Syracuse, N.Y. – Farm workers in New York are about to receive a big bump in overtime pay after a state board recommended that the trigger for overtime wages drop from 60 to 40 hours a week.
The changes will be phased in over the next decade. Farmers are worried, however, that having to pay farm workers like office workers will be so costly it will drive them out of business.
Yet farmers ultimately won’t have to pay for the overtime: Taxpayers will. The state has passed a law that will let farmers get reimbursed for the overtime premium -- plus 18% to cover additional costs.
New York has never been shy about giving away tax breaks to create jobs – essentially subsidizing the pay of new workers. Yet the overtime tax credit is believed to be the first time the state will reimburse a single industry for individual workers’ wages.
Advocates say that unique move is an acknowledgement of a long, overdue correction: Farm workers, by law and for decades, have worked long hours without being guaranteed overtime wages.
“Farm workers, like virtually every other worker in this state, should have the same labor protections,” said Lisa Zucker, an attorney with New York Civil Liberties Union. “Overtime pay is meant to protect workers from the effects of overwork on their bodies and their mental health,.”
But it also could be a sign of a new way that states like New York might invest in or prop up certain industries beyond what the market supports.
“We’re going to have farm labor be a quasi-governmental business, because taxpayers essentially are going to be paying for this overtime premium that we decided to mandate,” said Peter Warren, director of research for the Empire Center of New York, a policy-analysis think tank. “If taxpayers essentially are going to be paying for that premium, is the state going to start poking its nose more in all the other conditions of work since we’re paying for the labor?”
Farm workers play an essential role in both food production and New York’s economy. Farming is a nearly $6 billion industry annually, and the total farm payroll is nearly $1 billion. New York’s farming is vital nationally, too: The state is the third-leading producer of dairy products in the U.S. and ranks in the top 10 for several crops.
New York is home to more than 33,000 farms, which employ about 55,000 workers, according to the New York State Farm Bureau. Some workers, including management, would not be eligible for overtime.
Farm workers now get paid overtime after a 60-hour work week. Over the next decade, a state labor panel has recommended, that threshold would drop to 40 hours. That means farmers, like most other employers, would have to pay overtime to workers after a 40-hour week.
The state labor commissioner has until Oct. 21 to accept, modify or reject that recommendation.
Farmers say given the round-the-clock nature of a modern dairy or the seasonal nature of bringing in crops, shoehorning farm laborers into a 40-hour work week makes no sense.
“It can’t be done without really hurting the industry,” said Mike McMahon, whose EZ Acres farm in Homer has about 1,000 cows, each milked three times a day. “With that much of an increase in our labor costs, we’re going to have to bring in more people and give our workers less hours.”
But Zucker noted that other industries also deal with changing weather or haphazard scheduling -- and those workers get overtime.
“There are other other jobs that are seasonal. Landscapers get overtime pay. There are people who work in stores at holiday time who get overtime pay,” Zucker said. “There are people that work in nursing who are not allowed to leave if their shift is over and the next person hasn’t come on board yet.”
To ease the blow to farmers, the state plans to do something it’s never done before: Reimburse farmers for the overtime differential through tax credits.
New York will not only reimburse farmers for the additional overtime costs, but will also add 18% for administrative costs and increased wage taxes. When the plan is fully rolled out, in 2032, it will cost New York taxpayers an estimated $153 million per year, the state budget office estimated.
“That’s a substantial number,” Warren said, adding that it’s about the same amount as the child and dependent tax care credit.
There is, as of now, no limit on the number of employees or hours for which overtime would be reimbursed.
The reimbursement would apply only to the extra cost of the overtime wage, not the hourly rate. For example, if a farmer paid a worker $15 an hour and then $22.50 for overtime, the state would reimburse the farmer the difference of $7.50 per hour.
Any overtime hours over 60 in a week would not be reimbursed.
Still, farmers are wary of the reimbursement plan for several reasons. One, they have to pay the overtime up front and then wait for the state to reimburse them. Payments would come twice a year.
The other problem, farmers said, is that a future state legislature could decide the subsidy is too generous. Farmers would then be stuck with the law mandating overtime without the money promised to help pay for it.
“When is someone going to say, ‘We’ve done enough for our farmers? Let’s revoke some of this credit,’” said Brian Reeves, owner of Reeves Farm, in Baldwinsville.
In addition to physically demanding and sometimes dangerous work, farming operates on a seasonal clock that no one controls. Reeves said his vegetables and berries are perishable and need to be picked while the weather is good, making it difficult to restrict workers to 40 hours in a single week.
“Agriculture is truly different,” he said. “If I don’t pick my strawberries third or fourth day, I might as well plow the field under. They’re useless.”
Farm workers were excluded from getting paid overtime by the the Fair Labor Standards Act, enacted in 1938. States have the power to require overtime for farm workers; New York has become the eighth to do so.
The state of Oregon is also reimbursing farmers for the overtime differential, but not as generously as New York is. The Oregon tax credit reimburses larger farms at a lower rate than smaller farms, and drops to as low as 15% by 2028. The credit expires in 2028, unless the Oregon legislature renews it.
New York’s overtime tax credit has no expiration date.
Jessica Maxwell, executive director of the Workers Center of Central New York, which pushed for the 40-hour week for farm workers, praised the tax credit proposal.
“This feels like a pretty generous proposal, and I think it really responds to what farmers were saying,” said Maxwell, who grew up on a family farm.
The state’s new tax credits come as farmers, for the first time, are required to pay their workers overtime over 60 hours worked in a week. Farmers must also give workers a full day off every seven days.
The Farm Laborers Wage Board, a three-person, ad hoc panel, recently recommended dropping the overtime threshold by four hours every two years, until it reaches 40 hours in 2032.
The first step comes in 2024, when the threshold will drop to 56 hours. A farm worker who works 60 hours would then be paid 4 hours of overtime, and the state would reimburse the farmer for the overtime differential for those 4 hours.
Some farm workers already get paid at a higher rate than others. Many farm workers come from Central America under a federal guest worker program called H-2A. The minimum wage for H-2A workers in New York is $15.66.
New York state has also set higher minimum wages for some professions. While the minimum wage for Upstate New York is $13.20 per hour, fast-food workers get $15 an hour. Home health care aides downstate get up to $4 per hour of extra compensation above minimum wage.
While this would be the first time the state is directly subsidizing farm worker wages, farmers already get a variety of tax credits, tax breaks and subsidies from the state and federal governments. They can get reduced school taxes, tax credits for erecting new buildings and worker housing. This year, they can also receive a flat tax credit of $1,200 for each worker who puts in at least 500 hours in a year.
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