Why overtime law fails both farms and farmworkers
By Norm Groot For many decades, farmworkers have been vital to the harvesting of food crops in the Salinas Valley and other parts of the Monterey County agricultural region. Monterey County farm employers do their part to attract and support farm- workers in a dimin- ishing agricultural labor pool. Many pay significantly higher wages to their employees than the current California mini- mum wage of $16 per hour, plus benefits such as healthcare and retirement programs. Norm Groot But some workers are losing hours and income due to California legisla- tion intended to help them. In 2016, the California Legislature passed Assembly Bill 1066 to extend overtime hours to farm- workers after 8 hours of work each day, or 40 hours each week. Previously, overtime was paid after 10 hours a day to accommo- date seasonal harvesting hours. In a recent study analyzing AB 1066, Alexandra E. Hill of the Foundation of Agricultural Economics at the University of California explained the bill’s underly- ing premise that “workers would benefit from higher incomes for the same time at work” if their hours and overtime re- mained unchanged. But she also noted an economic risk. “If employers reduce hours to remain below the new thresholds, worker incomes could fall, making workers who value the extra income more than additional leisure time worse off,” Hill wrote. “In this case, employers would also need to hire addi- tional workers, invest in labor-saving or
ers and their labor contractors send farm- workers home instead of moving to another field for continued work each day. This has resulted in shorter hours for farmworkers, sometimes even short- er than the regular eight-hour day. With almost continuous harvest of fresh food crops in the Salinas Valley region, there are tight windows available for peak harvest of crops. Careful planning of harvest activi- ties has altered some production plans to maintain the eight-hour workday. Thus, while many employers pay gener- ous hourly rates and benefits, their practi- cal solution to AB 1066 has been to limit daily work hours rather than have the same crew work multiple fields that will result in overtime pay. The higher farm wage rates in Monterey County can increase the overtime costs ex- ponentially—and the worker compensa- tion insurance premiums based on total payroll. Now, after devastation suffered by local agriculture from flooding events in 2023, farm employers are seeking every way possible to remain financially viable. With prices for fresh food products con- tracted well in advance of the planting of a crop, there is no ability to increase sale prices when production costs, such as la- bor, increase during the production season. Careful control of labor costs—the largest line item in fresh food production—is nec- essary to keep the bottom line in the black. Additional costs for overtime hours ap- pear to be a threshold that farm employers are not willing to cross. It is unfortunate that lawmakers did not consider their in- sights or heed their voices before passing a bill that has led to reduced hours and pay for farmworkers. (Norm Groot is executive director of the Monterey County Farm Bureau. He may be contacted at norm@montereycfb.com.)
A celery field in the Salinas Valley is harvested. Many farmers pay workers above the California minimum wage, plus health and retirement benefits. But employee hours were cut due to the new overtime law.
labor-augmenting technology, or make larger business changes like switching to less labor-intensive crops.” The bill has led to the latter scenario, with farm employers cutting hours to save on overtime costs. This results in smaller paychecks, as daily work hours have been reduced to meet the new overtime stan- dard. Relying on worker-reported federal data, the research found that California farmworkers worked 15,000 to 45,000 few- er hours in 2019 and 2020 while making $6 million to $9 million less per week than they would have if the 10-hour workday overtime exemption had continued. As a result, Hill concluded, “In 2019 and 2020, the two years following the phase-in of California’s new overtime standards for agricultural workers, the average California crop worker experienced reduced hours and earnings.” Labor unions, including the United
Farm Workers, supported the passage of AB 1066 as a means to increase farm- worker earnings. Meanwhile, civil rights icon and UFW co-founder Dolores Huerta noted that fewer working hours could be a benefit, given the strenuous nature of farm work and global warming’s negative impact on working conditions. This is con- trary to the bill’s intent. AB 1066 ultimately forced financial de- cisions for farm employers already facing rising input and regulatory costs, plus increasing amounts paid for employee health-care benefits and mandatory paid time off. With the overtime law increasing pressure on farms to balance their books, many farmworkers saw their work time re- duced by more than 10 hours a week. Local growers in Monterey County have adjusted their harvest work hours to com- ply with the rule change, as many predicted when AB 1066 became law. When harvest work is finished in one field, farm employ-
VOL. 51, NO. 13
April 3, 2024
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