Payroll might be considered one of the most laborious tasks HR takes on, in addition to complying with the many regulations that come with managing a business in the cannabis industry. You are responsible for overseeing a mostly hourly workforce comprised of diverse individuals in an incredibly competitive talent market. Mitigating risk, saving time, and developing a trusted relationship with your workforce are important aspects to consider when approaching your payroll process.
Whether you manage your own payroll, or work with a partner like Wurk, there are simple steps you can take to ensure the process runs smoothly so you can consistently support your people.
The calendar is your best friend
Maintaining an accurate calendar of important dates and deadlines is crucial to ensuring your operation delivers payroll, taxes and other required information on time.
Understand your company tax liabilities (federal withholding, medical, social security) and deposit schedule based on these liabilities. Know your tax filing periods and ensure you share any changes communicated by the IRS to your payroll processor, if applicable. Plan ahead for all bank holidays as well as paydays that fall on a holiday, especially if it lands on a Monday or Friday.
Accurate data is essential
It’s no secret that the cannabis industry has a somewhat capricious workforce, and while you may do everything in your power to retain talent, change can happen fast. Managing accurate employee information through these transitions is vital.
When hiring employees, don’t wait a week to fill out the necessary paperwork. If the unfortunate event occurs where that person leaves within a few days of being hired and you don’t have their address, social security number, I-9 or a W4, how are you going to legally pay them for their time?
Equally as important as documenting information during onboarding, make sure you frequently obtain employee address and name changes and communicate these updates to your payroll partner. Similarly, don’t ignore warnings in your payroll system related to address locations. You could face fines and unnecessary time management issues if your state notices location variances between your company and employee’s address.
Responsible record management can save you
Duplicating and organizing historical records should be a must-do in your business operations – especially if you are running an all cash marijuana business. Be sure to keep payroll journals (check registers, payroll histories) that include check numbers, gross amounts, etc. for a minimum of four years.
File copies of all federal and state deposits for tax liabilities through a trusted system like Wurk. Be sure to regularly download and print documentation so you have it ready for audits. Taking this step will be a huge relief in the event that you potentially lose access to your system.
Enact best practices for employee management
Avoid costly mistakes or miscommunications with your workforce by implementing payroll best practices.
- Similar to filing new hire paperwork on time, ensure you have a process in place to terminate employees quickly.
- Perform a detailed review of holiday pay, vacation/sick time before submitting your payroll, every time.
- Educate your employees and empower them to come to you with any concerns related to state and local tax deductions in their paycheck.
Have other best practices in your payroll management process that you’d like to share? We’d love to hear from you! Contact our team.