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October 2016, Volume 22, Number 4

California: Overtime, H-2A

AB 2757, the Phase-In Overtime for Agricultural Workers Act of 2016, would remove an exemption by January 1, 2022 that requires overtime pay for farm workers after 10 hours a day or 60 a week. Most nonfarm workers get overtime pay after eight hours a day and 40 hours a week.

California is one of four states to require overtime pay for farm workers; the 10/60 standard was established by the state Industrial Welfare Commission in 1976. AB 2757 failed in the Assembly June 2, 2016 on a 38-35 vote; 41 votes were needed for passage.

However, farm worker overtime re-emerged as AB 1066 and became law in September 2016. A similar 8/40 overtime bill was vetoed in 2010 and failed in a final vote in the Assembly in 2012.

Under AB 1066, farm employers must begin to pay overtime to farm workers after 9.5 hours a day or 55 hours a week, with regular 8/40 overtime required after January 1, 2022. Employers with 25 or fewer workers will have until 2025 to pay 8/40 overtime.

There is very limited data on hours worked by California farm workers. Employers told the USDA's Farm Labor Report that US hired farm workers were employed an average 39 hours a week in January 2016, compared to 41 in California and almost 47 in Arizona and New Mexico. Hours per week were higher in October 2015, almost 42 across the US and 44 in California.

In July 2015, average hours per week were 41 across the US and almost 44 in California, and in April 2015, 40 in the US and 42 in California. Arizona and New Mexico consistently have the longest average farm worker workweeks, often 46-47 hours, while Hawaii has the shortest work week, an average 37 hours.

The USDA data are averages for all types of workers, crop and livestock and year-round and seasonal. They require two caveats for California. First, over three-fourths of the workers reported to USDA are employed on the reporting farm 150 days or more, that is, they are disproportionately long-season and livestock workers. Second, the USDA data do not include workers brought to farms by crop support services such as labor contractors, who bring the majority of workers to farms in California.

Most seasonal harvest workers work less than eight hours a day, but some work six days a week. A seven-hour, six-day worker would work 42 hours, although many farmers schedule only half a day's work on Saturday.

Three types of workers are most likely to be affected by 8/40 overtime: livestock (dairy) workers, irrigators, and equipment operators. If 8/40 overtime were enacted, employers of dairy workers and irrigators would likely weigh the additional costs of hiring and training more workers compared to paying current employees overtime. Calculations for equipment operators may be different, with overtime pay likely cheaper than buying additional equipment and hiring more operators.

The slowdown in Mexico-US migration since the 2008-09 recession means that there are fewer newcomers arriving from Mexico, and many of the new workers entering the state's farm workforce are H-2A guest workers. In current tight labor markets, many employers are likely to improve the efficiency of scheduling workers or pay overtime because of the difficulties involved in recruiting additional workers.

The UFW argued that farm workers deserve the same overtime protections as nonfarm workers. Farmers predicted 8/40 overtime would backfire and reduce worker earnings, as farmers hired more workers rather than pay overtime.

H-2A. California has experienced some of the fastest growth in H-2A jobs, doubling from 4,100 in FY13 to 8,600 in FY15 and likely to exceed 10,000 in FY16. Half of the California H-2A certifications were with FLCs who provide workers to farmers, moving them from one farm to another if necessary. The largest FLC is Scaroni's Fresh Harvest, which provides H-2A workers to farmers in vegetables, strawberries and other commodities.

In California in FY12, 54 employers were certified to fill 3,200 jobs with H-2A workers, including 36 percent for strawberry plant grower Sierra Cascade. In FY13, 60 employers were certified to fill 4,100 jobs, including 29 percent for Sierra Cascade.

In FY14, newcomer Fresh Harvest received about the same 1,250 certifications as Sierra Cascade, and these two employers accounted for 42 percent of the state's 5,900 certifications. In FY15, Fresh Harvest was certified to fill 2,900 jobs with H-2As and Sierra Cascade 1,300, and these two employers accounted for over half of the state's 8,100 certifications, with Fresh Harvest accounting for a third.

In FY15, some 243 US workers were referred to fill H-2A jobs in California, and 23 or less than 10 percent were hired. In FY14, some 356 US workers were referred and 32 or less than 10 percent were hired.

Strawberry grower Fernandez Farms of Watsonville in August 2016 was fined $1.1 million and ordered to repay $1.29 million to about 400 H-2A workers who picked strawberries on his 50-acre farm to be marketed through Dole. US law requires employers to pay all costs of H-2A workers and to provide them with free housing. Fernandez charged workers $125 a month for housing, and required H-2A workers to reimburse transport and other fees of $1,600 to $1,700 each in order to be hired next season.

Fernandez Farms went bankrupt in 2013 and Gonzalo Fernandez was barred from using the H-2A program for three years. However, Fernandez's sister is farming the same land and using 30 H-2A workers, and nephew Juan Escobar uses H-2A workers to produce strawberries.