Theory Wellness, a Massachusetts-based cannabis company, will pay around $300,000 in restitution and penalties for violating state wage and hour laws, the state Attorney General’s office announced. The marijuana company, which has three locations in the state, failed to pay hundreds of employees premium pay and covered holidays, in violation of state law. During a press release, Attorney General(AG) Maura Healey said nearly 300 employees were not paid properly by the cannabis company and “will now be made whole.”

She continued, “Our office works to ensure that employees are rightfully compensated under the law for the work they do across industries in Massachusetts.” The Attorney General’s Fair Labor Division began an investigation in December 2020 following a complaint from a worker about premium pay. Fair Labor’s investigation determined that 282 employees were owed hundreds of thousands of dollars in premium pay for work performed on Sundays and covered holidays. 

Massachusetts’ wage and hour laws require that employees of certain retail businesses be paid “premium pay” for working on Sundays and certain holidays. In 2021, employees who are entitled to premium pay must be paid 1.2 times their regular rate and in 2023, the premium pay requirement will be eliminated, pursuant to legislation passed in 2018. Under the terms of the settlement with the Attorney General’s Office, Theory Wellness has agreed to pay in full the premium compensation owed to impacted employees. 

The company cooperated with the investigation and has since come into compliance with the premium and holiday pay laws. In a statement, Theory described the ordeal as “inadvertent payroll errors” and said they “worked closely and openly” with the Attorney General’s office “as soon as they were made aware” of the claims.  The company said, “most importantly, we had the opportunity to provide additional compensation to the former and current members of our team who were affected to resolve this matter swiftly.” 

Theory continued, “The complexities of a cannabis company are vast with a litany of traditional business-related resources, such as mainstream payroll providers that handle setting up pay rates, unwilling to provide services due to our classification federally.” They concluded, “This audit has been an opportunity to correct our policies and reaffirm our commitment to our team members, who make Theory what it is today.”