March 4, 2024

California’s Ag Overtime Law: Good Intentions, Unintended Consequences

The enactment of AB 1066 in 2019, expanding overtime pay for agricultural workers in California, was celebrated as a progressive step toward equity in the labor market. However, the nuances and complexities of agricultural economics have rendered the law’s impact less straightforward and, in many cases, counterproductive.

In her article, California’s Overtime Law for Agricultural Workers: What Happened to Worker Hours and Pay? Dr. Alexandra E. Hill, assistant professor in the Department of Agricultural and Resource Economics at U.C. Berkely, has provided empirical evidence supporting what many in the agricultural community anticipated: a reduction in weekly working hours and earnings for crop workers. This outcome underscores a fundamental misalignment between the legislation’s intentions and the realities of agricultural operations.

Western Growers, alongside myriad voices within the agricultural community, sounded the clarion call, warning of the repercussions that such legislation might engender. We explained that agriculture, unlike many other industries, is inherently tied to the rhythms of nature and the seasons. Factors such as weather variability, pest pressures and the perishable nature of crops dictate work schedules that are often incompatible with standard overtime regulations. Additionally, the labor-intensive nature of many agricultural tasks during peak seasons means that working hours can be long and unpredictable, necessitating a flexibility that AB 1066 does not afford.

The increased labor costs resulting from the law have prompted many producers, particularly small family farmers, to seek alternatives. This has led to a surge in mechanization and reliance on the H-2A visa program for temporary agricultural workers. While these strategies may address labor costs, they also introduce new challenges, including capital investment requirements for mechanization and building or otherwise providing free housing for H-2A employees.

Moreover, the broader economic context cannot be ignored. California’s agricultural sector is not only competing domestically but also on a global scale, where producers often face lower wage and regulatory burdens. This global competition puts additional pressure on California farmers to maintain cost competitiveness, further exacerbating the challenges posed by AB 1066. As a result, many farmers are either moving their operations to other states and countries, or shutting down their operations, rather than saddling the next generation with an unsustainable burden of high labor costs and regulatory constraints that undermine the farm’s economic viability and the traditional family farming way of life.

The implementation of AB 1066 has had profound effects on farmworkers, impacting not just their work life but also their personal and family well-being. The reduction in hours and earnings means more than just smaller paychecks; it translates into real hardships for individuals and families reliant on these wages. Workers face increased financial stress, struggling to cover basic living expenses such as housing, food, fuel and health care.

A July 2023 NPR piece says it all: “These farmworkers thought a new overtime law would help them. Now they want it gone.” That piece tells how reduced hours caused by new overtime laws has cut take-home pay and forced farmworkers to work two jobs instead of one, resulting in new economic pressure and a reduced quality of life.

The ripple effects extend into local communities, where decreased spending by agricultural workers results in less business for local shops and services, further straining rural economies. This cycle of economic contraction exacerbates the vulnerabilities of already struggling communities, underscoring the need for legislation that truly reflects the realities of agricultural labor and supports the well-being of workers and their families.

What, then, is the path forward? The findings from Dr. Hill’s study and the lived experiences of California’s agricultural community point to the need for a more tailored approach to labor legislation in the sector. This approach should account for the unique demands of agricultural production, offering flexibility to accommodate peak seasons while not incentivizing the reduction of hours offered.

Other states have adopted varied strategies to address the implications of overtime laws for farmworkers. For example, New York offers a tax credit to offset the additional costs farmers incur from overtime premiums, as part of a gradual rollout of its overtime legislation over several years. Colorado, on the other hand, has set a higher overtime threshold for small farms and seasonal work, allowing for a more flexible application of overtime pay rules to accommodate the specific needs of the agricultural sector. These approaches reflect an attempt to balance the protection of farmworkers with the operational realities of farming, providing potential models for refining California’s approach to agricultural labor laws.

While AB 1066 was rooted in a well-intentioned desire to improve conditions for agricultural workers, its real-world implementation has resulted in precisely the opposite effect. It has painted in stark relief the complexity of applying one-size-fits-all solutions to the agricultural sector. Moving forward requires nuanced, collaborative efforts that not only respect the unique characteristics of agricultural work and strive for fairness for agricultural employees, but also recognize the vital role of California’s specialty crop industry in feeding the nation and “…the economic realities of producing food in a state that leads the nation in agricultural innovation but faces unparalleled regulatory and cost pressures.”