ORISKANY, NY — What will be the impact of a higher federal and state minimum wage on my farm’s tax obligations?
Are farmers required to pay an unemployment insurance tax for part-time or seasonal employees? Should I be worried about an impromptu OSHA inspection?
These were among the concerns of a group of farmers who attended a seminar titled Agricultural Employers’ Requirements and Responsibilities sponsored by Cornell Cooperative Extension Oneida County.
It can be perplexing for farmers to follow the maze of federal and state guidelines for farm laborers, so CCE invited Eric Denk of the New York State Department of Labor’s (DOL) Binghamton office to explain the regulations and to answer their questions.
The U.S. Small Business Association Office of Advocacy statistics reveal it costs small businesses almost $7,000 per employee a year to comply with federal regulations. Small businesses experience this financial burden at a rate of 60 percent greater than the costs incurred by large corporations.
Pile state regulations on top of that, and it presents a more complex issue for any farm or business that brings in hired help.
Denk stressed that the state DOL can offer friendly, helpful and free advice to farmers on employment issues. “I want to stress that we’re not adversarial…we don’t have an enforcement arm (unlike OSHA),” he told attendees.
The state DOL is in the farmers’ corner and can give an overview when farmers are hiring employees, including immigrant workers, and also willing to help farmers review protocol for established employees.
Denk gave a powerpoint presentation outlining labor law compliance for farmers. Afterwards, he gave participants many pages of advisories covering such legalities as equal employment opportunities, minimum wage, contracts, details on job descriptions for new hires, the use of translators for immigrant workers, healthcare coverage and required documentation for employees.
Karen Barendse and her husband Jan, owners of River Road Farm & Greenhouses in Marcy, NY, have more than a decade of experience in the horticultural business, yet they still have concerns about the fair treatment of their labor force.
“We might have between nine and 11 part-timers from March to mid-June and they’ll work about four to six hours a day,” Karen Barendse commented. “Many of them are high school kids, and some of them come from Russian and Polish immigrant families. They’re very hard workers.”
She told Denk her primary concerns are about increases in the minimum wage and issues affecting minors. She asked, for example, what restrictions on driving a farm vehicle or working around hazardous equipment might apply to a 13-year-old worker versus one who is 18.
New York Governor Andrew Cuomo proposed raising the state’s minimum wage to $15 an hour. Some of the state legislators, responding to an outcry from certain industries, especially in farming, balked at the increase and implemented stepped pay raises instead.
Nevertheless, on Dec. 31, the minimum wage in New York State increased to $9 an hour from $8.75. Employers must post a minimum wage information poster in their place of work.
As for minors, the New York and U.S. Department of Labor have restrictions on types of employment and limits the hours of farm work for youths who are between the ages of 12 and 18. (Refer to the website, youthrules.dol.gov).
River Road Greenhouses has just one fulltime grower, Leif Willson, a production manager who helps the Barendses grow vegetable and bedding plants and perennials, including holiday plants, and sell landscaping supplies. Karen Barendse said she is worried about the impact of the minimum wage on the business’s bottom line and its tax structure.
“The cost of hay is going to cost us more and my geraniums are going to cost the customers more because I have to pay my employees more,” she said.
Likewise, Buddy and Dawn Richardson of Richardson Farms in Vernon Center, NY, also questioned Denk about labor issues. They have been in business 25 years.
“We crop 2,100 acres (soybeans, corn, hay, etc.) and have three fulltime and three part-time employees, all American workers who work seasonally,” said Dawn. “We only keep a small number of employees because of the tax regulations.”
At Richardson Farms, none of the family members take a salary, including two college-age daughters who work part-time. “We take out of the drawer for our personal needs and our bills, and we file taxes as a sole proprietorship,” she added.
“If the minimum wage reaches $15 an hour (which will take effect in a few years), there’s no way we can survive as a small business,” she said. “We are in danger of out-pricing our products and I’m afraid more people will turn to imports.”
The attendees have no choice but to follow labor laws of course, but new regulations and constant revisions can bring major headaches.
Denk said farmers can call any DOL office or a local county extension service and arrange for free on-site consultations from state labor specialists. The state labor department, he reassured them, will help them resolve these issues without fear of penalty, even if the labor specialist finds evidence of wrongdoing. The farmer still needs to correct the violations.
“OSHA fines are out of sight, so I recommend you do (an on-site consultation),” said Denk, referring to the U.S. office of Occupational Safety and Health Administration. What is frightening to farmers is that federal inspectors have a lot of leeway in determining violations of which the farmer might not be aware.
“You can assess your own farm for free (with state DOL guidance) and avoid potential fines of up to $10,000,” he explained.
Denk passed out a 30-page booklet titled Services and Protections for Farmworkers. Published in 2014, it includes advice for farmers about labor standards and the rights of employers and workers alike, such as those covering discrimination, worker’s compensation, unemployment insurance, job safety, receiving visitors on the farm, child care, taxes, social security, services for migrant, temporary and seasonal workers, and much more. Farmers can also obtain necessary documents and posters in Spanish.
The booklet also contains listings of state DOL offices and agricultural agencies throughout the state. For further information, go to www.labor.ny.gov