California state lawmakers are trying again to find a way to fairly compensate farmworkers for working overtime, this time removing the burden from farmers.
Last week, state Sen. Shannon Grove, R-Bakersfield, introduced a bill that would create a tax credit for farmers to offset the cost of paying overtime wages.
“California farmers are incredibly resilient, but it is no secret that agriculture faces significant economic challenges,” said Shannon Douglass, president of the California Farm Bureau, which sponsored the bill. “Research has shown that placing the burden of overtime wages on farmers came at the expense of both farming operations and the families of farm employees.”
Senate Bill 628 has bipartisan support, with state Sen. Melissa Hurtado, D-Sanger, who chairs the Senate Committee on Agriculture, backing the proposed tax credit for agricultural overtime.
“I fully support it,” Hurtado said.
The bill was drafted to address unintended consequences of California’s agricultural overtime law.
In 2016, the state adopted Assembly Bill 1066, which beginning in 2019 phased in a requirement that farmworkers—like workers in other sectors—be paid time-and-a-half when they work more than five days a week or 8 hours a day. Previously, due to the seasonal nature of agriculture, farmers could employ workers for up to 60 hours a week without paying overtime.
AB 1066 was intended to boost earnings for farmworkers. But early research suggests the law has lowered farmworker income as employers cut hours to avoid overtime costs.
During the first two years the law was phased in, the proportion of California farmworkers working more than 50 hours a week—the overtime threshold at that point in the phase-in—dropped by about half, according to a 2023 study by Alexandra Hill, an agricultural and resource economics professor at the University of California, Berkeley, which analyzed data from 2019 and 2020.
Hill encouraged further research on the law’s consequences, but she said in her study that available evidence indicated the changes brought about by AB 1066 “may not be benefiting the workers they aim to protect.”
The findings align with anecdotes reported by farmers and farmworkers across the state.
Leticia Hermosillo, who has worked as a farm laborer and crew supervisor in the Sacramento Valley for 45 years, said the 2016 overtime law negatively affected her crew.
During the season, which lasts from April to October, Hermosillo rises at 4:30 a.m. to supervise a couple dozen women tending squash, melons, tomatoes or tree crops. Because the season is only seven months, with little work available the rest of the year, the women historically worked 60-hour weeks to get their hours when they could.
“They really need to work,” Hermosillo said.
But during the past few years, they saw their hours slashed to 40 hours a week, she said, losing a third of their income.
“The people on my crew are really affected,” Hermosillo said. “If they go to the store, they spend most of their paycheck on groceries. They’re working just to pay the bills.”
SB 628, which is modeled on similar agricultural overtime tax credits recently adopted in Oregon and New York, aims to restore work hours for farmworkers without passing the cost to farmers or sacrificing the overtime wages guaranteed under current state law.
“California’s farmers and farmworkers are the backbone of our agricultural economy,” Grove said in a statement. “SB 628 is a commonsense solution that ensures farmworkers have more opportunities to earn, while providing relief to our agricultural businesses who sustain the world’s food chain supply.”
For farms that have faced challenges adapting to the agricultural overtime law, the relief provided by the tax credit could be significant.
Rob Miller, owner of Dahlstrom and Watt Bulb Farm in Del Norte County, grows Easter lilies and hydrangeas in fields and in a greenhouse.
Because of the labor-intensive nature of caring for hydrangeas, Miller cut his production of the flower in half. He also reduced his field acreage because of logistical challenges related to moving sprinkler lines between rows while allowing enough time to irrigate, a task previously done by irrigators working 10-hour shifts or longer.
“I can’t afford to pay the overtime,” Miller said, adding that he has been unable to divide the work into more shifts due to a labor shortage in the area. “The price of what I sell my products for has not kept up.”
As a result, “I have decreased what I do,” he said, with the number of people he employs at peak season declining from around 100 in prior years to fewer than 20.
If adopted, the agricultural overtime tax credit could cost the state budget $200 million to $300 million per year, according to an estimate by the California Farm Bureau. The figure does not factor in economic benefits to farm businesses and rural communities the bill may create, or state revenues that would derive from those benefits.
California offers a similar tax credit, capped at $330 million a year, for film and television production. Gov. Gavin Newsom has proposed increasing the cap on that tax credit to $750 million.
“There needs to be more support for agriculture,” Hurtado said, adding that neglecting the sector has come at the cost of high grocery prices. “I’m hoping folks begin to see that the support for our farmers and farmworkers needs to be there, because if not, then these are the types of challenges we’re going to continue to face.”
The introduction of the agricultural overtime tax credit bill comes on the heels of promises by Newsom to prioritize support for rural communities. And it comes as many farmers struggle with low commodity prices and high input costs.
In the Sacramento Valley, poor markets for almonds and walnuts have caused farmers to cut back on labor spending, according to Hermosillo, who is a former farm labor contractor.
“They’re not getting paid enough for what they grow, so they’re not able to pay people to do as much pruning,” she said, referring to off-season work that used to be easier to find. “The season is getting shorter.”
California’s famed winegrape sector faces especially steep challenges amid an unprecedented drop in demand, with farmers last year leaving more acreage unharvested than ever before.
“Growers are struggling to stay in business,” said Natalie Collins, president of the California Association of Winegrape Growers, which also sponsored the bill. “If legislators genuinely want to increase take-home pay for farmworkers, growers are going to need support from Sacramento.”
Hurtado said she has met with Grove and is working with her to address the challenges created by the state’s agricultural overtime law. For producers, after years of raising concerns about the overtime law, bipartisan intervention from the two San Joaquin Valley lawmakers may be a breakthrough.
“Sen. Grove’s agricultural overtime tax credit bill is a sensible solution that will enable farmers to continue producing food while providing a real and richly deserved boost in take-home pay for farm employees,” said Douglass, the California Farm Bureau president. “It is an investment in our food security and rural communities.”
— Courtesy of the California Farm Bureau.
