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New and Looming Overtime Pay Rules for Farmworkers Impact Farm Owners and Food Manufacturers

January 6, 2021 - minute read

Mandatory overtime pay rules for farmworkers continue to gain ground, affecting the agriculture and food manufacturing industries. While the FLSA exempts agricultural employees from overtime, some states have enacted their own rules. More significantly, under the incoming Biden-Harris administration, federal legislation may lie ahead.

For agricultural employers already facing pricing pressures, this creates both cost and compliance challenges. Food manufacturers could be impacted, too. For employers in these industries, it’s important to know where things stand, what changes are afoot, and what to monitor in 2021.

The Biden-Harris Pro-farmworker Stance

The incoming Biden-Harris administration made federally-mandated overtime pay for farmworkers part of its campaign platform and supports the Fairness for Farm Workers Act that Senator Harris cosponsored in 2019.

H.R. Bill 1080, still under review by the House Education and Labor Committee, calls for phasing in overtime pay (i.e., one-and-a-half times the regular payrate) by gradually lowering the overtime hours threshold. That threshold—set at 55 hours for 2021—is scheduled to drop by five hours each year, until attaining the 40-hour standard in 2024.

For farms with 25 employers or less, the law would take effect in 2024. The bill would also repeal overtime pay exemptions in related industries, including sugar and cotton processing.

Previously, the bill was thought unlikely to pass. However, with the force of the incoming administration behind it, that may change. Watch for more debate in 2021.

On the State Level, Overtime Pay Laws Popping Up

Six states currently have overtime pay laws for farmworkers. While all define overtime pay as one-and-a-half times the regular payrate, in other regards, these laws vary greatly.

California’s Phased-in Overtime Law  

California’s Assembly Bill 1066 attempts to soften the impact on farm owners by dropping the overtime pay threshold over several years. (Presumably H.R. Bill 1080 is modeled after it.) When it took effect in 2019, the threshold was set at 9.5 hours per day or 55 hours per week. Each year, it decreases by half-an-hour per day or five hours per week. By 2022, the states will reach its goal threshold: eight hours per day/40 hours pers week. Because California has a high volume of farmworkers, its impact will be significant.  

New York’s Newly-Renewed 60-Hour Threshold

New York’s Farm Laborers Fair Labor Practices Act (FLFLPA), which took effect January 1, 2020, provides farmworkers with overtime pay after 60 hours in a calendar week.

The law also mandated the creation of a NY Farm Workers Wage Board, charged with reevaluating—and potentially adjusting—the hours threshold annually. In a remote hearing held December 31, 2020, the board voted to maintain the 60-hour threshold for another year.

Washington’s New Overtime Law for Dairy Workers

Until November 2019, farmworkers in the state of Washington were exempt from overtime pay. However, the state Supreme Court recently ruled that dairy workers are entitled to overtime for work over 40 hours per week.

This decision is significant because it was made through the courts, not legislatively, and could set a precedent. Although it applies to dairy workers, advocates contend it applies to all farmworker and future legal challenges are expected.

Minnesota’s Unique Approach to Overtime Pay

Under Minnesota law, farmworkers are entitled to overtime pay after working 48 hours per week. However, salaried farmworkers who make more than the equivalent of 48 hours at minimum wage plus seventeen hours of overtime (equaling $740.88 in 2021) are exempt. This rule, which also resulted from a court case, encourages farm owners to offer workers both higher pay and job stability.

Maryland’s 60-Hour Overtime Threshold

Maryland provides limited overtime benefits to a specific population of farmworkers after they work 60 hours in a workweek. The law includes a number of exemptions, including for workers on smaller farms and seasonal workers paid on a piece-rate basis.

Hawaii’s Unusual Overtime Rule

In Hawaii, farm owners are required to pay overtime for workers over 40 hours per week. However, the law also allows farm owners to choose up to 20 weeks per year in which the overtime threshold increases to 48 hours—allowing employers to reduce overtime liability at peak planting and harvest times.

Although through these eclectic rules, states attempt to balance farm owner liability and farmworker rights, they present agricultural employers with complex challenges that resonate throughout the food supply chain.

What Impacted Employers Can Do

Every employer with an hourly workforce needs a highly-accurate time-tracking system—especially when it comes to overtime pay. They need data collection methods that fit their work environments, plus reports that allow them to track and document overtime activity. They may also benefit from easy-to-use scheduling software, which can help curb overtime altogether.

EPAY’s time and labor system offers all of these things. It’s automated system even sends field managers text and email alerts before workers cross the overtime threshold, so action can be taken.

Furthermore, our system helps employers lower labor costs—which is invaluable when compensating for other costs increases. Employers who switch to EPAY cut their labor costs by 5% or more.

Mandated overtime pay for farmworkers will continue to increase costs across the food supply chain, and proactive companies will want to investigate cost-savings solutions now. Unlike most time and labor solutions, EPAY is designed for employers with an hourly workforce, including the agricultural and food manufacturing industries. Take two minutes to learn more.

Filed Under: Compliance Manufacturing Food Manufacturing overtime