Applicability of Employment Laws to Agriculture
While the number of people employed in the agricultural industry has dropped significantly during the past century, many farms still employ family members, migrant workers, and full-time employees. Although hired farm laborers make up less than 1% of all hired workers in the United States, they are essential to agriculture production.[i] The average farm spends 12% of its operating budget on farm labor, but that number can be even higher for greenhouses, nurseries, and nut producers.[ii] The primary federal law governing labor and employment is the Fair Labor Standards Act (FLSA). States also have their own labor and employment laws. This article reviews key labor and employment laws impacting agricultural production.
Fair Labor Standards Act
The FLSA is the federal law regulating labor standards for industries involved in interstate commerce. The FLSA governs minimum wage, overtime pay, record keeping, and child labor. This law is administered by the United States Department of Labor’s Wage and Hour Division (WHD).
The FLSA provides exemptions to some agricultural employers for both minimum wage and overtime requirements.
The FLSA requires employers subject to this law pay their employees $7.25 an hour. While states can require a higher minimum wage, they cannot allow employers to pay a lower minimum wage than that required by federal law. Currently, thirty-two states and territories have set a minimum wage higher than the federal minimum.[iii] Iowa has set its minimum wage to $7.25, the federal standard.
Under federal law, a business must have a gross income of at least $500,000 in order to be required to pay minimum wage.[iv] However, Iowa requires only $300,000 which is the controlling standard for Iowa employers.[v] Iowa law also prohibits local governments, such as cities and counties, from setting minimum wages higher than the state rate.[vi]
Small farms that do not use more than 500 “man days” of labor do not have to pay minimum wage or overtime.[vii] Man days are defined as any day an employee performs agricultural labor for at least one hour.[viii] Agricultural labor does not include work that is not incidental to or in conjunction with a farmer's farming operation. It also does not include operations performed off a farm if performed by employees hired by someone other than the farmer.
An agricultural employer is also exempt from paying minimum wage to:
- Agricultural employees who are immediate family members of their employer
- Those principally engaged on the range in the production of livestock
- Local hand harvest laborers who commute daily from their permanent residence, are paid on a piece rate basis in traditionally piece-rated occupations, and were engaged in agriculture less than thirteen weeks during the preceding calendar year
- Non-local minors, 16 years of age or under, who are hand harvesters, paid on a piece rate basis in traditionally piece-rated occupations, employed on the same farm as their parent, and paid the same piece rate as those over 16
The FLSA also requires most employers to pay one and a half times the regular rate of pay for hours worked over the regular forty hours in one week. Most farming operations, however, are exempt from overtime pay provisions unless the employee is also performing non-agricultural work.[ix] The FLSA defines the term “agriculture” to include “farming in all its branches ... and any practices ... performed by a farmer or on a farm as an incident to or in conjunction with such farming operations, including preparation for market, delivery to storage or to market or to carriers for transportation to market.”[x] Regulations and relevant judicial precedent divide this definition of agriculture into two concepts: primary and secondary agriculture.[xi] Primary agriculture includes “farming in all its branches” including, the cultivation and tillage of the soil; the production, cultivation, growing, and harvesting of any agricultural or horticultural commodities; and the raising of livestock, bees, fur-bearing animals, or poultry.[xii] If an employee is working in any of these activities, the agricultural exemption applies, regardless whether he or she is employed by a farmer or on a farm. Secondary agriculture includes activities that are “performed by a farmer or on a farm as an incident to or in conjunction with such farming operations.”[xiii] These activities only qualify for the exemption if they are conducted on the farm and by a farmer or his or her employees.
Activities conducted by a farm employee can be non-agricultural activities entitling the employee to overtime. For example, office work for the farm is an agricultural activity, but office work for the farm and another secondary business such as a contracting company would not meet the definition of agricultural work. If an employee performs both agricultural and non-agricultural work, overtime must be paid to an employee who works more than 40 hours per week.
The FLSA also requires employers subject to it to post notices[xiv] in a visible place at work. These notices are available in several different languages, but employers are only required to post them in English. Employers must also keep record of wages, hours, and other basic information such as names of the employee, their address, sex and occupation, time and day of week when employee’s workweek begins, total wages paid, date of payment, and pay period.[xv] If employing a migrant or seasonal agricultural worker, agricultural employers are required to provide their employees with employment information such as work location, the time period the work will cover, the type of work, salary, benefits, and any other working terms or conditions.[xvi]
Subject to exceptions, including some for agriculture, the general age at which a child may begin to work is sixteen.[xvii] The FLSA allows minors who have reached at least sixteen years of age to work during the school day. A child who has reached at least sixteen may perform any farm job, even those defined as hazardous by the Department of Labor. Any minor who is at least fourteen years old may perform agricultural labor outside of school hours as long as the work is not hazardous.
The youth minimum wage is $4.25 for those under 20 years of age for 90 calendar days. [xviii] After that, an employer must pay the usual rate. It is important to note that the FLSA prohibits firing an employee to hire someone at the youth wage. The minimum wage may not apply to certain full-time students, student learners, and apprentices.
Workers’ Compensation in Agriculture
Workers’ compensation provides compensation to employees who are injured on the job, regardless of who caused the accident. Workers’ compensation is state-specific law without federal oversight. If subject to the requirements, the employer must buy insurance to protect employees who may be injured. The insurance provides the employee with compensation for injuries, and the employee may not file a related legal claim against the employer or business.
This is another area of law where agriculture is often afforded exemptions. In Iowa, agricultural employers are not required to participate in workers’ compensation (although they may choose to) where:
- the employer’s payroll is less than $2,500 a year, or
- the employee is a family member from the employer, the immediate family of a partner of a partnership officers of family farm corporation, or anyone who is engaged in agriculture who trades labor with another owner of agricultural land[xix]
If not covered by an exemption, Iowa agricultural employers must provide workers’ compensation.[xx] If workers’ compensation is not provided, an injured employee may bring a lawsuit against the employer. Any farm that employs H-2A workers must provide the equivalent of workers’ compensation benefits to all of its employees.[xxi]
Unemployment insurance is provided to employees who have been laid off or lost their job without a good cause.[xxii] Unemployment insurance has both a state and federal requirement. For 2020, an agricultural employer must participate in the Iowa unemployment insurance system (administered by the Iowa Workforce Development Division) and file a Form 940 to report federal unemployment tax if it:
- Paid cash wages of $20,000 or more to farmworkers in any calendar quarter in 2019 or 2020 or
- Employed 10 or more farmworkers during at least some part of a day (whether or not at the same time) during any 20 or more different weeks in 2019 or 20 or more different weeks in 2020.
[i] Farm Labor, USDA Econ. Research Serv., (Jan. 21, 2020) https://www.ers.usda.gov/topics/farm-economy/farm-labor/#size.
[iii] Alaska ($10.19), Arizona ($12.00), Arkansas ($10.00), California ($13.00), Colorado ($12.00), Connecticut ($11.00), Delaware ($9.25), D.C. ($14.00), Florida ($8.56), Guam ($8.25), Hawaii ($10.10), Illinois ($9.25), Maine ($12.00), Maryland ($11.00), Massachusetts ($12.75), Michigan (9.65), Minnesota ($8.15 or $10 depending on employer size), Missouri ($9.45), Montana ($8.65), Nebraska ($9.00), Nevada ($7.25 or $8.25 depending on whether healthcare insurance is provided), New Jersey ($11.00), New Mexico ($9.00), New York (12.50), Ohio ($8.70), Oregon ($12.00), Rhode Island ($10.50), South Dakota ($9.30), Vermont ($10.96), Virgin Islands ($10.50), Washington ($13.50), West Virginia ($8.75).
[iv] 29 U.S.C. § 206.
[v] Iowa Code § 91D.1(2).
[vi] See Iowa Code § 331.301.
[vii] 29 U.S.C. § 213(a)(6).
[viii] 29 U.S.C. § 203(u).
[ix] 29 U.S.C. § 213(b)(12).
[x] 29 U.S.C. § 203(f).
[xi] 29 C.F.R. § 780.105.
[xii] 29 C.F.R. § 780.105(b).
[xiii] 29 U.S.C. § 203(f); 29 C.F.R. § 780.105(c).
[xv] 29 U.S.C. § 211(c).
[xvi] 29 U.S.C. § 1821(a).
[xvii] 29 C.F.R. § 570.2.
[xviii] 29 U.S.C. § 206(g).
[xix] Iowa Code § 85.3
[xx] Iowa Code § 87.1
[xxi] 8 U.S.C. § 1188(b)(3).
[xxii] Iowa Code § 96.5
The Center for Agricultural Law and Taxation does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. The Center's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.