FLSA and the cannabis industry: 10th Circuit rejects 'illegality' defense

Although legal for medical and recreational use in Colorado, cannabis is still federally classified as an illegal Schedule 1 substance. As such, tension results when considering the applicability of federal employment regulations to cannabis merchants and their employees. The U.S. Court of Appeals for the 10th Circuit (whose rulings apply to all Colorado employers) recently addressed some of the tension when it ruled cannabis industry employees aren't categorically exempt from the Fair Labor Standards Act's (FLSA) overtime provisions, notwithstanding their employment in an industry that violates the federal Controlled Substances Act (CSA). Simply put—just as Al Capone was required to pay taxes on his mob money, marijuana industry employers must also follow federal wage and hour laws when it comes to their employees.

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