A proposed phase-out of Oregon’s agricultural exemption for higher overtime wages doesn’t appear to have dimmed the farm community’s opposition to the bill.
House Bill 2358 would require farmers to pay their workers one-and-a-half times their regular wages if they work longer than 40 hours per week.
Growers are currently exempt from that requirement, which applies to most other industries, and many argue the bill would force them to reduce work schedules to avoid the higher labor expenses.
Due to feedback about the bill’s economic impacts, Rep. Andrea Salinas, D-Lake Oswego, has proposed an amendment under which higher overtime wages would be required beyond 50 hours per week in 2022, 45 hours per week in 2023 and 40 hours per week in 2024.
The Fair Labor Standards Act of 1938 excluded farm workers from higher overtime pay due to “racism and bigotry,” Salinas said.
While Oregon farmers have only inherited this exemption, they can help dismantle it, she said.
The Oregon Farm Bureau and several other agricultural organizations are urging lawmakers to reject the amendment, arguing the change would simply draw out the process of farmers limiting work hours, increasing mechanization or shifting to other crops.
“Farmers are price takers, and the economics of agriculture provide no other option but to control costs,” the groups said in written testimony.
The Oregon Association of Nurseries doesn’t deny the racist motivations for FLSA’s overtime exemption but the appropriate “fix” would be changing the law nationally, so competitors in other states don’t have an advantage over Oregon farmers, said Elizabeth Remley, the group’s lobbyist.
Remley urged lawmakers against taking action on HB 2358 and instead spend more time on a solution that accounts for the numerous benefits that Oregon farmers provide their workers.
Those benefits, including health insurance, childcare, free housing and bonuses, would have to be cut by farmers who are unable to limit work schedules to 40 hours per week, according to the bill’s opponents.
The bill’s proponents countered that HB 2358’s alleged financial burdens are greatly exaggerated.
California passed legislation that will end the state’s agricultural overtime exemption while Washington is preparing to do the same, said Alicia Temple, legislative advocate for the Oregon Law Center, which advocates for laborers.
Oregon farmers will have trouble recruiting workers if they’re known to pay less than growers in those neighboring states, she said.
Christmas tree farms didn’t qualify for the agricultural overtime exemption due to a legal interpretation that stood for nearly 20 years, yet such operations didn’t cease production, Temple said. “It is a myth that the industry cannot survive paying overtime.”
“No one has cried wolf more often” than farmers and their lobbyists about labor reforms in the past, but the economic devastation “never materializes,” said Mark Brenner, a labor economist at the University of Oregon.
A study at the University of Massachusetts determined that overtime pay for farmworkers only increased labor costs by 5%, or about 1.6% of an average farm’s revenue, Brenner said.
Labor represents about one-fourth of agricultural operation costs in Oregon, while farmers pay more for seed, feed, fertilizer and chemicals, he said.
Prices for farm products such as milk, blueberries and asparagus would rise by only a penny or two at the grocery store if growers paid for overtime, “assuming all these costs were passed on to consumers,” he said.
Devon Wells, an orchardist near Hood River, disputed this interpretation of the bill’s impacts.
“Five percent of my labor costs is $100,000 that comes off the bottom line of my business, which was below zero the last two years,” he said.
Unlike grocery stores, farmers cannot raise prices to account for rising expenses and to retain the same profit margins, Wells said. “We don’t get to increase the price of fruit.”
The House Business and Labor Committee is scheduled to vote on HB 2358 on April 7.