When New York State introduced overtime pay for farm workers two years ago, many farmers feared the increased cost would put them out of business while many of their employees worried about lost wages because of fewer work hours.
Now, as a state panel considers lowering the OT threshold from 60 hours per week to 40 hours, a report from the state Department of Labor suggests overtime pay hasn’t had a big impact on either group so far.
Farm employees earned, on average, $39,137 in 2020, the first year that they were eligible for time-and-a-half pay after 60 hours per week, according to the report.
That’s up from $37,659 in 2019 and $35,795 in 2018. The state minimum wage also increased in each of the three years.
“The average wage for farm workers with the new overtime protections did grow, but it didn’t grow much,” said department statistician Kevin Hannel, referring to the $1,478 annual wage gain between 2019 and 2020 compared with $1,864 between 2018 and 2019.
He presented the report at a virtual public hearing held on Tuesday by the state Farm Laborers Wage Board. The panel is considering whether to lower the OT threshold to 40 hours, the standard for most employees in New York.
Separately, Gov. Kathy Hochul in her State of the State speech on Wednesday proposed that the State Legislature create “a permanent refundable tax credit on overtime hours for any size farm … to offset increasing costs to farmers.”
During Tuesday’s wage board hearing, the labor department statistician said farm employment fell by 246 jobs to 23,402 in 2020 compared with 2019, even though the number of farms being counted increased because of a law change.
Still, worker retention remained steady and the number of foreigners on work visas continued to climb. “There haven’t been any big changes, not even [in 2020] with the new [OT] rules,” he said.
One of the reasons quickly became evident in the 3½-hour hearing: farmers are keeping employees to a 60-hour work week, whenever possible, to avoid paying time-and-a-half.
Most of the farmers who testified said lowering the overtime threshold would drive them from the industry because they are also paying more for fuel, machinery, transportation and supplies, but have little control over the prices they can charge for their harvest.
“Any further increase in labor costs may just be the final act, which finishes our family business for good,” said Walter Gaipa, owner of Marion Gardens Organic Herbs in East Marion. The 34-year wholesaler of herb and vegetable plants has six full-time employees plus seasonal help, he said.
“This is not the year to add an unnecessary burden to [agricultural] producers in New York” with the coronavirus still a threat, Gaipa said.
In 2020, the same wage board deliberated about lowering the OT threshold to 40 hours per week but postponed a decision citing the virus-induced recession. The board will hold two more public hearings at 5 p.m. on Jan. 18 and Jan. 20.
Forty-eight people testified during Tuesday’s hearing, with 35 opposed to reducing the threshold and 13 in favor.
Those calling on the board not to lower the threshold were primarily farmers, their children and some farm workers. Those seeking change were the owners of small farms, a college professor, an advocate for Hispanic and Latino residents and some farm workers.
“Farm workers shouldn’t bear the burden of farm owners’ [economic] challenges,” said Margaret Gray, a political science professor at Adelphi University who has followed farm employment issues for two decades. “Neither should [farm workers’] financial status or physical health be any less important than for those farmers or any New Yorker.”
Paulette Satur, owner of Satur Farms in Cutchogue, said its 70 employees earned 13,520 hours of overtime last year. The 24-year-old business supplies baby spinach, mesclun spring mix, baby leaf lettuce and other greens to retailers in the metropolitan area, including Whole Foods and Fresh Direct.
“Our competition is the huge processor brands such a Fresh Express and Dole who have overwhelming economy of scale,” she said, referring to her rivals’ larger operations and lower cost per package of lettuce. “The competition is fierce for refrigerated shelf space in stores, with price and slotting fees determining the winner.”
James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.
