Agricultural ("ag") workers on the West Coast must now be paid overtime.
The Oregon legislature passed what some called the “most divisive” bill of the short 2022 legislative session, requiring agricultural farmworkers to be paid overtime. Ag workers have historically been excluded from overtime pay, and this is still true under federal law.
HB 4002 phases in the hourly requirements for overtime pay over the next couple of years. For example: beginning in 2023 and 2024, ag workers must be paid time-and-a-half if they work over 55 hours in a workweek. The hours threshold for overtime decreases every two years until phasing down to the standard 40 hours in a workweek in 2027.
|Hours in One Workweek
|2023 and 2024
|2025 and 2026
|2027 and every year after
The requirement for overtime does not relate to exempt “white-collar” employees in the agricultural sector.
HB 4002 also creates a tax credit to help with the transition to paying overtime. The credit allowed is a percentage of the additional wages paid to ag workers, and this percentage depends on the number of full-time employees. The percent of the credit also decreases over the years, starting at 60% in 2023 and 2024 for employers with more than 50 full time employees.
Oregon joins both California and Washington, which both have laws on the books requiring overtime pay for ag workers.
In 2021, Washington also made ag workers eligible for overtime. Dairy workers are entitled to receive overtime pay after working 40 hours per workweek. At the start of this year, non-dairy agricultural employees became entitled to receive overtime pay for hours worked in excess of 55 hours in a workweek. Similar to Oregon, Washington has an overtime phase-in schedule, gradually decreasing the hours worked threshold until it is the standard 40 hours for overtime eligibility in 2024.
California was the first West Coast state to adopt overtime pay for ag workers. Similar to Washington and Oregon, California adopted a timetable for ag workers to receive overtime pay. This timetable phased in overtime for the number of hours worked per day and hours per workweek.
The hours worked per day / per workweek to be eligible for overtime pay also depends on the size of the employer. For example, in 2022 employers with 26 or more employees must pay overtime to employees who work more than 8 hours in a day / 40 hours per workweek, while employers with 25 or fewer employees are required to pay overtime after the employee works 9.5 hours in a day / 55 hours in a workweek.
We hope that this snapshot of current and upcoming overtime pay requirements for ag workers is helpful to employers as they navigate the new or changing requirements. As always, employers should call on us if they have questions or need assistance with updating related policies, practices, or employee handbooks.