Washington Policy Center: Relationship status with ESSB 5172 – It’s complicated

Washington Policy Center updates us on SB5172, which is titled “Concerning the retroactivity of overtime claims in exceptional cases” and supposed to stabilize the state’s agricultural workers and economy, in Relationship status with ESSB 5172: It’s complicated.

Legislation (ESSB 5172) that would protect Washington farmers from a potentially catastrophic court ruling on retroactive pay, passed out of the Washington State Senate by a vote of 37-12 at the 11th hour last night with some significant changes to its language. Democratic State Senators hailed it as a victory for modernizing agriculture by ushering in a 40-hour work week. Republican Senators expressed concerns during the floor debate on the revisions to the bill.

What does the bill do now?

The bill as passed last night provides “that the safe harbor provision applies to all dairy employers, except members in the class of plaintiffs in Martinez-Cuevas v. DeRuyter Bros. Dairy, 196 Wn.2d 506 (2020).” It also provides protection from overtime lawsuits to all other agricultural employers.

The bill also removed provisions for compensatory accounts that would have provided $5,000 payments to any farmworker who had logged 1,300 working hours on a farm during any 12-month period between 2017 and 2024.

What is next?

The bill moves to the Washington State House where it will likely be assigned to the Labor and Workplace Standards Committee for consideration and refinement.

What needs to be refined?

The Senate debate highlighted some concerns about the bill that can be worked through in the House.

The notion of a 40-hour work week is difficult to imagine for most people in agriculture. The shift has already occurred in the dairy sector and has caused some unintended consequences that have hurt dairy employees. In some cases, hours have been capped at 40, leaving dairy employees with no overtime hours and less income than when they were working 55 hours a week.

There was little dispute about a phased in approach to paying time-and-a-half to farmworkers throughout the agricultural community. However, lowering the threshold for when that time-and-a-half is triggered to 40 hours simply cuts overtime pay out of the equation for most employers.

A better solution would be to either raise the threshold for when overtime wages are paid for all industry sectors with the exception of dairy, where the decision was made by the court, or create exemptions for seasonal needs. There are six other states in the U.S. with agricultural overtime wage provisions, all of them have hours thresholds that are 48 hours or more or grant exemptions during growing and harvest seasons.

In addition to concerns about the time-and-a-half threshold, some issues of non-wage compensation were raised during the Senate floor debate. In a food-centric community, it is not uncommon for employers to gift employees with Thanksgiving meals to feed their entire families or the equivalent of half a cow in frozen beef. These gifts to employees are not considered official wages but they are considered business expenses. So, how then, do agricultural employers rectify bonuses of that nature when the resources previously used to make such purchases will likely need to be set aside for time-and-a-half payments should they arise?

The same question must be raised for housing. Some farms offer on-site housing as part of a wage package. Offering housing to farmworkers is mutually beneficial. Farmworkers are not commuting and saving money that would otherwise be spent on rent. Agricultural employers are maintaining a workforce closer to their farm or ranch and ensuring their employees have access to a safe place to live. How does one calculate time-and-a-half on a W-2 when providing a home to an employee and his or her family?

There are several questions yet to be answered about ESSB 5172. But yesterday’s vote was not about presenting a perfect bill on the floor of the Senate; it wasn’t even about having all the answers. Yesterday’s vote was about keeping the hope of the original intention behind SB 5172 alive.

Now it is time to put our proverbial boots back on and get the next round of questions answered before bills from the opposite chamber can no longer be considered on April 11.

Capital Press: Agriculture is fighting for survival in Washington state

The following is a commentary published in the Capital Press, written by Pam Lewison of the Washington Policy Center – Agriculture is fighting for survival in Washington state

Some moments lend themselves to hyperbole. That amazing fishing trip from seven years ago; the winning free throw at a high school basketball game; the marriage proposal when time stood still.

Or 2020, when Washington agriculture was fighting for its life after a court ruling forced the dairy sector to begin paying time-and-a-half and left the specter of retroactive pay lingering in the background like an unwanted flu just before vacation.

In our state, we are waging a war about how best to determine what “just” compensation looks like in the wake of the Martinez-Cuevas v. DeRuyter Brothers Dairy court decision of November 2020. The dairy sector has its answer from the courts: dairy producers must pay time-and-a-half for any hours worked after 40. The rest of the agricultural community will have to wait and see what comes of the legislative session to determine how to move forward on the question of what constitutes a “work-week” in agriculture.

The ruling, however, left open the possibility of payment of more wages for past work. To be clear, the plaintiffs in the case were paid in full for their work. Any “back pay” would be applying the current law — time-and-a-half rules — to work done in the past. Specifically, it would be imposing a retroactive punishment against the DeRuyter Brothers Dairy for following the law at the time.

A bill in Olympia, SSB 5172, would make farmers pay again for work done three years ago, with 12% annual interest added on as a punishment. Any funds that could not be distributed to former employees by employers would be placed in an escrow account for six years while the Washington State Department of Labor and Industries attempted to locate the individuals involved in the claims. This is not a fix.

The original language of SSB 5172 — “the legislature intends to limit the retroactive effect of court decisions concerning overtime wage claims by delineating factors that establish inequitable results. When considering whether to award retroactive pay in a cause of action seeking overtime pay … the court is prohibited from making such an award when the award would create a substantially inequitable result” — acted as a protective mechanism for all overtime exempt employers; effectively banning lawsuits seeking retroactive payments. That is a fix. A fix for all overtime exempt employers, not just agricultural employers, because it wouldn’t punish employers for following the law.

As lawsuits pile up — more than 30 at last count — the rest of the agricultural community must entertain the very real possibility of paying time-and-a-half just as the dairy sector is doing now.

The prospect of retroactive pay creates an urgent existential crisis for the dairy sector in Washington state. Conservative estimates for the economic effect on the industry suggest it would cost our dairy producers $2 billion should nothing be done to stop this egregious injustice.

There is no more symbiotic relationship than the one between agricultural employers and their employees. It is based upon both parties working in harmony. Without farmworkers, farms would cease to be the cost-effective, efficient marvels they are in today’s economy. Without farms, farmworkers would cease to find themselves with reliable work at wages well above the state’s minimum wage.

Odd-numbered years are 105-day legislative marathons in Washington state. The long session is the saving grace for agriculture this time around. There is still time to negotiate, still time to make our voices and stories heard.

It is not the natural habit of farmers to discuss their business with the public. That is, in part, what got us into this mess in the first place. But it is absolutely essential that we put our habits aside and fight for our employees and our businesses by telling the truth about what we do.

Farmers and ranchers and their employees are a family, a community, and in this moment, when we need each other the most, we must make our voices heard and tell our individual and collective stories to anyone who will listen.

Cato Institute: H‑2A Visas for Agriculture – The Complex Process for Farmers to Hire Agricultural Guest Workers

The Cato Institute has a lengthy article explaining the H-2A agricultural worker program – H‑2A Visas for Agriculture: The Complex Process for Farmers to Hire Agricultural Guest Workers

Congress created the H‑2A program in 1986 to allow legal foreign workers to temporarily work for U.S. farmers who were unable to hire qualified Americans. However, illegal immigrant workers came to dominate the industry in the 1990s, and the H‑2A program was rarely used. While it still supplies only about 10 percent of farm labor, H‑2A employment has increased fivefold since 2005.

The H-2A program needs reforms, but productive reform is only possible if policymakers understand how the system currently operates. This brief explains how the H-2A visa program works. Its main findings include the following:

  • The H-2A program has more than 200 rules and is bureaucratically complex.
  • H-2A minimum wages are higher than every state’s minimum wage by, on average, 57 percent.
  • Americans accept only 1 in 20 H-2A job offers, and most later quit.
  • H-2A expansion is likely responsible for much of the large decline in illegal immigration from Mexico.
  • Violations of H-2A regulations are generally minor. An average of only 0.27 percent of farmers per year have been barred from the program because of serious H-2A violations.

H‑2A Program Rules

The H-2A program is an employer-sponsored temporary worker program, meaning that farmers initiate the process, not the workers. The H-2A visa program has no numerical cap but is restricted to temporary or seasonal jobs lasting less than a year.1 This requirement significantly limits participation and effectively bars dairies and most animal farms that demand labor year-round.2 H-2A’s most widely used predecessor—colloquially known as the Mexican Bracero Program (canceled in 1964)—had no such limitation.3 The H-2A program also narrowly defines “agriculture,” excluding most meat packers and processors.4

Figure 1 broadly outlines the H-2A process. The Government Accountability Office has found that the “complexity of the H-2A program poses a challenge for some employers” because it “involves multiple agencies and numerous detailed program rules that sometimes conflict with other laws.”5 In 2014, the U.S. Citizenship and Immigration Services (USCIS) ombudsman characterized the H-2A program simply as “highly regulated.”6 Appendix Table C details a noncomprehensive list of 209 H-2A rules that apply to workers and farmers, and Text Box 1 is a short summary of those rules.

IRBP Text Box 1

To start, when farmers have jobs that they want to fill with H‑2A workers, they must first receive a labor certification from the Department of Labor (DOL).7 They must antic­ipate a worker shortfall and initiate the labor certification process 60 days before the job’s start date by submitting job orders to State Workforce Agencies (SWAs), which are state‐​run entities that help unemployed U.S. workers.8 The SWAs guarantee that job offers comply with H‑2A regulations and inform unemployed Americans about the job opportunities.9 Farmers meanwhile must contact former U.S. employees and advertise the jobs.10

If too few U.S. workers apply, DOL will again review the jobs and certify the farmer to hire foreign workers for the remaining positions. The law requires DOL to make certifications at least 30 days before the job starts.11 Delays have cost farmers millions of dollars in lost crops.12 But the internet has improved DOL processing: it deployed online applications in 2012, and by 2019, about 94 percent of applicants used it.13 As a result, the department moved from completing just 63 percent of labor certifications within 30 days in 2011 to completing 97 percent in 2015 (Figure 2).14 In 2019, however, delays reemerged as DOL had the lowest rate of timely approvals (86 percent) of any year since 2013.15

If DOL grants the labor certification, the farmer pays fees of $100 plus $10 per worker, up to $1,000 total.16 Even after H-2A workers start, however, farms must continue to accept U.S. workers until half the job period has expired.17 … (continues)

Joel Salatin: The Rise of Rogue Food

Peak Prosperity interviewed farmer and author/activist Joel Salatin. Joel refers to himself as a ‘lunatic farmer’ because many of the changes he thinks our food system needs are either illegal under the current law or strongly resisted by the corporations controlling production and distribution.

I’m not optimistic at all about where the government and all its bureaucracy is headed. It is getting more and more stifling. The Food Safety Modernization Act (FSMA) that Obama put through, it’s absolutely stifling. It’s size prejudicial. It’s putting an inordinate price pressure on smaller producers. That’s a fact all the way across the board. And the cost of compliance is escalating — the amount of paperwork, the amount of licensing, the amount of testing and procedural stuff that’s happening on farms — is through the roof.

So on the federal level, I think it’s getting worse. Now, I think what’s happening on the local level, the other thing that’s a pushback that’s happened, is what’s now known as the food sovereignty movement. And that started in 2015 maybe, two or three years ago in Sedgewick, Maine. And that was a township that passed a half page food sovereignty law that said, in our township if a neighbor wants to do food commerce with another neighbor it’s none of the governments business and no bureaucrat has to be involved. So if you want to come to my house, look around, smell around, and operate as freedom of choice, as voluntary adults, as consenting adults – and I’m using very strong language here – to practice your freedom of choice, then two consenting adults should be able to engage in food commerce without a bureaucrat being involved. Well, very quickly six other townships in Maine took up the mantra and passed the regulation, the law, as well.

Then, of course, Maine pushed back and said, no, you can’t do that. And it continued to build in Maine until finally the legislature and the governor passed it and said, okay, if a township wants to do that it’s okay with us. Well, then, the USDA quickly responded and said we’re going to pull all of your federally inspected slaughter houses and food processing plants. Maine, you won’t be able to sell to anybody because the federal government is pulling out if you do this. Then the governor called an emergency session. They went back in, and it’s still being negotiated. It’s a big hoo-ha. Believe me, there are a lot of us around the country that are watching what’s going on in Maine, and we’re very interested in it.

And if that were duplicated around the country it would almost be like local food secession. There’s a place to say, at some level, we should be able to engage in food commerce at our own risk and our own freewill. And that is definitely gaining momentum.

See the entire interview below.