After drought conditions, record-low numbers of salmon are expected to return to California rivers to spawn this year, prompting the Pacific Fishery Management Council to cancel the 2023 season off the California coast. Now, an entire industry valued at $1.4 billion that supports 23,000 jobs is looking to other revenue streams. We explain how fishermen and women face the same business law complications as farmers when trying to diversify income after a disaster.
When the coronavirus first gained steam in the United States around Spring of 2020, we saw tens of thousands of farm businesses lose their markets overnight. Protein producers had animals that couldn’t go to slaughter. Fruit and vegetable growers watched products perish in the cooler as restaurant buyers canceled orders. Needing to do something (and seeing as how Americans certainly still needed to eat) farmers turned to new markets. Direct-to-consumer sales surged with farm-to-door service expansion and agritourism ventures pushed the limits of capacity.
Now, California’s salmon fishers are looking to catch other available species, develop new markets for alternative fish, or launch new types of recreational fishing opportunities that don’t depend on salmon. But they too will run into complications. Farm and fishery employment law are peas in a pod- both industries are regulated by a complicated set of laws that change depending on what the laborer is specifically doing (not just for whom they are working). For example, some farm and fisheries businesses are not required to pay at least the minimum wage or overtime wages for time spent catching fish. But, as soon as the business owner tasks an employee with, say processing catch onshore or doing clerical work, those protections are owed.
With fishers, the situation is especially relevant for payroll taxes. Many fishing businesses do not owe payroll taxes on wages if the worker is paid via a share of the catch (among other restrictions). But, if fishers are pursuing new species, workers may need hourly cash compensation- and in that case, payroll taxes are owed. The same goes for adaptation through tourism- using time on the boat to teach a paying client the ins and outs of the ocean will trigger overtime and payroll taxes for all time worked in that week. Adapting a business to new markets takes significant time and money- resources fishing families may not have in difficult times. Although it’s fishing that makes a business owner most happy, folks also see a role for federal disaster relief in times like these. That too, comes with a learning curve as all businesses learned during the pandemic!
Good information on the business law obligations of marine businesses can be very difficult to find. Farm Commons is busy developing much broader access to this information. Please reach out if you also want to make sure our marine business owners get access to the business law information they need. We may be able to help you with fact sheets and presentations. Contact Rachel Armstrong for more information.