Farms and ranches are often tight on cash but long on good food, scenic housing, and other non-cash resources. Non-cash wages are often called “in-kind” wages under the law. Although non-cash wages are often allowed, they are heavily regulated. Farmers need to be sure they know their legal obligations before creating an in-kind wage program.
In-kind wages are among the most complex of farm employment law subjects! State and federal law limit the types of goods or services that can stand in for wages. Housing and prepared meals are generally allowed. Agricultural products are often not allowed. The educational value of the work experience is never allowed as an in-kind wage. When in-kind wages are allowed, there are strict rules on how the resource must be valued. After an accurate value is set, tax law dictates how the wage is accounted for on the books. Then, we generally also need a signed document between farmer and worker agreeing to accept in-kind wages. The law often does not allow farmers to require in-kind wage payments- if the worker wants cash instead, they may need to have that option.
Farm Commons can help. Our resource, Farmers’ Guide to In-Kind Wages (77pgs) provides farmers with a comprehensive understanding of the federal rules and regulations farmers must follow when paying farm workers in-kind wages. State-specific rules also matter when it comes to in-kind wages. The states can impose more restrictions, above and beyond federal law, on when and how in-kind wages can be offered. We are building state-specific rules into the Farmers Guide to In-Kind Wages as well as the Selected Essentials in Farm Employment Law collections.
Looking for more support and practical resources as you create a workforce wage strategy that works for your farm? Take our Advanced Employment Law Course, an online, comprehensive experience that helps farmers understand and apply farm employment law to their specific situations.
New to farm employment law, not yet a member, or looking for an overview of issues? Try our Farm Employment Law Basics(1 pg), an hand list of ten things every farm business owner should know about farm employment law. This resource is available to all, and will direct you to more detailed resources on the issues relevant to your farm.
