Time Tracking by Function
Employees frequently move between activities during a shift. Time systems should capture the function performed — cultivation, harvest, processing, packaging, dispensing, delivery, security, administration — not just clock in and clock out.
Allocating Labor to Inventory
Production labor is generally inventoriable for a producer; selling and administrative labor generally is not. Supervisory time may be split. Document the allocation basis and reconcile it to the payroll register each period.
- Job descriptions aligned to functional categories
- Time records supporting each allocation
- Periodic reconciliation of allocation to payroll totals
- Written policy for split-role employees
Employment Tax and Reporting
Standard obligations apply: withholding, federal and state reporting, unemployment tax, new hire reporting and workers' compensation coverage. Banking constraints can complicate funding, so confirm your provider serves the industry.
Common Pitfalls
Flat percentage allocations with no supporting records, untracked overtime in production, and classification errors between employees and contractors.
Frequently Asked Questions
- Can we allocate labor using a flat percentage?
- A percentage unsupported by time records is difficult to defend. Base the allocation on actual data and document the method.
- Are payroll taxes inventoriable?
- Employer payroll taxes generally follow the underlying labor cost. Confirm treatment with your tax adviser and apply it consistently.
- Do all payroll providers accept cannabis clients?
- No. Confirm industry acceptance before onboarding to avoid mid-year service termination.