Employee Handbooks: A Guide for Cannabis Employers

As a cannabis business owner, here’s what you need to know to set yourself up for success in the world of employee handbooks.

HR1 By Sergey Nivens ss 472171402 mg magazine
HR1 By Sergey Nivens ss 472171402 mg magazine

For any business just getting started with employment policies and procedures, the prospect of drafting an employee handbook can be intimidating. Horror stories about 200-page handbooks abound, alongside tales of handbooks that have done more harm than good for their well-intentioned authors. When you have an array of state and local regulations—not to mention new licensing frameworks—to contend with, employees to hire, and a young and competitive market to contend with, you might ask yourself whether handbooks are more trouble than they’re worth.

In a word, no. When done right, employee handbooks are a critical tool in providing structure for employees and protection for businesses. When done wrong—or not at all—an employee handbook can be a source of frustration for employees and a source of liability for you. As a cannabis business owner, here’s what you need to know to set yourself up for success in the world of employee handbooks.

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How your employee handbook helps
Sets up your workplace culture
For starters, an employee handbook is a written reflection of your priorities. Many employee handbooks now begin with an “About Our Company” section that tells employees how the company got its start and describes the company philosophy. A statement of intent like this can be particularly impactful if you’re a new business with an emerging workplace culture. Employees want to know what kind of organization they’re joining. Your employee handbook is one of your first opportunities to tell them.

Educates employees
In addition to educating employees about workplace culture, employee handbooks educate your staff about workplace policies. If an employee has a question about whether they can take a leave of absence for a family member’s illness or how much vacation time they earn during their second year with the company, those questions should be answered in the employee handbook.

Employee handbooks also set standards for conduct. Are there restrictions on what information employees can transmit outside the company? What are your expectations for attendance and punctuality? Will you have a zero-tolerance policy for drugs and alcohol at work, or a responsible-use policy? Studies show employees appreciate clear expectations from their employers and are more likely to follow rules they clearly understand. From a behavioral standpoint, your handbook provides employees with information about what conduct will not be tolerated at work.

Educates managers and business owners
The employee handbook also can answer questions for you. A well-drafted employee handbook will tell you, the business owner, what leaves of absence you’re required to give employees and under what circumstances. It also will remind you what the terms of your vacation policy are. It will outline the steps you need to follow to investigate a complaint of sexual harassment in the workplace.

As you grow in size, remember you won’t be the only person enforcing workplace rules and answering employee questions. Eventually, you’ll likely hire managers to whom you will delegate some of that responsibility. When managers are fielding questions from employees, they also need a resource to track down the rules they’re charged with enforcing.

Facilitates consistency
Having policies and knowing what those policies say is crucial for you to execute one of the most effective ways of minimizing risk in employment matters: treating employees consistently. To be sure, treating employees differently for similar conduct is one of the fastest ways to buy a discrimination lawsuit. By way of example, say your manager allows Adam, a male employee, to show up late to work without any consequences. However, the same manager reprimands Bettie, a female employee who took a leave of absence last year, for the same conduct. Giving your managers guidelines (e.g., “all employees are expected to arrive at work on time or face disciplinary action”) will facilitate consistent treatment and minimize risk.

Requirements for your employee handbook
So, you’ve decided to put together an employee handbook. The most integral policies for your handbook will depend on your priorities and the laws in your state. Nevertheless, the following policies tend to be important across the board.

Drugs and alcohol
As more states legalize recreational and medicinal cannabis, more employers are reconsidering their zero-tolerance drug and alcohol policy. Many employers recently have considered whether there is good reason to treat cannabis differently from alcohol. If employees are responsibly using alcohol or cannabis off-duty in a way that doesn’t impact their work, what’s the harm?

Whether you stand firm in a zero-tolerance policy or adopt a responsible-use policy, the standards for employees who have drugs or alcohol in their system at work need to be clear. The circumstances under which employees can be tested for drugs or alcohol similarly should be spelled out in a way that is compliant with your state’s law. The place to set forth those standards? Your employee handbook.

Non-discrimination and harassment
Many states, like California, require employers to maintain policies prohibiting harassment and explaining how employees can report harassment. However, even where anti-harassment and -discrimination policies aren’t required by law, they are two of the most important policies in your employee handbook. Title VII of the federal Civil Rights Act requires all employment decisions be free of discrimination. To that end, your commitment to an inclusive workplace should be documented in writing.

Moreover, particularly in the #MeToo era, employees are justifiably unwilling to tolerate harassment or other inappropriate conduct at work. These claims can result in huge liability and significant negative publicity for your business. To mitigate the risk of an expensive and embarrassing harassment lawsuit, develop a policy that encourages employees to raise workplace issues with their manager or the human resources department and provides clear instructions for how those complaints are handled (no retaliation!).

At-will statement
Numerous states afford employers and employees a presumption that employment is at-will. This means either employer or employee may terminate the employment at any time, with or without cause or prior notice. Even so, employers should reinforce the presumption of at-will employment with an at-will policy in their handbook. An at-will policy also ensures employees understand the nature of their relationship with the company.

Timekeeping policies
Wage and hour lawsuits are on the rise and pose a particularly high risk of occurring in the form of a class action. For example, California requires employers to provide employees with the opportunity to take a meal period before the end of their fifth hour of work. A written policy permitting meal periods after the sixth hour of work, or no written policy telling employees about their meal period rights, is an easy target for a plaintiff’s attorney who comes across your employee handbook. Include lawful policies on employee breaks, timekeeping, and wages to avoid this simple but costly error.

Don’ts for your employee handbook
Although employee handbooks are incredible workplace tools, they can backfire when created incorrectly. Use caution around these points to make sure you have an employee handbook that works for you.

Don’t violate the National Labor Relations Act
Much has been written about the National Labor Relations Board’s (NRLB) recent assault on employee handbooks. Many policies often found in employee handbooks as recently as 2015 now can get you in hot water. Among others, you should look carefully at your policies requiring employees to keep certain information confidential, prohibiting employees from taking photos or videos in the workplace, and leaving work. If too broad, these policies can draw the attention and disfavor of the NLRB.

Don’t ‘set it and forget it’
Your business is evolving. Your expectations of employees this year might not fit next year. Further, as your company grows in size or opens locations in other states, you will need new policies. Even in years that your employee population remains stable while you focus on other elements of your business, employment laws change.

Your employee handbook is only useful to the extent it reflects your existing, lawful policies. Remember to update it regularly. Fortunately, once you have a good base handbook, updating is usually less expensive.

Also, don’t give your employee handbook to employees without going over it with them. When you were an employee, did you read your employer’s handbook? Exactly. Take ten minutes to sit down with each new employee and discuss the most important policies in your handbook. Go through the table of contents so your employees know where to look when they have questions about policies.

Don’t inadvertently create a contract
Failing to include the at-will statement discussed previously makes it more likely an employee could misunderstand your employee handbook as a contract for employment. However, there are other ways to inadvertently create an implied contract. Strict progressive discipline policies setting forth mandatory consequences for violations of company policy threaten at-will employment status when they deprive an employer of discretion to appropriately handle disciplinary events. Careless assurances of job security by a manager can overcome the presumption of at-will employment if there is no express policy. Avoid these points to keep employees from believing they have a right to employment with your company.   



Bifoss, BaileyBailey K. Bifoss is an associate with labor and employment law firm Fisher Phillips in San Francisco. She may be reached at [email protected].

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