Know Your Rights and Responsibilities:
A Guide for Employers New York State and Federal Labor and Employment Laws*
This is an overview of New York State (NYS) and federal labor and employment laws impacting cannabis licensees and employees. It includes the New York Consolidated Laws, Labor Law (NYS Labor Law), the New York Farm Laborers Fair Labor Practices Act (Farm Act), the employment related portions of the NYS Marihuana Regulation and Taxation Act (MRTA) and individual related Federal laws.
Labor and Employment Laws
Employers and employees in the cannabis business have legal rights and responsibilities in the workplace.
Labor and employment laws impact the entire employment cycle and practices including hiring, promotions, transfers, work assignments, work locations, wages, hours, benefits, time off, performance, discipline, training, termination and retirement. Most laws protect employees from retaliation or discrimination related to the specific law.
New York State Employment Laws Summary List
Federal Employment Laws Summary List
Labor Relations Laws and Collective Bargaining Agreements
The federal law for cannabis businesses except cultivators is the National Labor Relations Act (NLRA). For cultivators, the Farm Act applies. Key among these rights is that of joining or forming a labor union. In addition, once a union is formed employers are required to engage in collective bargaining. Collective bargaining is the negotiation of wages and other conditions of employment. Charges regarding violations covered by the NLRA and the Farm Act can be filed at designated agencies.
Under MRTA, to get a license and to operate a cannabis business, an employer must have a Labor Peace Agreement (LPA) signed by an authentic (bona fide) union in place. The Labor Peace Agreement requires a cannabis business owner to remain neutral if employees decide to join or form a union. In turn, unions agree not to strike or boycott the business. This does not mean that employees of a cannabis business must unionize.
For more information on LPAs, click here.
Once a union is formed the labor laws require employers to engage in good faith collective bargaining. For violations of these laws charges are filed with the appropriate agency.
Collective bargaining agreements are the contracts unions negotiate on behalf of their members with the employers regarding wages, hours, and working conditions. Most contracts contain a formal procedure for employees or the union to raise grievances about misinterpretation or misapplication of the contract. Typically, if the process does not result in resolution the union can request a hearing called an arbitration and a decision about the dispute by a neutral arbitrator.
Compensation
All cannabis employers are required to follow NYS and Federal compensation related laws. The federal law for all cannabis businesses except cultivators is the Fair Labor Standards Act (FLSA). For most types of cannabis businesses, NYS Labor Law applies and for cultivators the Farm Act applies.
Employees are classified into two categories exempt and non-exempt. Non-exempt employees are entitled to overtime. Exempt employees do not require overtime payments. Federal and NYS specific criteria for classifying an employee as exempt is based on specific responsibilities. In addition, there are minimum salary thresholds.
The laws also have strict guidelines limiting employers from identifying people as individual independent contractors rather than employees. Independent contractors enter into a contract with employers for a specific work project and it is limited to payment for the work. Independent contractors do not receive employee benefits and the employer does not pay or deduct employee related Federal and NYS taxes.
Misclassification of employees as exempt and independent contractors can result in significant financial consequences to employers where overtime payments have not been paid to employees that should have been classified as non-exempt.
Federal and NYS laws establish the minimum wage. NYS Labor Law requirements are higher than the federal minimum wage. In 2023, most employers in NYS must pay employees at least $14.20/hour. In New York City, Westchester County, and Long Island the minimum wage is $15.00/hour. On January 1, 2024, the minimum wage in NYS will increase to $15.00/hour. It will be $16.00/hour in New York City, Westchester County, and Long Island.
Most employees covered by federal and NYS laws are entitled to overtime pay when they work more than 40 hours in a workweek. Overtime wages are paid at the rate of 1.5 times the hourly wage an employee is paid. For example, an employee whose hourly rate is $20 would get $30/hour for any hours they worked over 40 hours in a week.
Farm laborers under the Farm Act are entitled to the same overtime pay of 1.5 hours for any work that they perform over 60 hours in a week and for work performed on their designated day of rest.
NYS Labor law requires employers to provide wage information when advertising and posting jobs. It also requires making existing job descriptions available and maintaining wage information. In addition, employers must provide written notices to new employees and all employees annually of their wage rate.
Time Off
The federal Family and Medical Leave Act (FMLA) entitles eligible employees to 12 weeks of unpaid time off for the serious medical condition of an employee or immediate family member, child bonding during the first year of a child’s life, and adoption or foster care. It provides job protection and continued medical insurance. To be eligible an employer must have 50 or more employees and employees must meet the required time worked.
NYS state law also grants employees the right to take up to 12 weeks of paid family leave. NYS family leave covers more family members, including time off to care for a serious medical condition of a domestic partner, parent of a spouse or domestic partner, grandparents, siblings and grandchildren. Employees are also entitled to paid time off to bond within the first year a child is born, adopted, or fostered, and for reasons related to a family member’s active military service in a foreign country. Employees must meet the required time worked in order to qualify for these benefits. If an employee qualifies, the employee will receive a percentage of the employee’s average weekly wage, up to a maximum amount set by the state. These benefits are paid for by a deduction from the employee wages.
In NYS, the law entitles employees to paid or unpaid sick leave depending on the size of the employer and the employer’s revenue. Sick leave includes mental or physical illness, injury, or health condition, regardless of whether it has been diagnosed, requires medical care or is preventive care.
In NYS, employees have the right to use safe leave for the care and treatment of themselves or a family member and to seek legal and social services assistance or take other safety measures if the employee or a family member may be the victim of any act or threat of domestic violence or unwanted sexual contact, stalking, or human trafficking. The law entitles employees to paid or unpaid safe leave depending on the size of the employer and the employer’s revenue.
Employers in New York are required to provide workers’ compensation coverage for employees in the event of a workplace injury or illness. Employers cannot require employees to contribute to the cost of this benefit. Under New York law, employers are required to provide workers’ compensation for all employees through an insurance plan or via self-insurance. If an employee is injured on the job or becomes ill as a direct result of the employee’s job, the employee has the right to receive medical care and financial support during the employee’s recovery period through employer’s workers compensation insurance.
For more information about worker’s compensation insurance, click here.
NYS law provides paid or unpaid time off for jury duty and voting.
The Farm Act requires a full 24-hour day of rest each week for cultivation employees.
Discrimination, Harassment and Retaliation
Federal employment laws and New York State Human Rights Law prohibit discrimination, harassment and retaliation against job applicants and employees based on protected characteristics. The Federal and NYS protected characteristics include race, gender, sexual orientation, religion, national origin, military status, disability, arrest/conviction record, predisposing genetic characteristics, gender identity/expression, marital/familial status, pregnancy/lactation, or being a domestic violence victim. Anti-discrimination laws apply to all employment practices involving the employment cycle. Also, an employer may not retaliate against an employee for complaining about discrimination or harassment on the job.
Safety
Federal and NYS Labor Law require employers to provide a safe workplace and guidance for safety plans. Employees have a right to report workplace safety issues to the employer and appropriate agencies.
* This overview covers key areas of the NYS and Federal labor and employment laws. In addition to NYS and Federal labor and employment laws and agencies, there are NY Local laws and agencies. The CWI resources are only provided for general informational purposes and are not a substitute for legal advice. The laws and their implementation are constantly changing.
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