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Resources and links:
Washington State Tree Fruit Association
Washington State Senate Bill 5172
WSU Agricultural and Food Science program
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Episode Transcription
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Drew Lyon: Hello, welcome to the WSU Wheat Beat podcast. I’m your host, Drew Lyon, and I want to thank you for joining me as we explore the world of small grains production and research at Washington State University. In each episode, I speak with researchers from WSU and the USDA-ARS to provide you with insights into the latest research on wheat and barley production.
If you enjoy the WSU Wheat Beat podcast, do us a favor and subscribe on iTunes or your favorite podcast app and leave us a review so others can find the show too.
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In the fall of 2022, students in Agriculture and Food Systems 201: System Skills for Agricultural and Food Systems were given the assignment to speak with someone in WSU Extension to identify a topic of interest and interview a person knowledgeable on that topic for a podcast episode. We have selected two of the podcast episodes to share with you. This podcast episode was created by Andrew Darnell, Jake McNeill, King Hernandez, Mackenzie Shattuck, and Avery Jacob. I think you will enjoy it will.
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Mackenzie Shattuck: Hello. This podcast has been developed by Washington State University students in partnership with WSU Extension as part of our Agriculture and Food Systems class. My name is Mackenzie Shattuck and I am studying agricultural education. Working with me is King Hernandez, studying agricultural technology and production management, Avery Jacob, studying animal science, Andrew Darnell, studying organic and sustainable agriculture, [and] Jake McNeill, studying organic and sustainable agriculture.
Today we will be discussing the Washington State Senate Bill 5172, more commonly known as the Farm Worker Overtime Bill, with Washington State Tree Fruit President Jon DeVaney. For those who don’t know, Washington State Senate Bill 5172 removes the agricultural exemption from paying farm workers overtime. As of January 1st, 2022, the bill is in effect and all farmers must pay their workers overtime in Washington state. So, could you just give me a general overview of what Washington State Senate Bill 5172 is?
Jon DeVaney: Sure. Before I go into the what the bill did, there’s a little context of why it was enacted. The Washington State Supreme Court was hearing a case challenging overtime exemptions for dairy workers. Columbia Legal Services and a couple of dairy employees were suing the Deruyter Brothers Dairy in Sunnyside, saying that they had made a number of wage complaints. And among those was that they were being not paid overtime and that the overtime exemption was unconstitutional in their case.
That went to the Supreme Court and in November of 2020, the Washington State Supreme Court ruled that the overtime exemption was an unfair, unconstitutional grant of privileges and immunities to a specific category of employers. So, they only struck down the overtime exemption for those particular dairy workers, for dairy employees, because they were the folks at issue in the case. But the arguments made said that the Supreme Court if asked the question would find the overtime exemption unconstitutional for any other agricultural employees. So, we were looking at a situation across agriculture where the first time someone brought a lawsuit relating to other employees, it was likely to be found unconstitutional by our state Supreme Court. So, there was going to have to be some action by the legislature to clarify the status of agriculture.
In Washington state, perpetuating the exemption was going to be a very heavy lift, and employers at the same time were very concerned because the Supreme Court also left open the door to say, “well, if the exemption is unconstitutional, you should have been paying overtime in the past.” And so, there was a flurry of lawsuits being filed first against those dairy employers saying “you owe us three years of back overtime pay and penalties.”
So, a number of agricultural employers were looking at their wage records for the past 3 years and said, if anyone sues me on this matter, it’s like the Supreme Court has pretty much said it’s going to strike down the exemption and I can see millions of dollars in penalties for not having paid back wages, which at the time was what the law said. So that raised a whole lot of concern.
So agricultural groups went to the legislature and said, we see what the Supreme Court has done to dairy and is likely to do to the rest of agriculture. You can’t do this to us overnight and you can’t do it retroactively. Changing the rules retroactively is not fair to people who are following the law as it was written and understood.
So, the legislature had a long debate on that issue and did agree to shield from retroactive claims employers in agriculture, including dairy employers, and to provide for employers in agriculture other than dairy, a three-year phase-in period. So, in 2022, the overtime ceiling is 55 hours for the rest of agriculture. It will be 48 hours before overtime kicks in in 2023, before going to 40 hours in 2024. For dairy employers who were once sued and subject to the Supreme Court’s decision, they were immediately subject to the 40-hour overtime threshold.
So, a lot of folks that work in agriculture ask, “well, why did we agree to this?” Well, we’d already lost in Supreme Court level and we gained a phase-in period in protection for retroactive claims by doing it this way, which was a benefit. But what we did not get and have been seeking was some additional seasonal flexibility.
Agriculture is unique in that we don’t necessarily schedule our work the way manufacturing does–that we do not establish the hours of operation of our businesses—we’re subject to what weather dictates of when work needs to be done. And so, in other states that have overtime pay for agriculture, they either provided limited seasonal exemptions or higher thresholds for overtime pay so that workers can get the hours that they were used to working and the pay they were used to earning without having to trigger overtime.
In the case of those dairy employers and dairy workers, there was a lot of sympathy for providing overtime pay because many of those workers were working over 40 hours a week, you know 50, 52 weeks a year. That looks very different than other agricultural employers who might go over 40 hours and have longer days for short bursts of activity and then drop back down to a normal 40-hour week thresholds or even less–you might only have workers employed for a few weeks to do harvest work, for example. And so that is something that we are still talking to the legislature about because as we know in agriculture, the margins are so narrow and the profit margins, when they exist at all, are very narrow and slim. And so, there’s just no ability to pay overtime for most agricultural employers.
And so, what will happen instead is instead of offering more hours to workers that you have, you’re going to say, I can only pay you for 40 hours a week. After that, you’re going to have to go somewhere else, find other work. And I will have to try to find additional employees to supplement what I might need, whether that’s additional domestic workers moving between employers or with more reliance on the H-2A temporary agricultural guest worker program.
We haven’t really seen the whole effects of that yet because this year was a 55-hour threshold. And also, many of our crops, because of the cold spring that we had had much lighter crops this year. In my own industry, cherries were down about 40% from the previous year and apples are down about 20%. And so, there was just less work to be paid this year.
But if we have heavier crops in the future at a lower threshold, we are going to see a lot of very unhappy workers who are just told that they can’t work the number of hours they’re used to unless they move from employer to employer.
Mackenzie Shattuck: Mm hmm. I feel like this is going to hurt a lot of farmers, especially smaller farmers. Can you tell me some of the short- and long-term impacts this will have on farmers?
Jon DeVaney: Well, employers are going to have a much harder time managing their workforce because they’ll have to make decisions about, you know, can they afford to pay overtime? In many cases, the answer is no, unless they have a very high-value crop and the profit margin to still break even while paying time-and-a-half overtime. And so, in many cases, their choice is: can I afford to pay that or not? And if not, am I going to get the crop and not get picked or am I going to try to find workers elsewhere? If you have to cap those employees at 40 hours or instead try to find workers from somewhere else, that can be a very complicated thing to accomplish, and the labor market is very tight in agriculture and has been for several years. And so, the ability to find workers on short notice to meet those surges of need, for example, if you are having an impending freeze or need your harvest before a rain or freeze event or if you’re having warmer weather and crops are ripening faster than expected, you may not have the ability to plan far enough in advance to recruit the workers that you need. That’s a particular burden on smaller employers who may not have the networks of current employees to refer friends and acquaintances to employment.
And it also makes it much harder to access one of the few alternatives, which is the H-2A temporary ag worker visa program. That program is extremely complicated to use. There’s a lot of regulatory requirements and severe penalties if you don’t follow the program correctly. And you’re also required to pay all the visa costs, the transportation costs for bringing workers from their home in their home country up to Washington state and back again. And you have to provide that housing for the workers at no cost while they’re here. Not every farmer can afford to build apartment buildings and provide that at no cost to their employees, and certainly not if you’re only going to be employing them for a couple of weeks. That tends to be only something that works for larger employers who can justify that cost because they have diversified operations and will be employing those workers for months at a time. So, it is going to mean that the workforce management challenges for smaller growers become even more complex and it will push those larger employers to use the H-2A program more frequently.
Mackenzie Shattuck: I definitely think there will be a lot of unhappy farm workers coming out of this. Can you tell me some of the effects it’ll have on farmworkers?
Jon DeVaney: Farm workers are going to have either a loss of hours–if the employer can’t afford to pay them overtime, the employer will just say instead of working 50 hours a week or 45 hours a week at their current wage rate, they’re only going to get 40 hours. And after that, you’re just going to have to live on that or find a second job–because that is the financial reality that employer is facing. And those employees then will have to try to find work that fits around their existing schedule. And it may not be in the same commuting location that they’re used to. And it makes the scheduling of their end of their working lives that much more complicated.
Agriculture was told that overtime pay was something that was common in other industries, and so it should not be a problem–but anyone who knows people who work in the restaurant industry or in retail know people who work multiple jobs and have to balance schedules from multiple employers, and that that is not an ideal situation for them either. It is a very difficult circumstance for those workers. And it’s not something that the employer necessarily chooses for them, but it’s something that is an economic reality when those employers can’t afford time-and-a-half overtime.
Mackenzie Shattuck: I know that there’s a lot of workers that they work so many hours and it’s going to be unrealistic for a lot of farmers to pay them overtime. Have you heard of any farmers talking about putting workers on salary or is that even an option?
Jon DeVaney: Salary might be an option for a few workers, but the salary thresholds are higher to be an exempt salaried employee. It’s not just a salary threshold, it’s also a duties threshold. So, you have to have supervisory responsibilities, independent or professional work kinds of job descriptions, and be clearing the salary threshold, which is currently being phased up to higher levels. So, most farm workers would not qualify on either the salary or the duties and responsibilities tests to be an exempt salaried employee.
Mackenzie Shattuck: Okay. I see a lot of new technology in agriculture every day, and I was wondering if you think that this farm bill will push farmers to start putting more money into research and developing new technology to use on farms?
Jon DeVaney: Yeah. The shortage of available agricultural workers is something that’s been increasingly acute for a decade and more. A lot of agriculture organizations have been investing in research on developing automation technologies or labor-assisting technologies to make their existing workforce more productive. That was already the case, and certainly the advent of ag over time has accelerated that need. You don’t just flip a switch and get a research innovation—that’s a many years long process involving a lot of both public and private funds doing laboratory research and field testing. But certainly, this has contributed to the interest in and ongoing support for research and labor-saving technologies.
Those are going to be–they’re in the process of being developed, but they’re not going to be a panacea and they are not initially going to be cheap. And so not every employer is going to have the capital available to buy very expensive pieces of high-tech equipment, for example, robots to do harvest work the first time they’re available. That is something that already cash-strapped growers are going to find challenging to bear as an expense. So certain producers might be able to make that work, but it’s going to be some time before the technology becomes affordable enough that it can readily solve the labor problems across agriculture.
It’s also the case that, you know, those technologies are not going to replace labor entirely. They’re probably going to change how much labor you need or what kinds of employees you need. And that creates some of its own problems. You know–the research into automation, for example, is going to increase the need to hire people with technical and computer skills who are already hard to recruit in this economy–that are in so much demand, and telling someone that you really want them to come and work for a farm in central or eastern Washington rather than working for Amazon or Microsoft can be a tough sell when they can make stock options and other things in a high-tech startup.
Mackenzie Shattuck: I definitely think that technology will be a huge role in agriculture soon. I know that labor intensive crops mostly will be the ones that are affected by this bill. What industries will be–or what crops and farmers that grow certain crops–which industries will be most affected by this bill?
Jon DeVaney: Well, you’re correct that it’s the most labor intensive who are going to be most directly affected. But anyone who has paid agricultural workers is going to see their employment costs increase. And many of those even agricultural employers and in crops that don’t have a lot of employees, you know, they tend to be lower margin kind of producers, and so that can still be a significant portion of their overall production costs.
The biggest impacted crops will be, of course, the fruit and vegetable crops like apples, pears, cherries. But also hops, blueberries, wine grapes, many of these kinds of specialty vegetable crops as well. I was talking to a producer of zucchini recently who reminded me that zucchini grows several inches a day during summer weather, and so there’s just there’s no way to put off harvest work on some of those vegetable crops when you have a very narrow window to complete your harvest activities.
Mackenzie Shattuck: And the last question that I have for you is, do you know of any other states, or any other parts of the country that are implementing laws like this?
Jon DeVaney: Yes. California had already passed a phase-in for agricultural overtime. Colorado is moving in that direction, as is New York. They all have–and Oregon. They all have slightly different provisions, but certainly there’s multiple other states, largely those of the center-left. Those blue states, if you will, have moved first on the issue. And the bigger concern is that when you do this kind of change on a patchwork basis, you put the producers in those states at a competitive disadvantage to those who have not already adopted those kinds of rules. So, if you are a producer in New York growing fruit or vegetable crops and you’re competing against competitors in neighboring states, Ohio or New England, that have not adopted those rules, you’re going to see yourself at a competitive disadvantage.
Same thing with producers in Oregon and Washington relative to those in Idaho. So that creates a lot of challenges within local and regional agricultural markets.
Mackenzie Shattuck: Okay. Thank you so much for joining us today. I really enjoyed talking to you.
Jon DeVaney: Enjoyed it as well. Thank you for having me. And good luck with your project and with your class.
Mackenzie Shattuck: Thank you.
Jon DeVaney: Thank you. Have a good afternoon.
Mackenzie Shattuck: You too.
Drew Lyon: I hope you enjoyed this podcast episode produced by AFS 201 students Andrew Darnell, Jake McNeill, King Hernandez, Mackenzie Shattuck, and Avery Jacob. And thank you to their guest, Jon DeVaney, president of the Washington State Tree Fruit Association.
Thanks for joining us and listening to the WSU Wheat Beat podcast. If you like what you hear don’t forget to subscribe and leave a review on iTunes or your favorite podcast app. If you have questions or topics you’d like to hear on future episodes, please email me at drew.lyon — that’s lyon@wsu.edu — (drew.lyon@wsu.edu). You can find us online at smallgrains.wsu.edu and on Facebook and Twitter @WSUSmallGrains. The WSU Wheat Beat podcast is a production of CAHNRS Communications and the College of Agricultural, Human, and Natural Resource Sciences at Washington State University.
I’m Drew Lyon, we’ll see you next time.
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The views, thoughts, and opinions expressed by guests of this podcast are their own and does not imply Washington State University’s endorsement.