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Minimum Wage and Overtime

Minimum Wage and Overtime for Production Agriculture

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Minimum Wage

After determining that the laborer is being hired as an employee and is eligible for employment, an employer should consider whether the law mandates a minimum pay rate for the employee.  This issue is somewhat complicated because federal and state laws address minimum wage but impose slightly different requirements.

When employers encounter conflicting labor laws, the general rule is that the most stringent requirement prevails; that is, the employer must adhere to the law that offers the employee the most protection.

The Fair Labor Standards Act (FLSA) is the federal statute which establishes minimum wage and hour provisions (including provisions for overtime pay) and record-keeping requirements. Since 1997, the federal minimum wage has been $5.15 an hour (29 U.S.C. §206(a)(1)).  However, not all agricultural employers are required to comply.  Agricultural employers are exempt from paying minimum wage if:

  1. the employer employed less than 500 man-days of agricultural labor each calendar quarter during the preceding calendar year (a man-day is any day during which an employee performed agricultural labor for at least one hour);
  2. the employee is the parent, spouse, child, or other member of the employer's immediate family;
  3. the employee: a) is employed as a hand-harvest laborer, b) is paid on a piece-rate basis in an operation, which has been and is customarily and generally recognized as having been, paid on a piece-rate basis in the region of employment, c) commutes daily from his permanent residence to the farm on which he is employed, and d) has been employed in agriculture less than 13 weeks during the preceding calendar year;
  4. the employee: a) is 16 years of age or under, b) is employed as a hand-harvest laborer, c) is paid on a piece-rate basis in an operation, which has been and is customarily and generally recognized as having been, paid on a piece-rate basis in the region of employment, d) is employed on the same farm as his parent or person standing in the place of his parent, and e) is paid at the same piece-rate as employees over age 16 are paid on the same farm; or
  5. employee is principally engaged in the range production of livestock (29 U.S.C. §213(a)(6)(A)-(E)).

For crop farmers hiring non-family members, the primary exception is number 1, that is, the farmer employed less than 500 man-days of non-family employees during any calendar quarter of the preceding calendar year. However, employers must maintain adequate records to determine and demonstrate their eligibility for this exemption.

The Wage and Hour Division of the United States Department of Labor is responsible for enforcing minimum wage requirements.  These administrative representatives investigate and gather data regarding wages, hours, and other conditions and practices of employment (29 U.S.C. §211(a)). This agency inspects employers' records to ensure that they are adequate and that the employer is exempt from having to pay federal minimum wage.  Employers who are not exempt from the federal minimum wage will have to pay $5.15 per hour and have documentation substantiating that the workers received at least this amount. 

Mandatory record keeping requirements are not discussed on this page.

In Castillo v. Givens (704 F.2d 181 (5th Cir. 1983), cert denied, 464 U.S. 850 (1983)), court addressed the issue of an employer's failure to keep records required by the FLSA and stated that the burden of proof for hours worked is ultimately on the employer (Id. at 194).  If the court can reasonably infer from the employee's proof that work was performed with improper compensation, the burden is on the employer to provide evidence to the contrary.  Therefore, employers should maintain employment records to comply with the FLSA and to ensure that, as employers, they have an adequate response to possible employee claims.

Although many employers may be exempt from having to pay federal minimum wage, both North Dakota and Minnesota minimum wage requirements are stricter than federal law. North Dakota minimum wage law does apply to producers (N.D.A.C. §46-02-07-02(1)).

The Minnesota minimum wage law (Minn. Stat. §177.23(6)) defines employer as "any individual, partnership, association, corporation, business trust, or any person or group of persons acting directly or indirectly in the interest of any employer in relation to an employee." The Minnesota statutes further categorize employers into two groups: 1) large volume employers with annual gross volume of sales or business exceeding $500,000 and covered by the Minnesota Fair Labor Standards Act, and 2) small volume employers with annual gross volume of sales or business less than $500,000 and covered by the Minnesota Fair Labor Standards Act (Minn. Stat. §177.24(1)-(2)).  Absent an exemption, every large volume employer must pay each employee at least $5.15 an hour, and every small volume employer must pay each employee at least $4.90 an hour (Minn. Stat. §177.24(2)(b)).

Exemptions arise in the definition of "employee" for purposes of the Minnesota minimum wage law. Employee means any individual an employer hires but does not include:

  1. two or fewer specified individuals employed at any given time in agriculture on a farming unit or operation who are paid a salary;
  2. any individual employed in agriculture on a farming unit or operation who is paid a salary greater than the individual would be paid if the individual worked 48 hours at state minimum wage plus 17 hours at one and one-half times the state minimum wage per week ($378 per week for larger employers and $360 per week for small employers);
  3. an individual under 18 years of age who is employed in agriculture on a farm to perform services other than hand-field work when one or both of that minor hand-field worker's parents or physical custodians are also hand-field workers;
  4. an individual under the age of 18 who is employed as a com detasseler (Minn. Stat. §177.23(7)(1)-(4)).

Employees are considered to be receiving a salary if they are paid a specified amount for each employment period (for example, each week, every two weeks, or every month) regardless of the number of hours workers during the period.  Most Minnesota producers are subject to minimum wage requirements even if exempt from federal minimum wage.

Paying laborers on a piece-rate basis does not excuse the employers from assuring that workers are paid minimum wage.  Employers who are not exempt from paying state or federal minimum wage and pay on a piece-rate basis must realize that a violation has occurred if the piece-rate basis, when converted to and calculated on an hourly basis, does not meet the hourly mm1mum wage requirements.  Again, record keeping is paramount in determining eligibility for exemption from minimum wage and compliance with the minimum wage laws.  Therefore, if an employee is paid on a piece-rate basis, the employer still must maintain records of the number of hours worked and whether the wages paid meet the minimum wage when calculated on a per-hour basis.

Employers who pay on a piece-rate basis often ask about the time period for determining whether minimum wage has been paid.  For example, a crew may move slowly in a weedy field and be able to move quickly in a cleaner field.  Can the time and pay for both fields be considered in determining whether minimum wages have been paid?  A similar situation may arise if the first hoeing is slow, but the second hoeing is completed quickly.  The answer is that workers paid on a piece-rate basis have to receive at least the minimum hourly wage during every pay period, which is generally every two weeks.*  This requirement of minimum wage every pay period may be troublesome for growers who pay on a piece-rate basis and whose laborers' hourly productivity is low due to the condition of the field.  One recommendation is that employers pay minimum wage based on the number of hours worked each pay period and then adjust the last payment to account for additional amounts owed.

* Technically, a worker paid on a per-acre or per-row basis is receiving a job-rate and not a piece-rate. Furthermore, there is a settlement period for job-rate employment which allows the minimum wage requirement to be met each pay period rather than each week. This may be a more accurate description of how Red River Valley farmers employ hand-field workers.

If an employee makes a minimum wage claim, the employee need only show the actual hours worked by a "just and reasonable inference."  An employer can then rebut this proof by offering adequate payroll records or by showing the inference is unreasonable (Anderson v. Mt. Clemens Pottery, 328 U.S. 680 (1946). Thus, the burden of proof begins with the employee and then shifts to the employer. Employers must keep proper payroll records to comply with the law and to respond to possible employee claims.

Federal law requires that an employer who does not pay wages owed to workers be liable for both the wages and a penalty equal to the wages owed (29 U.S.C. §216(b)).  The employer also may be liable for attorney fees and court costs.  Minnesota provides the employee a right to bring a civil action against the employer for violations of the minimum wage and other state labor laws (Minn. Stat. §177.27(8)). North Dakota has no state claim.

Overtime

Employees engaged in agriculture usually are exempt from the federal law that requires overtime pay (29 U.S.C. §213(b)(13)).  Likewise, North Dakota overtime provisions do not apply to any employee engaged in an agricultural occupation (N.D.A.C. §46-02-07-02(4)(b)).  However, Minnesota producers may not employ a laborer for a workweek in excess of 48 hours unless the employee is paid overtime. The overtime rate in Minnesota is at least one and one-half times the regular rate for the time in excess of 48 hours per week (Minn. Stat. §177.25(1)).  Employees who work as sugarbeet hand laborers and are paid on a piece-rate basis are exempt as long as the hourly rate of pay exceeds the required minimum wage by at least $.40 (that is $5.55 or $5.30 per hour depending on the employer's annual gross business volume). Again, the employer, whether paying on an hourly basis or a piece-rate basis, must have records to substantiate how much each employee was paid on an hourly basis.

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