New Overtime Rules Bring More Complexity to Farm Labor Calculations

“Especially in California, with the labor laws, you can’t have pickers work more than eight hours a day,” a professional from a tech startup that builds flying robot apple harvesters recently quipped to Forbes magazine. Of course, this isn’t exactly true. Human workers can pick for more than eight hours a day in California, but in many circumstances, they are owed overtime after an 8-hour day or over 40 hours per week. But the underlying sentiment is correct—farm owners will be turning to other, cheaper options as they become available.

Forbes reports that this futuristic-sounding machine will eventually be available for less than $200,000. If farm owners honestly cannot afford the rising labor costs, and the costs of non-compliance are just as high, then the price tag for farming technologies might soon not look so daunting.

To illustrate the complexity of compliance and the costs of penalties, we can turn to an Oregon farm that recently had to pay $167,179 in back wages and damages for overtime violations. This farm in question got tripped up on a vexing question—what farm work fits the technical legal definition of “agricultural labor”? Many farm employment law questions hinge on this determination, and the consequences can be huge. (These fines were assessed for work done prior to January 1 of this year, when overtime for all farmers in Oregon went into effect. )

In most states and in Oregon up until the beginning of this year, farm employees aren’t owed overtime wages. This exemption from labor laws holds as long as only agricultural labor is performed. Even if only one hour of non-agricultural labor is assigned, that worker is owed overtime wages for the relevant workweek.

The recently fined farm had inappropriately classified work at a packing house as agricultural. Usually, if a farm buys produce or fruit from another farm and packs both, the labor being done in that packhouse becomes classified as non-agricultural labor. All the workers in such a packhouse would be owed minimum wage rates and overtime even if the state exempts farm workers from their labor laws.

This important question of agricultural labor in the packhouse remains a vital one in most of the country, where farm workers do not secure the benefits of overtime. In Oregon, though, the distinction between agricultural and non-agricultural work is now a moot point. All farm workers there are now owed overtime after 55 hours of work a week (this threshold will decrease two more times before it hits 40 hours in 2027). Keep in mind, too, that Oregon farmworkers are also owed the state minimum wage rate, which will increase on July 1 to $13.20 for non-urban counties (up from $12.50/hour). See our Selected Essentials in Farm Employment Law for all the details and for information on other states.

As the trend towards overtime for farmworkers continues, farm owners are now shifting their attention to the financial implications of overtime pay. Oregonian Lawmakers are offering two solutions: a tax credit and payroll loan. Meanwhile, farmers in other similarly situated states are pushing for seasonal exemptions or simply limiting the hours of workers to no more than 40 hours per week.

Farms that don’t adhere to employment laws risk having to pay steep fines, penalties, and back wages. Farms that do adhere are facing the twin pressures of paying workers fairly and receiving less money for their product than they need to cover their costs. These factors may speed up the adoption of technological solutions on farms hungry for ways to save money and increase profits.