California is one of the most regulated states in the country, creating a competitive disadvantage when it comes to agriculture. As the country’s largest producer of agricultural goods, California was the first state to address fair pay for agricultural workers by introducing overtime pay. The new wage and employment regulations are the top two issues for growers for a few reasons.
In 2016, then-governor Jerry Brown signed into law the agriculture over-time law, aligning agricultural workers with many other industries. There is a phase-in process for the new law, giving growers ample time to strategize and adjust.
- 2019 – employers with 26+ employees are required to pay overtime at 1.5x the regular rate of pay for agricultural employees who work more than 9.5 hours per day or more than 55 hours per week. The exempt annual salary threshold increased from $45,760 to $49,920.
- 2022: overtime for agricultural employees will align with other California non-exempt employees:
- 1.5X the regular rate of pay for more than 8 hours per day or 40 hours per week
- 2X the regular rate of pay for more than 12 hours per day.
- The phase-in for employers with < 26 employees begins on January 1, 2022.
- The exempt annual salary threshold increased from $43,680 to $45,760.
Pitfalls of Farm-Labor Contracting
Under the CA Labor Code Sec., 2810 businesses cannot willingly enter into agreements with farm-labor contractors if they have the knowledge or should have knowledge that the contracting company is not paying workers in compliance with all the applicable labor laws.
Furthermore, certain businesses may share liability with labor providers for wage payment violations and failure to provide workers’ compensation coverage if the work is performed within the usual course of the business and on the hiring entity’s premises.
Impact on Benefits
Another area that will heavily impact agriculture labor costs is its benefits. For example, some growers provide health insurance, paid holidays, paid sick days, paid vacations for their employees. Other benefits may include bonuses, 401K plans, and affordable housing. All of these fringe benefits will need to be factored in and evaluated for the impact on the bottom line; some of these benefits may need to be modified or eliminated.
Aiman-Smith & Marcy is a small-to-medium size law firm that focuses on employment law, consumer fraud and class actions in California. If you feel that you are a victim of unpaid overtime, breaks or expenses, or workplace harassment and discrimination, we can advise you how and when to resolve your wage and hour situation. We will help you pursue all available remedies to stop the harassing behavior and seek monetary damages to compensate you for any losses.
Schedule your free consultation with one of our highly-skilled attorneys today by calling (510) 817-2711 or (800) 798-8498 Toll-Free. You may also submit your information online here.