A farm in Texas relied on agricultural exemption from overtime wage requirements and is now having to pay $1.3 million in back wages. Workers in the warehouse were never paid time and a half for hours worked over 40 hours a week. After an investigation, the U.S. Department of Labor determined that warehouse workers were engaged in non-agricultural labor and therefore were qualified to receive overtime pay. The result? A hefty fine of $1.3 million for owed back wages, on top of an almost $11,000 penalty for other labor violations.
Although overtime rights for agricultural workers are a rising trend, states with such rules are still in the minority. The vast majority of states still do not require wages of time and a half for all hours worked over 40 in the week for agricultural labor.
So, if agricultural labor is exempt in Texas and under federal law, how did this Texas farm incur such a huge fine? There’s a lesson in here that all farms need to hear: not all work done on farms is considered “agricultural labor.” And here is where Larsen Farms of Dalhart, Texas went wrong.
Generally speaking, agricultural labor is defined as the production and marketing of crops and/or livestock. Other tasks, like processing, packaging, marketing, or hosting farm events, may be considered non-agricultural labor and therefore not exempt from overtime laws. If the type of work an employee is doing cannot be properly classified as agricultural labor, then even if the work is done on or for a farm, the exemptions from wage laws will NOT apply.
The farm in Texas is learning this lesson the hard way. Five hundred staff that worked in the Larsen Farm warehouse were not paid properly, leading to the over $1 million dollar fine.
The farm in question seems to be no stranger to investigations. This same Department of Labor investigation found that the farm was providing incomplete pay statements to their H2-A workers and that they were allowing drivers to transport workers without a proper license. During the pandemic, the farm suffered an OSHA violation for failing to report a COVID-19 outbreak. This farm is owned by one of the largest potato growers in the country, Idaho based Blaine Larsen Farms, Inc.
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