Agriculture is woven into the fabric of California’s economy. Some 407,300 people were employed by the industry in 2020 alone, according to the Employment Development Department (EDD) in California. The majority of that workforce is located in Central California, according to the EDD. Overtime rates for agricultural workers have been highly debated for years. That is particularly true of field workers’ overtime pay. Those working in the field are known to work longer hours during peak seasons.
Small agriculture employers — those with 25 or fewer employees — have been largely exempt from the legislative changes made in recent years. However, January 1, 2022, marks the beginning of updated overtime pay requirements for employers of all sizes. Now is the time to start preparing for some key changes to protect your business and ensure compliance with employment laws.
AB 1066: OVERTIME LAWS FOR LARGER EMPLOYERS ABOUT TO TAKE EFFECT FOR SMALLER EMPLOYERS
Employers with 26 or more employees have been required to provide increased overtime pay in a phased approach since 2016 under the passing of AB 1066. The bill established a new set of guidelines for California overtime laws for agricultural workers. 2021 is the last year that the laws apply only to employers with 26 or more employees. Starting on January 1, 2022, the phased schedule for changes to daily and weekly hours for overtime pay will begin to take effect for small employers. Those with 26 or fewer employees will be required to match the pay of larger employers by January 1, 2025. The California Department of Industrial Relations outlines the requirements for agriculture overtime pay in the chart below, or you can click here to view it:
As shown on the chart, starting on January 1 of 2022, both larger and smaller employers in the agricultural industry will be seeing substantial changes. Employers of 26 or more will be required to pay overtime for daily work exceeding 8 hours (as opposed to 8.5 by agriculture overtime 2021 standards.) At more than 12 hours per workday, the overtime pay jumps to a double-time rate.
At the same time, for smaller employers (those with 25 or fewer employees), the phased approach means that next year, in 2022, they will be paying overtime at 1.5x the rate after 9 ½ hours of work in a single day. With a yearly expanding and phased-in requirement, by January 1, 2025, the overtime rates for smaller employers will match exactly that which is about to be required of larger employers.
The changes were largely expected. Outside of the agricultural industry, it is standard for employees to be paid time and a half anytime they work more than 8 hours in a day or 40 hours in a week. Before law changes in 2016, the standard in the agricultural industry was well behind that for other employers: ag workers received overtime pay only after working 10 hours per day or 60 hours a week.
PROTECTING YOUR AGRICULTURAL INDUSTRY BUSINESS AND ENSURING A SMOOTH TRANSITION TO COMPLIANCE
Preparing for these new overtime changes now is the best way to protect your agricultural industry business in the coming years. Taking a proactive approach offers an opportunity to update important internal documents within your business.
As covered in a recent post about providing new employees with proper documentation, updating your employee handbook is an effective – and immediate – way to inform your employees of your new overtime policy. Having an employee handbook is vital to remaining compliant and protecting your business from litigation. Failure to have these policies properly documented for employees may be used as evidence of non-compliance – and it could be extremely costly to you through penalties or lawsuits.
As previously mentioned, each employer should have a comprehensive and up-to-date employee handbook that provides, at a minimum: (1) timekeeping requirements; (2) an overtime policy; (3) meal and rest break policies; (4) FMLA/CFRA leave (if you have 50 or more employees); (5) anti-discrimination, retaliation, and harassment policies (if you have 5 or more employees; (6) reasonable accommodation for employees with disabilities policy; (7) pregnancy disability leave policy (if you have more than 5 employees); and (8) paid sick leave policy.
It should be noted that at the same time that ag businesses are being required to comply with existing overtime rates for their non-ag counterparts, other California laws have increased the liability for businesses with overtime violations. Assembly Bill 1003 recently took effect and has greatly strengthened the state’s wage theft law. As covered in a previous post, overtime violations occur when a worker hasn’t been compensated for their overtime. It stands to reason, then, that the agricultural industry will likely be under increased scrutiny as a result.
While it can seem there are high stakes, compliance can be made simple with an experienced business attorney. Los Angeles County (including Beverly Hills), Orange County, Fresno County, and surrounding counties in the Central / San Joaquin Valley are included in our service areas.
As the Proper Defense Civil Division Founder, I focus my practice in labor and employment law. My extensive experience has helped businesses of all sizes ensure they are in compliance — and continue to stay in compliance.
COMPLEX EMPLOYER COMPLIANCE ISSUES ARE MADE SIMPLE WITH PROPER DEFENSE
Overtime laws, particularly in the agricultural industry here in California, can be a particularly challenging area for businesses of all sizes. Now more than ever, it is advantageous (and can bring great peace of mind) to have sound legal advice and representation while navigating complex overtime and other employment laws.
For a true advocate that you can trust, in a judgment-free zone, contact Proper Defense Law Corporation today. For a FREE consultation in the Fresno area, call (559) 825-3800. You can reach us at our Beverly Hills location by calling (424) 284-4066. You can also schedule an appointment online on our Contact Us page. It gets better with Proper Defense, we promise.
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