Cannabis Business Readiness Guide: 6. Employer Responsibilities
At the State Level: Employment Development Department (EDD) Registration
- An employer is required to file a Registration Form within 15 days after paying more than $100 in wages to one or more employees. Please consult the California EDD website.
At the Federal Level: Internal Revenue Service (IRS) -
Employment Identification Number Registration
- Employers with employees, business partnerships, and corporations, must obtain a Federal Employer Identification Number (EIN) from the IRS. Businesses can obtain appropriate federal income tax forms using the IRS website.
Businesses with employees must maintain Workers' Compensation Insurance coverage. Consult the California Department of Industrial Relations (DIR) website and view a list of DIR Frequently Asked Questions about Workers' Compensation for employers.
Employers may finance their liability for workers’ compensation benefits by one of three methods:
- Self insurance - Most large, stable employers and most government agencies are self-insured for workers’ compensation. To become self-insured, employers must obtain a certificate from the Department of Industrial Relations.
- Private insurance - Employers may purchase insurance from any of the private insurance companies which are licensed by the Department of Insurance to transact workers’ compensation insurance in California.
- State insurance - Employers may also purchase insurance from the State Compensation Insurance Fund, a state-operated entity that exists solely to transact workers’ compensation insurance on a non-profit basis.
Employee Wage and Hour Laws
Wages, Hours, & Working Conditions
Businesses with employees must comply with laws establishing minimum standards for wages, hours and working conditions.
- Read more by visiting the Labor Commissioner's Office.
Reporting Uncashed Payroll Checks
Businesses are required to report uncashed payroll items as unclaimed property to the State Controller.
- Read more by visiting the California State Controller.
Paid Sick Leave
The Healthy Workplace Healthy Family Act of 2014 (Assembly bill 1522) requires that an employee who works in California for 30 or more days within a year from the beginning of employment is entitled to paid sick leave.
- Read more by visiting the Department of Industrial Relations.
Employee Safety and Health
The Division of Occupational Safety and Health (DOSH), better known as Cal/OSHA, protects and improves the health and safety of working men and women in California.
Cal/OSHA’s Consultation Services Branch provides free and voluntary assistance to employers to improve their health and safety programs.
Affordable Health Care Act
The Affordable Health Care Act contains both responsibilities and benefits for employers in California. Information about the Affordable Care Act from the Internal Revenue Service (IRS) is summarized below, and we encourage you to visit the IRS Affordable Care Act website to learn more.
Independent Contractor versus Employee
Not all workers are employees as they may be volunteers or independent contractors. Employers oftentimes improperly classify their employees as independent contractors so that they, the employer, do not have to pay payroll taxes, the minimum wage or overtime, comply with other wage and hour law requirements. Please visit the Department of Industrial Relations for more information or complete the Employment Determination Guide created by the Employment Development Department.