Review of payrolls shows higher hourly pay but lower overall earnings under farmworker overtime law

Yahoo

25-02-2025

Cherries are harvested in the Columbia River Gorge in Oregon. (Photo by Andrea Johnson/Oregon Department of Agriculture)
Some Oregon farmworkers are earning higher hourly wages but taking home less money annually than they did before the state's agricultural overtime law passed in 2022, according to a new analysis of farm payroll data from Oregon State University agricultural economists.
It's likely the result of farms reducing some employees' hours to avoid paying overtime, according to Tim Delbridge and Jeff Reimer, the Oregon State economists who conducted the analysis and published it Jan. 31 on their blog.
Advocates for the agricultural overtime law said it has had material benefits for farmworkers, who report better working conditions and quality of life since the law passed. Reyna Lopez, executive director of the farmworkers union Pineros y Campesinos Unidos del Noroeste, or PCUN, said the analysis 'doesn't change much for us.'
'For us, it's still about the same thing,' she said. 'If they're going to be doing this important, hard, dangerous work in one of the largest sectors of our economy and feeding families across Oregon, they deserve equal pay like everyone else.'
Opponents of the law, including many farm owners and industry associations, said it will continue to create burdensome costs for small farms and seasonal crop growers, who will decide to close or consolidate in the years ahead. They say the law, which is being phased in over a period of five years and has gone from a 55-hour threshold for overtime pay to 48 hours this year, will also continue to lead to reduced farmworker hours and earnings. In 2027, overtime will be earned and paid after 40 hours.
'The problem growers face is they're price takers. They don't get to set the price on their commodity. Walmart, Fred Meyer, the large grocers set the price on the commodity. Growers have no control over that,' said Mike Doke, executive director of the Hood River-based industry group Columbia Gorge Fruit Growers. 'When there are increased regulation costs on overtime, on labor housing, growers have no way to make up for that, and so there are growers going out of business.'
The Columbia Gorge Fruit Growers were among the industry groups that helped fund Delbridge and Reimer's study, along with the Oregon Association of Nurseries, Oregon Dairy Farmers, Oregon Farm Bureau and the Oregon State University agricultural extension. The groups are considering asking the Legislature to create carve outs in the overtime rules, including capping overtime at 48 hours instead of 40 hours and creating a three-month window where it's capped at 55 hours, to accommodate the harvest season for seasonal fruit growers.
Delbridge and Reimer collected anonymized payroll data from five dairies, three nurseries and two cherry farms in Oregon since 2022, when the state passed House Bill 4002 requiring farm workers be paid time-and-a-half for overtime work on a phased-in, five-year timeline.
Oregon was the third state in the U.S., following California and Washington, to pass an agricultural overtime law. Workers in other industries have been guaranteed overtime pay for more than 80 years under the federal Fair Labor Standards Act, but it excludes farmworkers. Washington and California are now fully phased into a 40-hour per week threshold for overtime pay.
Delbridge and Reimer found that in Oregon, as in studies of California's farm workforce, overtime laws have been increasing hourly wages since 2022 but have led to slight decreases in overall average annual earnings and hours. In California, overall average weekly hours worked by farm employees dipped below the national average of about 41 hours per week, according to U.S. Department of Agriculture data.
As an example, the economists analyzed data from five employees of an Oregon dairy farm who all averaged more than 55 hours a week in 2022. By 2023, their average weekly hours decreased by about six hours, and each saw their weekly wages go down by an average of $75.
Lopez of PCUN said she hears less from farmworkers worried about hours being cut from overtime rules than from extreme weather events.
'What I've been hearing a lot from my members, and that's been on top of mind from them, is that what they have seen reducing their hours is really the impacts of extreme climate and environmental conditions,' she said.
Not all farm managers that provided data for the analysis reduced the overtime hours assigned to employees. But some farmers who participated said they instead reduced year-end bonuses, or were feeling less pressure to raise base wages for employees who were working overtime.
At 55 hours of overtime, labor costs for the dairies went up by an average of 3.6%. The economists estimate this year, as overtime moves to the 48-hour threshold, labor costs for dairies will rise nearly 7% and at 40 hours, labor costs will increase by about 12% from pre-overtime law years. Nurseries are slightly less impacted, with 4% labor cost increases by the 2027, 40-hour threshold. Cherry growers will see a 3.3% increase this year and a 6.3% increase in 2027, the economists project.
'It's clear that overtime regulation is financially worse for farmers, but it's ambiguous with respect to workers. Some workers will be worse off from the overtime, but I don't think it's true that all workers will be worse off,' Dembridge said.
Delbridge said one unintended consequence of the overtime law could indeed be farm consolidation, though that's more likely to happen at the 40-hour threshold than the 55- or 48-hour threshold.
'The impact of 55 hours has been pretty modest, right? And we see that in the data,' he said. 'I think what you're hearing now is more of a fear about what's going to happen this year at 48 hours, and 'How the heck are we going to be able to do this at 40 hours?' Just because it is quite a bit of a change from the status quo.'
He said it's easier for large farms to manage financial risks associated with agricultural overtime laws and new agricultural labor housing rules that will go into effect in 2027. Large farm operations can avoid overtime pay by hiring more workers. They might already have big housing facilities for those additional workers, or have the capital to invest in it, and a human resources manager or department that can handle hiring paperwork and training. Those are significant expenses for a small farm.
Doke called the 2027 agricultural overtime threshold of 40 hours mixed with the updated housing laws a 'perfect storm' of untenable expenses for small farms. Oregon's future, he believes, looks like Washington today.
'You won't find many small apple farmers like you did 20 years ago in Washington. It's mainly larger corporations, and we really want to avoid that here in Oregon,' he said. 'In Hood River and Wasco County, we have 440 growers in our membership through those two counties. If they were there to consolidate into less than 100 that would have huge impacts on the industry and the communities here, and that's what we're going to end up seeing is consolidation because smaller growers just can't afford these huge expenses.'
For Lopez of PCUN, overtime pay is a matter of sustaining a workforce that farmers say they need and struggle to find. It's only going to get harder with President Donald Trump's restrictive immigration orders and threats of mass deportation, she said.
'Again and again, they've been saying that the labor shortages are a challenge for them, and now we're in a time where that's only going to keep increasing,' she said. 'I really hope that they can see the bigger picture around why it's important to improve conditions for our workers.'
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