted it to a percent, and found that the result was .189%, which matched the figure at the top of the COA, exactly.
The next day, the salesperson presented the COA to the bank, with the markings and The Equation just as shown here.
It was an open and shut case: ACCEPTED
This situation is an example of why banks and credit unions unknowingly reject compliant hemp businesses from merchant processing solutions. As stated, a simple mathematical calculation was the difference between being accepted or rejected for necessary merchant processing services. Without proper merchant servicing not only are cannabis businesses’ profitability affected because they can only take cash; cash is also not as traceable or auditable as electronic transactions.
In general, businesses providing services to the cannabis industry are often challenged with disentangling legal risks with the benefits of their necessary services providing more transparency. With enhanced knowledge of the cannabis industry and its parameters, the cannabis industry will recognize a greater participation by all businesses necessary for the life of the industry thereby enhancing cannabis businesses’ likelihood to succeed but also enhancing the legitimacy and regulation of the industry.
Member Blog: Pre-Roll Market Industry Trends and Growth Potential
Having the ability to identify trends in the cannabis industry is vital for producers to build a successful brand, and the biggest trend in ther cannabis industry right now is pre-rolls. Growing at 12% YoY in the US and 38% YoY in Canada, pre-rolls are the fastest growing cannabis product in the world of legal cannabis, and it’s not close.
This trend could be chalked up to a sudden rise in popularity and as something that will decline once another hot trend appears; however, we believe that the rise of pre-rolls is more than just a flash in the pan. In fact, after looking over the sales data we received from Headset, we believe that pre-rolls will not only continue their growth, but they will become the bestselling cannabis products by 2030.
Here’s why!
Prices Fall, Sales Rise, Both Stabilize
Over the past few years, the wholesale price of flower has dropped dramatically in mature markets, and cheaper cannabis costs have allowed producers to source higher quality flower for their pre-rolls. Combined with the advances in pre-roll making machinery, quality pre-rolls are now able to be sold at a lower retail price, which has driven strong growth for the category.
As you can see from the graph, pre-roll sales have steadily increased as prices have fallen, but the last two years have seen both sales and prices begin to stabilize. The pre-roll segment that has seen the most growth during this time is infused pre-rolls. Customers love high THC percentages, and producers are happy to finally be able to offer it to them in an affordable pre-roll form.
Pre-Rolls have the Least Amount of Price Compression
It’s not just pre-roll prices that are falling. Prices are down across the board, but even though prices for all cannabis products declines over time, pre-rolls are showing the least amount of price compression. In other words, if you are in the business of selling cannabis, and you are worried about declining margins, pre-rolls are a category you should be expanding into to maintain and boost profitability.
You can also see from the graph that Canada has actually seen the average price of a pre-roll increase, but there is nuance to this data. This does not mean that pre-rolls are getting more expensive for Canadian consumers. This data shows just how popular infused pre-rolls are becoming. They are becoming so popular that people are choosing to buy them over regular, more affordable pre-rolls, and that change in buying habits has increased the average sales price for pre-rolls.
Pre-Roll Multi-Packs
Another interesting trend we see in the sales data is that pre-roll multi-packs have become extremely popular. In 2018, multi-packs of pre-rolls only made up 27.7% of the market in Oregon, Washington, and Colorado. By 2023, multi-packs make up 47.62% of the market—representing a growth of about 20% over 5 years. Also, Since 2021, we have seen an almost 400% growth in multi-packs that have a volume of 2 or 5 grams as well as steady growth across most other sizes.
Buying pre-rolls by the pack is a lot more convenient for consumers. It means not making a special trip to the dispensary every time a pre-roll is wanted. The rise in their popularity is a sign that consumers are investing in pre-rolls as a staple in their cannabis routine. Because they know they will continue to enjoy pre-rolls, they buy multiples at a time for convenience, and it’s this kind of product loyalty that moves a product from a trend into something more.
Wallet Share by Age
Another interesting thing about pre-rolls is that, when it comes to wallet share, they are the most consistent product segment across all age groups. Other products show a significant increase or decrease in popularity with each new generation; however, pre-rolls steadily hover between 12.8% and 14.5% in each group and even show a slight increase with the younger generations.
It’s also important to note the decline of flower with younger generations. Why this is significant is because, at their core, pre-rolls are a flower product, and they are not following the same decline in sales. They distinguish themselves from loose flower by providing consumers a way to enjoy their flower without extra paraphernalia. In this way, we think pre-rolls could start to eat into the flower market, as they better meet the consumption needs of flower customers.
Pre-Roll Attachment Rates
Another big reason why pre-rolls will remain a dominant product segment in the future is that they are the perfect add-on item at the point of sale. The data shows that, when a person walks into a dispensary, they will add-on a pre-roll 15.5% to 23.3% of the time. In fact, in all product segments, pre-rolls either have the highest attachment rate or are within a single percentage point of the leader.
In other words, no matter what a customer is interested in purchasing, it doesn’t take a lot of convincing to get them to add on a pre-roll. They’re reasonably priced, made with quality materials, and incredibly convenient. Whether they want to consume it right away or want to save it for later, pre-rolls have become something flower lovers like to have on-hand for whenever, and that makes it more than a trend. That makes it a staple.
Convenience Impacting Pre-Roll Purchasing
Cannabis is starting to make its way into mainstream culture. You can’t buy it at your local grocery store, like you can buy wine or cigarettes, but it’s out there. The legalization of cannabis has opened the door to innovation in the cannabis industry, and those innovations are starting to have an impact on everything—especially consumption.
Flower needs paraphernalia to be consumed, and, if you are just trying to enjoy cannabis, sometimes you just don’t want the hassle. Pre-Rolls are unique in that they offer the consumer flower as well as a way to consume it, so it’s not too much a leap to think that pre-roll could keep expanding and start eating into flower sales.
In this way, cannabis can be compared to tobacco. Even though people can buy loose tobacco and roll their own cigarettes or use a pipe, most people are buying pre-rolled products. Even though the tobacco quality, smoking experience, and price point can be better when you buy loose tobacco, most people are choosing the convenient option. It shouldn’t surprise us that cannabis starting to fall into this pattern as the market matures.
Final Thoughts on The Pre-Roll Market
The data lets us know that pre-rolls are doing amazing things when it comes to sales, but it is also giving us hints as to trends in consumption methods. Pre-rolls are a flower product, and it’s clear from the data that flower consumers are buying into the convenience of pre-rolls. This is more than just a trend, but a shift in the preferences around flower consumption. Because of this shift, we can see pre-rolls taking on a more prominent role as the cannabis industry continues its expansion.
For a more in-depth look at the pre-roll industry, be sure to check out the State of the Pre-Roll White Paper, and, if you have any questions, feel free to reach out to the Pre-Roll Experts at Custom Cones USA.
Committee Blog: Optimizing the Cannabis Dispensary Experience – An In-depth Look at Terpenes, Cannabinoids, and THC for Superior Customer Service
The cannabis industry has experienced rapid growth in recent years, with more and more states legalizing its use for medical and recreational purposes. As a result, cannabis dispensaries are becoming increasingly popular, with many people visiting them for the first time. For dispensary owners, managers, and budtenders, it’s essential to provide a positive customer experience to build brand loyalty and attract repeat business. This blog will discuss the importance of focusing on the customer experience at cannabis dispensaries and how understanding terpenes, cannabinoids, and THC percentages can improve the overall experience for both new and experienced users.
Understanding the Customer Experience
What makes a great customer experience at a cannabis dispensary? A positive experience can be characterized by:
Knowledgeable Staff:
Budtenders and other staff members should be well-trained and able to provide accurate and easily digestible information on various cannabis products, including their effects and appropriate dosages.
Welcoming Atmosphere:
Dispensaries should be clean, well-organized, and aesthetically pleasing, making customers feel comfortable and at ease during their visit.
Product Selection:
A wide variety of high-quality cannabis products should be available to cater to the diverse preferences and needs of customers.
Personalized Recommendations:
Budtenders should be able to make personalized recommendations based on the customer’s preferences, desired effects, and level of experience with cannabis.
Terpenes, Cannabinoids, and THC: Key Components of Cannabis
To provide an exceptional customer experience, it’s essential for dispensary staff to understand the key components of cannabis, including terpenes, cannabinoids, and THC percentages. These components play a significant role in the overall effects of cannabis and can help staff make tailored recommendations for customers.
Terpenes:
Terpenes are aromatic compounds found in many plants, including cannabis. They give each strain its unique aroma and taste, and they can also have therapeutic effects. There are over 100 different terpenes in cannabis, with some of the most common ones being myrcene, limonene, and pinene. Understanding the terpene profile of a specific strain can help staff recommend products based on the desired flavor and aroma, as well as the potential therapeutic benefits.
Cannabinoids:
Cannabinoids are the chemical compounds found in cannabis that interact with the body’s endocannabinoid system, producing various effects. Many Cannabis products advertise “full-spectrum” CBD, meaning that the product not only contains CBD, but can also contain the other cannabinoids as well as terpenes, essential oils, and up to 0.3% THC. There are over 100 different cannabinoids in cannabis, with THC (tetrahydrocannabinol) and CBD (cannabidiol) being the most well-known. THC is responsible for the psychoactive effects of cannabis, while CBD has various therapeutic effects without causing a “high.” Dispensary staff should be familiar with the different cannabinoids and their effects to help customers choose products based on their desired experience.
THC Percentages:
The THC percentage of a cannabis product indicates the concentration of THC, which largely determines the psychoactive effects of the product. Generally, higher THC percentages lead to more potent effects. However, it’s important to note that the overall effects of a cannabis product are influenced by other factors, such as the terpene profile and the presence of other cannabinoids. Dispensary staff should be able to explain the significance of THC percentages and guide customers in selecting products with appropriate potency levels.
Educating Customers and Tailoring Recommendations
Dispensary staff should prioritize educating customers about terpenes, cannabinoids, and THC percentages to help them make informed decisions about their purchases. By understanding these components, customers can better tailor their cannabis experience to their preferences and needs.
For example, a customer looking for a relaxing experience may be interested in a strain high in myrcene, a terpene known for its sedative and relaxing effects. In contrast, someone seeking a more uplifting and energizing experience might prefer a strain with a higher concentration of limonene, which is associated with elevated mood and increased energy. Additionally, customers with little to no experience with cannabis may prefer strains with lower THC percentages to avoid overwhelming psychoactive effects.
When assisting customers, dispensary staff should ask about their preferences, desired effects, and experience level with cannabis. Based on this information, they can recommend strains and products that align with the customer’s goals while considering the terpene profile, cannabinoid content, and THC percentage. This personalized approach can help customers feel more confident in their purchases and lead to a more satisfying experience.
For HR Professionals: Training and Development
To ensure that dispensary staff can effectively educate customers and provide tailored recommendations, it’s crucial for HR professionals to invest in comprehensive training and development programs. Training should cover a wide range of topics, including:
Cannabis Fundamentals:
Staff should have a solid understanding of cannabis basics, such as the differences between indica, sativa, and hybrid strains, and the various forms of cannabis product, methods of ingestion and their varying timing of effects (e.g., flower, edibles, concentrates, tinctures, and topicals, vaping, eating, and drinking).
Terpenes, Cannabinoids, and THC:
As discussed earlier, staff should be well-versed in the role of terpenes, cannabinoids, and THC percentages in determining the effects of cannabis products.
Customer Service Skills:
Staff should be trained in effective communication, active listening, and empathy to better understand and serve their customers.
Compliance and Regulations:
Dispensary staff should be knowledgeable about state and local regulations regarding cannabis sales, as well as safety protocols and best practices for handling cannabis products.
By providing thorough training and development opportunities, HR professionals can ensure that dispensary staff are equipped to deliver an exceptional customer experience.
The Role of Technology in Enhancing the Customer Experience
As the cannabis industry continues to grow and evolve, technology is playing an increasingly important role in enhancing the customer experience at dispensaries. In this section, we’ll explore several innovative technologies and tools that can help dispensary owners, managers, and staff provide an even better experience for their customers.
Point-of-Sale (POS) Systems:
Modern POS systems designed specifically for cannabis dispensaries can streamline the sales process and improve the customer experience. These systems can track customer preferences, manage inventory, calculate taxes, and ensure compliance with state and local regulations. By investing in a robust POS system, dispensaries can provide a more efficient and personalized service for their customers.
Digital Menus:
Instead of relying on printed menus that can quickly become outdated, dispensaries can use digital menus to display their product offerings. These menus can be easily updated to reflect current inventory, and they can also include detailed information about each product, such as terpene profiles, cannabinoid content, and THC percentages. By providing customers with easy access to this information, digital menus can help them make more informed decisions about their purchases.
Online Resources and Mobile Apps:
Dispensaries can enhance the customer experience by offering online resources and mobile apps that provide valuable information and tools related to cannabis consumption. For example, they can develop educational content about terpenes, cannabinoids, and THC percentages or create interactive tools that help customers determine their ideal dosage based on their preferences and experience level. By providing customers with access to these resources, dispensaries can support them in their cannabis journey and help them make more informed decisions.
Customer Engagement and Community Building
Another crucial aspect of providing an exceptional customer experience at cannabis dispensaries is fostering a sense of community and engagement among customers.
Events:
Hosting events such as product launches, tastings, and guest speaker sessions can provide customers with an opportunity to learn more about cannabis, sample new products, and connect with other like-minded individuals. These events can also help establish a dispensary as a trusted source of information and a hub for the local cannabis community.
Educational Workshops:
Dispensaries can offer workshops that focus on various aspects of cannabis, such as understanding terpenes, cannabinoids, and THC percentages, cooking with cannabis, or cultivating cannabis at home. These workshops can help customers gain a deeper understanding of cannabis and its various uses, ultimately improving their overall experience.
Social Media:
Actively engaging with customers on social media platforms can help dispensaries stay connected with their audience, provide real-time updates on products and promotions, and gather valuable feedback. Dispensaries can also use social media to share educational content, answer customer questions, and participate in industry-related conversations.
Loyalty Programs:
Dispensaries can implement loyalty programs that reward customers for their repeat business, encouraging them to return and further engage with the dispensary. Loyalty programs can include discounts, exclusive promotions, or early access to new products, and can be an effective way to strengthen the customer-dispensary relationship.
Focusing on the customer experience at cannabis dispensaries is crucial for building brand loyalty, attracting repeat business, and maintaining a competitive edge in the growing cannabis industry. Dispensary owners, managers, and budtenders must prioritize educating customers about terpenes, cannabinoids, and THC percentages to help them make informed decisions and tailor their cannabis experience to their preferences and needs. HR professionals play a key role in ensuring that staff receive comprehensive training and development, enabling them to provide exceptional service and create a positive customer experience. By investing in the customer experience, dispensaries can set themselves apart and thrive in the competitive cannabis market.
Member Blog: What Is New Hire Reporting and Why Is It Critical for Cannabis Companies
Cannabis is amongst the fastest growing industries in America, and it is also one of the most inexperienced. From the individual employee to the entire organization, the lack of commercial and regulatory knowledge can be a real burden for those facing it.
As an employer, one of the most common regulations you are responsible for is the reporting of any new hires to your state, or federal, governing body. Although new hire reporting can become quite recurrent, it is also critical to your business operations.
What is New Hire Reporting?
New Hire reporting is a process by which you, as an employer, report information on newly hired and rehired employees to a designated state agency shortly after the date of hire. As an employer, you play a key role in this important program by reporting all your newly hired employees to your state.
The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996, known as welfare reform, requires all employers to report certain information on their newly hired employees to a designated state agency.
Who is considered a newly hired employee?
The law defines a “newly hired employee” as an employee who has not previously been employed by the employer; or was previously employed by the employer but has been separated from such prior employment and rehired.
Is the reporting process difficult?
The majority of the information you submit is already collected when your employee completes a W4 form. Still, the reporting process is an additional requirement, which may possibly add time and expense to your company’s operations. To ease the process, states are working together with employers, offering them a variety of reporting methods.
New Hire reporting is one of the many services we offer at Tesseon to reduce your burden and help you to stay in compliance.
Does New Hire reporting benefit employers?
A potential benefit to employers is the reduction and prevention of fraudulent unemployment and workers’ compensation payments. Timely receipt of New Hire data allows each state to cross-match this data against its active workers’ compensation and unemployment insurance claimant files to either stop or recover erroneous payments. States have saved millions of dollars of erroneous unemployment insurance payments because of these cross-matches.
What is done with the New Hire information?
States match New Hire reports against their child support records to locate parents, establish a child support order, or enforce an existing order. In addition to matching within a state, states transmit the New Hire reports to the National Directory of New Hires.
State agencies operating employment security (unemployment insurance) and workers’ compensation programs have access to their state New Hire information to detect and prevent erroneous benefit payments.
In addition, each state can conduct matches between its own New Hire database and other state programs to prevent unlawful or erroneous receipt of public assistance, including welfare, food stamps and Medicaid payments.
How is the data safeguarded after it is submitted?
Security and privacy of New Hire data are important issues for all those involved in this nationwide program. Federal law requires all states to establish safeguards for confidential information handled by the state agency.
All state data is transmitted over secure and dedicated lines to the National Directory of New Hire (NDNH). Federal law also requires that the Secretary of Health and Human Services (HHS) establish and implement safeguards to protect the integrity and security of information in the NDNH, and restrict access to and use of the information to authorized persons and for authorized purposes.
Where and how do companies send New Hire information?
New Hire reports should be sent to the State Directory of New Hire in the state where the employee works. Federal law identifies three methods for submitting New Hire information: first class mail, magnetic tapes, or electronically. For employer convenience, states offer additional options such as fax, email, phone, and website transmissions. Your state New Hire contact can provide you with instructions on where and how to send New Hire information.
Federal employers report New Hire data directly to the National Directory of New Hire.
What information must an employer report?
Federal law requires you to collect and report these seven data elements:
Employee’s name
Employee’s address
Social Security number
Date of hire (the date the employee first performs services for pay)
Employer’s name
Employer’s address
Federal Employer Identification number (FEIN)
Some states require additional data, please check your state’s specific reporting requirements.
Are there penalties for failing to report New Hires?
States have the option of imposing civil monetary penalties for noncompliance. Federal law mandates that if a state chooses to impose a penalty on employers for failure to report, the fine may not exceed $25 per newly hired employee. If there is a conspiracy between the employer and employee not to report, that penalty may not exceed $500 per newly hired employee. States may also impose non-monetary civil penalties under state law for noncompliance.
Is New Hire reporting required for independent contractors?
Some states do require the reporting of independent contractors. However, federal law does not require it. Contact the person identified on the State New Hire Reporting Contacts and Program Information matrix for state-specific requirements.
How soon must I submit a report after hiring someone?
Federal law mandates that New Hires be reported within 20 days of the date of hire. However, states are given the option of establishing reporting time frames that may be shorter than 20 days. You must adhere to the reporting time frame of the state to which you report. Be sure to check with your state New Hire contact to learn your state’s requirements.
What form is used to send New Hire reports?
Reports must be made either on a copy of the W4 form or, at your option, an equivalent form developed by you. Some states have developed an alternate form for reporting, but its use is optional.
Options for multistate employers to report new hires?
If you are a multistate employer, you have two reporting options:
Report newly hired employees to the states where they work, or
Select one state where your employees work and report all your new hires to the selected state.
If you choose to report all new employees to one state (option B), you must:
Register with HHS as a multistate employer
Designate the state that you will report
Submit your new hires electronically or by magnetic tape to the state you have chosen, no more than twice a month (12 to 16 days apart)
There are two ways to register as a multistate employer, either online or by downloading and filling out the designated paper form (PDF).
Once you complete the registration as a multistate employer, report employees to the state that you have chosen.
Need advice for your business?
At Tesseon we understand that your organization may need help getting things done. That is why we offer stand-alone services for areas that can be a challenge to any business. With our in-house expertise and award-winning support we can help you handle any business challenge that comes your way.
Member Blog: Building Trust for Your Brand in a Distrustful World
by Gary Paulin, VP of Sales and Client Services at Lightning Labels
“Trust,” “like,” and “respect” are three time-tested criteria for deciding everything from friendships to business relationships. Despite all the trendy buzzwords and expensive technology-driven “customer service” programs that purport to increase sales revenues, most buying decisions revolve around trusting, liking, and respecting the company.
It’s that basic. And that human. Too many companies are trying to supplement—or even supplant—the value of human interaction with the latest shiny technology tools. People still matter, in some ways more than ever before in an increasingly impersonal world. Many consumers crave top-notch customer experiences shaped by people doing right by the customer in every way possible.
Key to success is achieving a balance between human and technology interaction where the two support each other. While technology can be a valuable support system in the relationship-building process, it isn’t the solution in and of itself.
For example, technology that automates perfunctory pieces of the customer journey can free up more human resources for personal interactions. One primary example is a call center where much of the intake process is automated, getting more people more quickly into the queue to talk to someone. (In smaller companies, this truly can mean the difference between employees filling much of their time with routine, non-interactive tasks and actually talking with consumers—where human participation is most valuable.)
Technology itself drives—or drives away—trust, likeability, and respect
A report released by Ernst & Young (EY) notes that the technology itself adds to or detracts from customer engagement. In part, it noted: “This isn’t just a question of choosing the right technologies…It’s crucial that digital innovation protects and nurtures the relationship with the consumer. Three things matter here: trust, respect and value. Can people trust you to use technology responsibly and safely? Do they feel you are using technology to help them, or to take advantage of them? Is the value they get from an innovation fair, considering how much your business benefits?”
The EY report continues, “Consumers remain wary about the impact of new technologies…They can become highly reliant on a tool, while also worrying about its risks to their mental and financial wellbeing. For example, people take the constant connectivity of their mobile devices for granted, yet they increasingly want to turn off alerts and reminders because they find that persistent connectivity overwhelming.”
What are key takeaways for cannabis industry purveyors?
Assess what you’re doing well and not so well in the trust, like, and respect categories. If you receive substantial reviews through credible non-curated platforms such as Google, see what people are saying about customer service, product quality, technology interactions, et al. Ask questions when customers are on-site or on the phone to help assess what they feel is working well and what needs improvement. Get them live and in the moment for more authentic information. If you must follow the online survey trend, use responses as part of the total picture. Make sure it doesn’t take respondents too much time, and ask thoughtful, probing questions that address the areas of trust, likeability, and respect.
Synthesize reviews, discussions, and survey results to chart a course for better outcomes. Companies can be too linear. For example, they examine only survey results and base future enhancements on those findings. Get input from multiple sources, then synthesize findings and feedback to chart a course for improvement. It’s not unlike the job of a good reporter. One source provides information. Then, the reporter attempts to verify with at least a couple other reliable sources before coming to conclusions. This is a case where being a good reporter will lead to better outcomes.
It’s way past time to address the tried-and-true cornerstones of how best to build and maintain solid relationships. And understand that enduring solutions come from multiple sources, with technology playing an appropriate support—not be-all, end-all—role.
VIDEO: The Bright Future Of The Cannabis Industry
The future is bright for the cannabis industry!
Let’s build it together.
Despite the many struggles our industry faces due to federal prohibition, there’s strong optimism for the direction we are going into the future.
Hear more from these NCIA Members about the amazing industry we are building together:
For even more inspiration, download this NCIA Policy Council Report – “The New Politics of Marijuana: A Winning Opportunity For Either Party” – to learn more about the significant voter support for marijuana policy reform and the legal cannabis industry through thoughtful examination of recent public opinion polling and electoral wins.
Plus, check out our event calendar and get your team registered!
Not yet a member of NCIA?
Stay up to date about the rapidly evolving landscape by networking with nearly 2,000 member companies who are part of a movement to build a responsible industry.
Survey: Employee Engagement in the Cannabis Industry
Needle Consultants, LLC, presents the Cannabis Industry Employee Engagement Survey
With thousands of employees working in the cannabis industry, the industry has become a significant employer in the states that have legalized cannabis production, processing, and consumption. Ensuring that the industry is creating a satisfying work environment and a fulfilled workforce is key to attracting and retaining top talent and provides certainty to business planning.
Workers today not only seek this sense of purpose within their places of work, but have also been known to accept less compensation, if fulfilled in other ways, offered “nontraditional” benefits, and/or opportunities to engage in authentic community activities.
Marc Ross, Chief Instigator at Needle Consultants
As the leading cannabis industry organization, NCIA desires to see our member businesses thrive, with tens of thousands of satisfied and fulfilled workers, eager to participate and add their talent and passion to our work. We also seek to be an industry that improves the lives of not only our members’ patients, clients, and customers, but their communities.
“I’m really excited to have this opportunity to do a deep dive into employee engagement as it pertains to the cannabis industry” says Marc Ross, Chief Instigator at Needle Consultants, LLC. “It is my belief that by gathering a baseline of this data and identifying opportunities for improvement, we’ll be able to help create a healthier and more satisfying environment for the industry’s workers, which in turn, will elevate the industry overall.”
· Overall Worker Satisfaction
· Worker Needs and Desires around Benefits
· Worker Desires around Community Engagement opportunities
Who should take this survey?
Employees of direct-to-plant cannabis companies, including cultivation, retail, and processing and manufacturing from MIPs and concentrate companies, with a heavy focus on Colorado-based companies.
The survey is anonymous.
Cannabis companies that self-report participation of over 90% will receive recognition by NCIA in the future report. One lucky participant will even win a complimentary Seed To Sale Show 2018 registration.
How long does it take to complete the survey?
The survey takes approximately 5 to 10 minutes to complete.
How long is the survey open? The survey will be open for collecting anonymous responses between now and December 1, 2017.
We believe the results of this survey will provide immeasurable value as companies within our industry seek to build happy and fulfilling work environments. The results will be analyzed and compiled into a comprehensive report which will be shared with the cannabis industry at large.
