Agricultural Employees: Important Issues to Consider
Agricultural labor is an important part of the cannabis industry but is one that is often complicated and sometimes misunderstood. Below are answers to a few of the questions we commonly get regarding agricultural labor.
No Independent Contractor Exception
In general, there is no automatic exception that allows a business to classify a farm laborer as an independent contractor only because of that person’s work on a farm. Even if it has historically been the practice of agricultural workers to work as independent contractors, that does not automatically mean that is an appropriate classification. Whether a worker is an independent contractor, or an employee is always going to depend on the worker’s actual job description and duties, and not on whether they are working a farm or non-farm job.
Determining whether a specific worker is an independent contractor, or an employee can be a complicated analysis that looks at the overall relationship between the worker and the employer. In general, the rule comes down to how much control the employer exerts over the worker. If the employer has the right to determine how, when and where the worker does the job, the worker is probably an employee. If the employer is only requesting an outcome and the worker has the right to determine how the outcome is achieved, the worker is likely a contractor. That is a very simplified description, so if there are any questions about whether a particular worker is an employee or a contractor, it is best to refer to employment counsel for an analysis.
Many employers prefer to classify their workers as independent contractors because the cost of employment compliance, reporting, and taxes can be quite high. Nevertheless, workers who fit the definition of “employee” rather than “independent contractor” must be hired as employees (and not contractors) or the employer risks penalties from the state and federal employment and tax departments.
In general, agricultural labor is going to be subject to many of the same employment laws as apply to any other employee in the state of Oregon, including overtime. The basic rule for overtime for employees in Oregon is that an employer must pay time and a half for all hours over 40 worked in a week. However, both Oregon and federal law do provide an exception for overtime for certain farm workers.
Like the discussion above, there is no “automatic” exception just because a worker is working on a farm or with farm goods. The exceptions are for specific jobs that take place on the farm, cultivating or handling that farm’s goods. That means that a worker who performs only field work may not necessarily have to be paid overtime, but a worker that splits their time between field work and say, website design, may have to be paid overtime for all hours worked over 40. If there are any questions about whether any employees are subject to overtime rules, it is best to refer to employment counsel.
Farm Labor Contractors
Farm labor contractors can be one way to reduce the compliance costs of hiring employees, particularly if the employees are short-term and transient, for example, employees hired one time per year for harvest. Importantly, anyone bringing labor to a farm (other than the owner), must be registered with the state. A listing of registered companies can be found on BOLI’s website (linked here). When hiring a farm labor contractor, you should ask to see their license, make a copy of it, and keep the license on file.
The farm labor contractor will be responsible for wages, working hours, meal and rest break compliance and payroll. Provided the labor contractor is licensed, any compliance issues should remain with the labor contractor only, and not flow through to the employer. Although hiring a farm labor contractor may reduce administrative costs and some employment liability, it may not prevent all employment liability to the employer. For example, if the employer itself is discriminatory or the employer’s officers or managers engage in harassment, those liabilities would likely stay with the employer.
If you have any questions, please reach out to us at Green Light Law Group (503) 488-5424.