Throughout the history of wage and employment law in the U.S., agriculture has always been treated differently than any other industry. Originally, the federal Fair Labor Standards Act (FLSA), which established national minimum wage and overtime requirements, exempted agriculture from both minimum wage and overtime requirements. While the minimum wage exemption has largely been repealed, federal law still exempts agriculture from overtime. Presently, only California, Hawaii and Maryland require overtime pay for agricultural workers. Wisconsin required overtime for farm workers, but repealed the requirement in 2003. Currently, advocates in California are seeking to increase overtime pay for farm workers, and advocates in New York want to apply overtime pay in agriculture for the first time.
In California, farm workers are entitled to one and one-half times their regular rate of pay for all hours worked in excess of 10 in a day. On the seventh consecutive day of work in a single workweek, California farm workers are also entitled to one and one half times their regular rate of pay for the first eight hours worked, and twice the regular rate of pay for any hours beyond the first eight. All other industries in California must pay one and one-half times the regular rate of pay for hours worked in excess of eight in a day and 40 in a week, with the same overtime obligations on the seventh day of work in a workweek.
A controversial bill, SB 1121, is pending in the state legislature in California that would subject California farms to the same overtime rules as all other industries, a change that could have a catastrophic economic impact on California agriculture at a time when farmers across the state are dealing with high production costs and depressed markets. In addition, the bill would remove other wage and hour exemptions applicable to agriculture. For example, the bill would subject California agriculture to more stringent meal period obligations and will remove an agricultural exemption from the requirement of “one day’s rest in seven.” Finally, the bill would eliminate the more flexible overtime exemptions available for field supervisors and replace them with an analysis based on the traditional “white collar” exemptions applied in other industries. These changes would mark a dramatic shift in the compensation of agricultural employees in California and the nation as a whole.
The impact can be seen by a simple example. Imagine a dairy worker who works 10 hours a day, six days a week (a common scenario among California dairies).
Under the current law, no overtime is due. Under the California minimum wage ($8.00 per hour), the employee earns $480. However, under the proposed bill, the employee works considerable overtime.
Under the proposed eight-hour requirement for overtime, the employee works two hours of daily overtime each day from Monday through Friday, for a total of 10 hours at time and a half. Because the employee reaches 40 regular time hours after the eighth hour on Friday, the 40-hour weekly overtime threshold is met, and the employee is entitled to overtime for all of his hours on Saturday, for an additional 10 hours of overtime.
This calculation represents approximately a 17 percent increase in labor costs. The impact on farms, especially family farms that dominate the dairy industry, is frightening in an economy where many farmers are struggling to stay afloat.
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This is not just a California problem, as farmers nationwide may find themselves confronted with proposed overtime increases for agricultural workers.
In New York, a bill was proposed to establish an eight-hour day and a 40-hour week for farm workers, but the bill was met with fierce opposition from the state’s agricultural industry. The bill was reintroduced and amended to propose a 10-hour day, and is currently pending in the New York legislature. Legislative actions in California and New York could potentially signal a trend toward increased overtime compensation for farm workers that could expand to other states.
The New York Farm Bureau reports that New York farmers paid $13.82 in labor costs for every $100 of commodities sold, approximately 56 percent more than the national average. Of the country’s top 10 farming states, only California farmers had higher labor costs. If these bills pass, they will impose an additional burden on farmers who are already paying high production costs.
An interesting twist is that some farm worker groups, including the United Farm Workers Union, have expressed reservations about increasing overtime obligations in agriculture. Some workers and their advocates worry that if overtime obligations increase, then farmers will find ways to work fewer hours or with fewer people, leading to reduced employment opportunities for farm workers.
With the political wind apparently blowing toward increased overtime in agriculture, it is important for farmers and their industry associations to work together to ensure that urban legislators understand the unique nature of agriculture and appreciate that the rules applicable to factories or offices do not necessarily fit the needs of an industry that has been the foundation of our nation’s economy throughout its history. PD
The goal of this article is to provide employers with current labor and employment law information. The contents should not be interpreted or construed as legal advice or opinion. For individual responses to questions or concerns regarding any given situation, the reader should consult with Anthony Raimondo at McCormick Barstow LLP in Fresno, California, at (559) 433-1300.
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