Oregon’s new law requiring overtime pay for agricultural workers went into effect January 1, 2023. If you are not already complying with the overtime requirements, you need to do so immediately! The law, enacted as House Bill 4002, establishes mandatory overtime pay for agricultural workers, with a four-year phase-in period:
- 2023 and 2024: Overtime must be paid for all hours in excess of 55 in one workweek;
- 2025 and 2026: Overtime for all hours over 48 in a workweek; and
- 2027 and thereafter: Overtime for all hours over 40 in a workweek.
The law applies to “agriculture,” which is defined as all branches of farming, as well as dairying. It includes production, cultivation, growing and harvesting of any agricultural or horticultural commodities; raising of livestock, bees, furbearing animals or poultry; and “any other practice performed by a farmer or on a farm as an incident to or in conjunction with farming operations, including preparation for market, delivery to storage or to market, or delivery to carriers for transportation to market.”
An “agricultural worker” is any individual performing services in agriculture for an employer in exchange for remuneration or rate of pay.
A “workweek” is a fixed period of time established by the employer reflecting a regularly recurring period of 168 hours or 7 consecutive 24-hour periods.
The workweek can begin on any day of the week at any hour and doesn’t have to coincide with the calendar week. It can also be changed by the employer so long as the change is intended to be permanent and isn’t intended to evade the overtime requirements.
The new law does not apply to:
• Hand harvest or pruning laborers paid on a piece-rate basis in an operation that is generally paid on piece-rate basis in the region — you can’t change to a piece-rate basis to get around the law — for an employer “who did not, during any calendar quarter during the preceding year, use more than 500 piece-rate-work-days of agricultural labor;” or hand harvest or pruning laborers who commute daily from a permanent residence to the farm and who have been employed in agricultural labor less than 13 weeks during the preceding calendar year;
• Parents, spouses, children or other members of an employer’s immediate family;
• Minors (16 years of age or under) employed as hand harvest laborers who are paid on a piece-rate basis and paid at the same rate as employees over 16 years of age on the same farm;
• Salaried employees principally engaged in range production of livestock;
• Exempt employees (administration, executive or professional work; predominantly performing intellectual, managerial or creative tasks; able to exercise discretion and independent judgment; and salaried).
Liability for failing to pay overtime under the new law is consistent with other overtime penalties, including payment of the full wages (the difference between what was paid and what was owed), plus civil penalties under ORS 652.150, calculated as the full wage hourly rate times 8 hours per day until paid or an action is commenced, up to 30 days, plus prevailing party attorney fees.
Penalty wages can’t exceed 100% of unpaid wages if the employee fails to send a written notice of nonpayment, or if a written notice of nonpayment is sent and the employer pays within 12 days.
As with other wage claims, BOLI can file suit against an employer to enjoin future violations and to force payment of amounts due but not paid, and also assess civil penalties of up to $1,000 for any willful violation. An agreement between the employer and employee for payment of less than is required by the law is not a defense.
The phase-in period
To ease the burden on employers while the law is phased in, a refundable tax credit is available for eligible employers to recover some or all of the wage increase. The credit is capped at $55 million per calendar year. It will be phased out in 2029.
A one-time allocation of $10 million was also funded to establish a grant, loan or lending program to provide financial assistance to employers to mitigate the increased cost in wages. To get the credit, eligible employers must submit an application to the Oregon Department of Revenue no later than January 31 following the calendar year for which the credit is sought.
If you are not already complying with these new overtime requirements, it’s imperative to do so immediately. If you haven’t paid overtime thus far this year, consider paying any unpaid overtime now.
Employers should also confirm employees are engaged in “agriculture,” particularly in light of the U.S. Department of Labor’s recent recovery of $167,179 in back wages from Columbia Empire Farms for misapplying the federal overtime exemption to non-agricultural workers.
Legal Access from the July 2023 issue of Digger magazine | Download PDF