Dairy farming is not a 40-hour per week job. With labor laws becoming more restrictive, though, employers may have to treat it as such.

Overtime requirements were a topic of much discussion on the February 3 Hoard’s Dairyman DairyLivestream focused on agricultural labor, as the standards being set by some states could create precedence for other parts of the country to follow. Agricultural Workforce Specialist Richard Stup of Cornell Cooperative Extension pointed out that although the vast majority of state laws mirror the federal laws regarding work week and minimum wage, if an individual state decides to enact stricter standards, that is what must be followed.

Three top-10 dairy states are among those leading the charge with more protection for agricultural workers: California, New York, and Minnesota.

For example, as of last year, New York farm workers receive overtime pay (defined as time and a half) after 60 hours in a week. While Stup says that most farmers have found a reasonable way to handle that constraint, wage officials considered reducing that number even more. Due to the pandemic, that argument on changing the 60-hour-a-week metric was dropped for 2021.

“All of these changes in New York are the result of a 40-year political battle in the state, and they’ve really left the industry in an uncertain position with clearly higher labor costs than most other states and Canada, which is right next door,” Stup added.

California dairy farmers must already deal with further limitations. In the effort to get agricultural workers down to a 40-hour work week by 2022, as of January 1 this year, businesses with more than 26 employees must pay overtime if an employee works more than 8.5 hours a day or 45 hours a week. For farms with fewer than 26 employees, the 40-hour work week will be implemented in 2025, and the phase-in period begins in 2022 at 55 weekly hours.

Additionally, just last November, Washington state established overtime pay for agricultural employees past 40 hours in a week. “Washington state dairy is a special case. Their state supreme court ruled that the state’s exemptions for farm labor were unconstitutional because dairy farm jobs are hazardous,” Stup described. Farmers there are currently fighting against having to pay retroactive overtime pay going back years, he continued.

Handling the regulations
Overtime pay has its roots in the Great Depression. “The purpose of overtime as a government policy was to force employers to create more jobs and hire more of the people who had no work. It was a policy designed to create more jobs during a time of high unemployment,” Stup explained. “This is in contrast with recent state actions to implement overtime in farm labor when unemployment was very low, and employees are hard to find.”

Echoing that contradiction was Frank Cardoza, who manages a dairy in California and works with other farmers as a consultant. “Every January 1, you have to decide what changes you’re going to make to be successful in this industry,” he said. “We’ve looked at different options and we’ve tried different options as far as hiring more people and reducing hours, but in our case, it’s better for us to just pay the overtime. The employee makes more money, so he seems to be happier.”

Providing good jobs is clearly a priority at Cardoza’s dairy. The labor advances that have been made have been good ones, he said, just as improvements have been made in animal welfare over the last decades.

However, overtime pay can create a financial burden and more challenges for farmers. There’s an obvious cost to having to keep more employees.

“What’s really complex about it is the dairyman is in the middle. We’ve got to take care of the cows, but we also have laws to protect people,” Cardoza said. “It’s a very difficult situation for a dairyman because he’s got so many regulations, which we should have, but at the end of the day, he doesn’t make any money, and it’s tough.”

Stup added that in the labor battles in New York, worker advocacy groups don’t consider the economic argument as a legitimate part of the discussion “It’s simply a justice issue,” he said. “For them, economics simply do not matter.

“The challenge, of course, is that economics do matter,” he emphasized. “If you can’t run a business properly, you’re not going to be there very long. The other piece of that is that the employment is tied to that business. If you can’t run a profitable business, you won’t have those jobs, and those jobs will disappear.”

An ongoing series of events
The next broadcast, "How we're evaluating farm loans these days," will air on Wednesday, February 17 at 11 a.m. CST. Each episode is designed for panelists to answer over 30 minutes of audience questions. If you haven’t joined a DairyLivestream broadcast yet, register here. Registering once registers you for all future events.

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(c) Hoard's Dairyman Intel 2021
February 4, 2021
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