Labor
At recent conferences on agricultural labor, business management, and tax strategy, I’ve heard inspiring stories from producers, advisors, and industry leaders about farm growth, innovation, and bringing new people into farming. These discussions focused on practical steps for long-term success and supporting both new and expanding operations.
One reoccurring topic, however, surfaced repeatedly and raised some red flags: the use of volunteers on farms.
While the offer of free help may seem like a win, especially when operating on razor thin margins and time constraints, it can create serious legal and financial risks for farming operations.
Ohio and federal laws are clear: generally, for-profit businesses cannot rely on volunteers or “free labor.” Even if the individual willingly offers their free time without pay or signs a written agreement stating they expect no compensation, such arrangements do not override the law.
What the Law Says
The U.S. Department of Labor (“DOL”) enforces the Fair Labor Standards Act (“FLSA”), which establishes key protections including minimum wage, overtime pay, and related standards for workers.
The FLSA defines “employ” very broadly as “to suffer or permit to work.” This expansive wording is often seen as deliberate, designed to extend coverage to as many workers as possible under the law’s protections.
That said, the FLSA is clear that genuine volunteers are not employees. However, this volunteer exception applies only under specific circumstances and to certain types of organizations. Individuals may freely donate their time to public service, religious, or non-profit organizations.
By contrast, the FLSA generally prohibits individuals from providing “volunteer” services to for-profit businesses. The DOL explains that the ultimate goal of a for-profit business is to make a profit and the law will not allow those types of organizations to exploit volunteers, or free labor.
Non-profit, public service, and religious organizations, on the other hand, are not driven by profit but by a beneficial purpose for the public. For this reason, the law will allow those organizations to utilize volunteers.
There are only narrow circumstances in which a for-profit business may utilize volunteers, and those typically arise when the business sponsors or hosts a public service or charitable event. In such cases, individuals may donate their time to advance the public, religious, or humanitarian purpose, provided the activity does not result in a financial or commercial benefit to the business.
Key Risks of Misclassifying “Volunteers”
- Workers’ Compensation and Liability Issues. If a “volunteer” is injured while working on the farm, they may be left with significant and unexpected medical expenses. As those costs begin to accumulate, the injured “volunteer” may start to explore what legal options are available to help ease the financial burden of their good deed.
After a quick online search, the injured “volunteer” may choose to file a workers’ compensation claim hoping that, after an investigation and any necessary hearings, the Ohio Bureau of Workers’ Compensation (“BWC”) and the Ohio Industrial Commission determine the volunteer was misclassified and should have been treated as an employee. If that finding is made, the BWC may provide coverage to the injured worker, and then seek reimbursement from the farm for costs such as medical expenses, lost wages, and unpaid premiums.
Additionally, a farm general liability policy may not cover claims involving misclassified workers or other employment-related disputes. Most policies exclude injuries sustained by individuals who qualify as employees because those claims are typically addressed through workers’ compensation. If a worker is ultimately deemed to be an employee, the situation likely reverts to the scenario described above, or the farm may find itself in court arguing that the injured “volunteer” does not meet the legal definition of an employee. Furthermore, most policies have an “intentional acts” exclusion and if the insurance provider finds that misclassification was deliberate or part of a fraudulent effort to avoid employer obligations, coverage is most likely not going to exist.
- Wage and Hour Violations. If a former “volunteer” later asserts they should have been compensated, whether following a personal dispute with the farm owner or after sustaining an injury, the DOL or a court may reclassify that individual as an employee. Such a determination can expose the farm to liability for back wages, unpaid overtime (where applicable), interest, civil penalties, attorneys’ fees, and, in more serious situations, potential criminal penalties.
- Tax and Payroll Non-Compliance. Employees give rise to payroll tax obligations, including Social Security, Medicare, and unemployment insurance. Failure to properly withhold and remit these taxes can result in state and federal tax audits, penalties, and potential personal liability for the farm business.
The Bottom Line
What may seem like generous community support can quickly turn into a costly liability. The goodwill behind a “volunteer’s” intentions does not override the law’s protections for workers. And, practically speaking, when circumstances deteriorate, individuals facing financial strain are far more likely to raise these issues when they feel they have little left to lose.
In most cases, the prudent path is clear: for-profit farms cannot rely on volunteers. Protecting your operation from unnecessary legal and financial headaches is worth far more than short-term “free” labor and helps lay a stronger foundation for long-term growth and stability.
Tags: FLSA, Ag Labor, Ag Law, Volunteers on the Farm, Volunteer, Fair Labor Standards Act, Agricultural Labor, Agricultural Employment
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Earlier today, the U.S. Department of Labor (“DOL”) announced a proposed rule intended to provide greater clarity for both workers and employers on how to determine whether a worker should be classified as an independent contractor or an employee under the Fair Labor Standards Act (“FLSA”) and other related laws.
Issued on February 26, 2026, the proposal – titled “Employee or Independent Contractor Status Under the Fair Labor Standards Act, Family and Medical Leave Act, and Migrant and Seasonal Agricultural Worker Protection Act” – would rescind the Biden era rule (the “2024 Rule”) and replace it with a framework very similar to what we saw adopted in 2021 during the first Trump administration (the “2021 Rule”).
Level One: Ancient Origins
Under the FLSA, the central question in determining worker classification is whether the individual is economically dependent on the operation, indicating employee status, or is truly “in business for themselves,” which supports independent contractor status. This distinction matters because workers classified as employees are entitled to FLSA protections, including minimum wage and overtime requirements.
While agricultural employers may benefit from certain exemptions under the FLSA, the analysis does not end there. Many state labor laws look to the FLSA’s definition of “employee” when deciding whether their own wage and hour protections apply. In some cases, state laws impose broader requirements and offer greater protections than federal law. Independent contractors, by contrast, are not covered by FLSA wage and hour protections and generally exempt from state labor law requirements.
Classification of a worker is vitally important because misclassification can come with harsh consequences. If misclassification is discovered, whether through a DOL investigation, a worker complaint, or a lawsuit, the employer may be required to pay back wages, civil money penalties imposed by the DOL, and any attorneys’ fees and court costs should the matter end up in litigation. Beyond wage-and-hour issues, misclassification can trigger additional liability under other federal and state laws. This might include civil claims for unpaid payroll taxes, unemployment insurance contributions, or workers’ compensation violations, as well as potential criminal penalties in extreme cases of willful or repeated noncompliance.
Level Two: Trial by Fire
As originally enacted, the FLSA does not lay out a precise test for distinguishing an employee from an independent contractor. Over time, the DOL looked to the courts to develop a workable standard for making such determinations. Through those decisions, the “economic realities test” emerged and became the framework for evaluating whether a worker should be classified as an employee or independent contractor.
The economic realities test is a “totality of the circumstances” approach, meaning that no single factor controls the outcome. Instead, all relevant factors must be considered and weighed together to assess the true nature of the working relationship. Those factors include:
- The nature and degree of control;
- The individual’s opportunity for profit or loss;
- The permanency of the work relationship;
- Whether the work being performed is an integral part of the employer’s business;
- The worker’s investment in facilities and equipment; and
- Skill and initiative.
For decades courts and the DOL have applied these factors, or slight variations of them, to determine worker status under the FLSA. Over time, however, application of the test varied across jurisdictions, with some courts placing greater emphasis on certain factors than others. This inconsistency led to differing and inconsistent interpretations of worker classification around the country.
Level Three: The 2021 Rulebook Rewrite
In 2021, the DOL attempted to address the inconsistent and often subjective application of the economic realities test by issuing a formal independent contractor rule. This 2021 Rule marked the agency’s first effort to create a more standardized framework for distinguishing between employees and independent contractors.
The 2021 Rule used a variation of the economic realities test but explicitly gave greater probative value to “two core factors.” The two core factors are:
- The nature and degree of control over the work; and
- The individual’s opportunity for profit or loss.
The Department did not eliminate the other factors of the economic realities test; those factors remained part of the analytical framework under the 2021 Rule. However, the DOL did determine that the two “core factors” carried the most weight when determining whether an individual is economically dependent on an employer. The DOL further explained that when both core factors pointed toward the same classification, there was a “substantial likelihood” that the resulting classification was the correct classification.
Level Four: The 2024 Reset
In early 2024, the DOL published another rule, repealing the 2021 Rule and reverting back to a totality of the circumstances analysis of the economic realities test in which there are no core factors, and all factors are weighed evenly. The 2024 Rule went into effect on March 11, 2024.
Level Five: 2026 Counterattack
The latest proposed rule would reinstate the framework of the 2021 Rule, with several targeted adjustments designed to provide clearer guidance and promote more consistent interpretation/application of the test. The stated goal is to reduce uncertainty and, in turn, lower the risk of misclassification claims or enforcement actions that can disrupt day-to-day operations.
In addition to reinstating and slightly modifying the 2021 Rule, the proposal would also apply the independent contractor analysis to the Family and Medical Leave Act (“FMLA”) and the Migrant and Seasonal Agricultural Worker Protection Act (“MSPA”), each relying on the FLSA’s definition of “employ.”
In its proposal, the DOL explained that the 2024 Rule failed “to provide effective guidance on how different factors in its multi-factor balancing test should be weighed or applied together.” The DOL contends that it’s two core factor economic realities test is just a result of decades and decades of case law. The Department indicates that after reviewing numerous judicial decisions, “the Department determined that courts tended to focus on two economic reality factors – control and the opportunity for profit or loss.” Thus, the DOL determined that in effect, judges were giving greater weight to these two factors to determine a worker’s classification under the FLSA.
However, the DOL emphasizes that even when the two core factors point toward the same classification they are not “controlling.” Their combined weight may still be outweighed by other considerations, making it “necessary to consider both [core and non-core] factors.” In short, the test that the DOL seeks to readopt is not intended to be applied “in a mechanical way that precludes consideration of all relevant facts and factors.”
Some other modifications proposed by this new rule include:
- Clarification on how an employee’s economic dependence on an employer differs from the relationship between independent businesses working together.
- Highlighting that worker classification hinges on dependence for the work, not on how much money the worker makes.
- Modifying the real-world examples used to apply the proposed 2026 framework to avoid potential ambiguity in the law; and
- Emphasis on the fact that the actual practice of the worker and potential employer is more relevant than what may be contractually or theoretically possible.
You can read the proposed rule here.
Boss Level Unlocked: Power Up with Public Comment
Ever wished you could help shape the rulebook? Well, now’s your chance!
The proposed rule kicks off a 60-day public comment period, closing April 28, 2026. You can submit a comment on the proposed rule to help provide greater clarity or protections for your specific industry or area of interest.
You might be wondering, “Can my comment really make a difference?” The answer: absolutely! Agencies are required to consider all substantive comments, and those that are unique, evidence-based, and grounded in real-world experiences are far more likely to influence the final rule than generic statements along the lines of “this is good” or “this is bad.”
If you have noticed gaps or issues that the DOL has not addressed in this proposal, now is the perfect time to bring them to light. Don’t miss the opportunity to make your voice heard, you never know, your input could truly change the law!
Comments can be submitted at https://www.regulations.gov (Docket No. WHD-2026-0001). Once comments are closed, the DOL will review and consider those comments, make any final modifications, and publish the final rule.
As always, as we learn more about this proposed rule and any final rule, we will keep you up to date.
Tags: FLSA, Independent Contractor, Department of Labor, DOL, Fair Labor Standards Act, Employee, Worker Classification
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By: David L. Marrison, Field Specialist, Farm Management, Barry Ward, Director of the OSU Income Tax Schools and Jeff Lewis, Attorney and Program Coordinator- OSU Extension.
It is tax season! With tax returns set to be accepted by the IRS starting January 26 it is crucial for individuals and businesses to stay on top of important tax reporting deadlines. This is especially important this year due to the passage of the One Big Beautiful Bill Act (OBBBA) last July. This legislation significantly affects federal taxes, credits and deductions. Some of these provisions took effect in 2025 while others in 2026.
One of the important tax reporting areas to review in January are the guidelines and deadlines for 1099 forms. These 1099 forms, which report various types of non-wage income, need to be furnished to taxpayers by January 31. Additionally, copies also need to be sent to the IRS by the January 31st deadline (with a few exceptions) to avoid penalties and to ensure timely processing of tax returns.
This article will provide an overview of 1099 forms, highlighting the specifics of the 1099-NEC, 1099-MISC, and 1099-K forms. Additionally, we will share reporting deadlines, penalties for non-reporting, provide resource links from the IRS, and changes to the 1099 forms due to OBBBA. So, let’s dive in!
What is a 1099 Information Return?
A 1099 form is an information return used by businesses, financial institutions, and other organizations to report various types of income paid to individuals who are not employees. These forms are typically issued to independent contractors, freelancers, and vendors to report payments made for services rendered, interest earned, dividends, and other income types.
These returns help ensure that individuals and entities report income correctly on their tax returns. There are over 20 different 1099 forms. The major forms which farm families may issue or receive include:
- 1099-NEC Non-employee compensation
- 1099-MISC Miscellaneous income
- 1099-K Third party payment network transactions
- 1099-G Government programs (i.e. ARC/PLC, disaster payment)
- 1099-INT Interest income
- 1099-DIV Dividends and distributions
- 1099-PATR Cooperative distributions
- 1099-S Real estate transaction proceeds
Before Issuing a Form 1099
Before issuing any Form 1099, businesses should first collect a completed Form W‑9 from every vendor, contractor, or service provider they pay in the course of their trade or business. The W‑9 provides essential information such as the vendor’s legal name, business entity type, address, and taxpayer identification number (TIN), all of which are required for accurate 1099 reporting. Ideally, the W‑9 should be obtained before making any payment to ensure the information is correct and to avoid delays during tax season. If a vendor refuses to provide a W‑9 or provides an invalid TIN, the business is required to begin backup withholding, which means withholding 24% of the payment and remitting it to the IRS. Maintaining W‑9s on file for all vendors not only ensures compliance but also protects the business from penalties related to incorrect or missing taxpayer information.
1099-NEC
One of the most common 1099 forms used is the 1099-NEC, which reports payments to non-employees. The form is required to be issued when compensation totaling more than $600 per year is paid to a nonemployee for certain services performed for your business. The $600 amount will increase to $2,000 for payments made after December 31, 2025 (tax year 2026) due to OBBBA. This amount will also be adjusted annually for inflation.
If the following four conditions are met, you must generally report payment for non-employee compensation on Form 1099-NEC:
- You made the payment to someone who is not your employee.
- You made the payment for services for your trade or business (including government agencies and nonprofit organizations).
- You made the payment to an individual, partnership, estate, or in some cases, a corporation.
- You made payments to the payee of at least $600 during the year (or $2,000 beginning in 2026).
Examples of “nonemployee compensation” could include hiring a neighboring farmer to harvest, spray, or plant your crops or independent contractors such as crop consultants, mechanics, accountants, and veterinarians. Payment for parts or materials used to perform the service (if the supplying of the parts or materials was incidental to providing the service) is included in the amount reported as non-employee compensation.
Reporting is needed for payments made to unincorporated businesses (i.e. sole proprietorship or an LLC that has elected to be taxed as a sole proprietor or partnership) for compensation of $600 or greater. Generally, payments to a corporation, or an LLC which has elected to be taxed as a corporation, do not require a 1099-NEC to be issued. Two exceptions, which should be noted, are payments of $600 or greater to an attorney or veterinarian, regardless of business entity (corporation or unincorporated), these payments need to be reported on Form 1099-NEC.
If you are required to file a Form 1099-NEC, you must furnish a statement to the recipient and to the IRS by January 31 of each year or the next business day, if the due date is on a weekend or holiday. For the tax reporting year of 2025, the form is due January 31, 2026.
A form 1099-NEC can be issued even if the payment is below the reporting threshold ($600 for 2025) or is to a party that you are in doubt as to whether you are required to issue this informational return. There are no prohibitions or penalties for doing this.
Previously, business owners would file Form 1099-MISC to report non-employee compensation. As a historical note, Form 1099-NEC was re-introduced in 2020. It was previously used by the IRS until 1982 when the IRS added box 7 to Form 1099-MISC and discontinued the 1099-NEC form. Now, this compensation is listed in Box 1 on Form 1099-NEC.
A reminder that greater scrutiny has been given to the improper classification of an employee as an independent contractor. It is your duty to make sure that you have classified properly. For tax purposes, the IRS provides guidance on making this determination through behavior control, financial control, and the relationship of the parties. Details can be found in IRS publication 1779 located at: https://www.irs.gov/pub/irs-pdf/p1779.pdf
Form 1099-MISC
The Form 1099-MISC is used to report a variety of income payments made to others from your trade or business (not personal). These include, but are not limited to:
- At least $10 in royalties (box 2)
- At least $600 in:
- Rents (box 1)
- Prizes and awards (box 3)
- Medical and health care payments (box 6)
- Crop Insurance proceeds (box 9)
A reminder that the $600 amount will increase to $2,000 for payments made after December 31, 2025 (tax year 2026) due to OBBBA. This amount will also be adjusted annually for inflation. Reporting is needed for payments made to unincorporated businesses (i.e. sole proprietorship or an LLC that has elected to be taxed as a sole proprietor or partnership) for compensation for each reporting threshold ($600 or greater for rents or $10 for royalties). Generally, payments to a corporation, or an LLC which has elected to be taxed as a corporation, do not require 1099-MISC forms to be issued. However, there are exceptions as noted previously.
One question, we receive from farmers is “do I need to issue a 1099 to the landowners which I rent ground from?” As a farmer, if you made payment for services for your trade or business (i.e. your farm business), then you will need to issue a 1099-MISC to landowners who receive $600 or more in land rental payments (in aggregate).
The reporting deadlines for the 1099-MISC forms are a little different than the 1099-NEC. The 1099-MISC must be to the recipient by January 31 (like 1099-NEC) but are not due to the IRS until February 28 for paper copies or March 31 for e-filed returns.
1099-K
The 1099-K form may be a new form for some of our farm managers. Form 1099-K tracks income made from selling goods or providing services via payment apps and online marketplaces. Examples include (but are not limited to) PayPal, Venmo, Square, and eBay.
When such reporting was originally enacted, these third-party payment network transactions only needed to be reported for payees with more than 200 transactions and $20,000 in aggregated payments. The American Rescue Plan Act of 2021 eliminated the transaction requirement entirely and reduced the reporting threshold to $600, with these changes intended to take effect in 2022. The IRS delayed implementation of these changes, most recently stating that it would impose a $2,500 threshold for 2025. OBBA, however, reinstates the $20,000 and 200 transactions thresholds for required reporting, retroactive to 2022. It should be noted that the 1099-K thresholds will not be indexed for inflation.
Payment card companies, payment apps, and online marketplaces are required to fill out Form 1099-K and send it to the taxpayer and to the IRS by January 31. You will receive 1099-K if:
- You take direct payment by credit or bank card for selling goods or providing services. If customers pay directly by credit, debit or gift card, you will receive a Form 1099-K from the payment processor or payment settlement entity, no matter how many payments received or how much they were for.
- A payment app or online marketplace is required to send you a Form 1099-K if the payments received for goods or services total more than 200 transactions and $20,000 in aggregated payments (per OBBBA).
Whether or not you receive a Form 1099-K, you must still report any income from these types of transactions on your tax return. If you accept payments on different platforms, you could get more than one Form 1099-K. Personal payments from family and friends should not be reported on Form 1099-K because they are not payments for goods or services.
Penalties
If you fail to file the correct information return by the due date (to the IRS and/or taxpayer) and cannot show reasonable cause, you may be subject to a penalty. Penalties are changed for each information return which isn’t filed to the IRS on time and to each payee (a penalty for each). These penalties can range from $60 to $660 depending on the number of days on which the filing is late. Additional penalties can also be assessed for intentional disregard. Interest is also charged. More details can be obtained at: https://www.irs.gov/payments/information-return-penalties
Additional Information
A few additional pointers about 1099 information returns include:
- A crucial point to remember is that all income received for goods and services is still considered taxable income and must be reported on your tax return, even if you don't receive a 1099 form.
- Starting in tax year 2023, if you have 10 or more information returns, you must file them electronically. Electronic copies can be submitted through the IRIS Taxpayer Portal at http://irs.gov/iris or through a third-party software provider.
- For authoritative guidance, individuals and businesses should consult the IRS website or a qualified tax professional to ensure proper compliance.
IRS Resources:
The following resources are available from the IRS with regard to the information returns discussed in this article.
Publication 1220: https://www.irs.gov/pub/irs-pdf/p1220.pdf
1099-NEC: https://www.irs.gov/forms-pubs/about-form-1099-nec
1099-MISC: https://www.irs.gov/forms-pubs/about-form-1099-misc
1099-K: https://www.irs.gov/businesses/understanding-your-form-1099-k
1099 Penalties: https://www.irs.gov/payments/information-return-penalties
Disclaimer:
The information provided in this article is for educational purposes. This article was designed to provide accurate tax education information. Farm managers are encouraged to seek the assistance of qualified tax professionals with the completion of their taxes.
A trio of senate bills related to agriculture were introduced in the Ohio General Assembly this month. The bills touch on a variety of topics, from CAUV recoupment charges, to training an agricultural workforce, to creating a state food and agriculture policy council.
Senate Bill 285, available here, was introduced by Senator Tim Schaffer (R-Lancaster) on October 8 and referred to the Senate Ways and Means Committee. The bill would exempt certain conservation uses from recoupment charges when land is converted from an agricultural use. Typically, if agricultural land is converted to another use, it is subject to a recoupment charge equal to the previous three years of tax savings it received because it was valued using its current agricultural use value (CAUV). SB 285 would not require a recoupment charge to be paid if the agricultural land is acquired by a conservation organization and is used for certain environmental response projects related to water quality or wetlands, or if it is used for an H2Ohio water project. That being said, if the land ceases to be used for conservation, recoupment charges would apply. SB 285 had its first hearing in the Senate Ways and Means Committee on October 28.
Sponsored by Senator Paula Hicks-Hudson (D-Toledo), SB 287, entitled “Farming And Workforce” was introduced on October 8, and had its first hearing in the Senate Finance Committee on October 28. The bill, which is available here, would create the Farming and Workforce Development Program. This program would provide training for Ohio residents between 16 and 35 years of age to prepare them for employment in seasonal crop farming. The program would not exclude people who have been convicted or pled guilty to a felony from eligibility. The bill would require Ohio State University Extension and Central State University Extension to develop guidelines and policies for the application process, coursework, and running of the Farming and Workforce Development Program, and would appropriate $500,000 from the state general revenue fund to get the program started.
Finally, Senate Bill 288 was also introduced on October 8. Also sponsored by Senator Hicks-Hudson, the bill, available here, would create the Ohio Food and Agriculture Policy Council. The Council would be tasked with making recommendations to the General Assembly that strengthen Ohio’s food and farm economies, engaging in advocacy, education, and policy work for the health of Ohio’s citizens and the sustainability of the state’s natural resources. Specifically, the Council would be charged with delivering an annual report to the General Assembly detailing its recommendations on:
- Food security;
- Food access;
- Food production and distribution;
- Food waste;
- Economic development;
- Food procurement;
- Food chain workers; and
- Food systems resilience.
The Council would be housed under the Ohio Department of Agriculture (ODA). The Director of ODA would serve on the council, as well as the following members, who would be appointed by the Governor:
- One member who is a representative of the Ohio Hospital Association;
- One member from Ohio State University Extension;
- One member from Central State University Extension;
- Three members from Ohio Farm Bureau;
- One member who represents urban farming;
- One member who represents rural farming;
- One member who represents statewide food banks; and
- One member who is a registered lobbyist representing Ohio Cooperatives.
Senate Bill 288 would appropriate $500,000 to create the Ohio Food and Agriculture Policy Council and has been referred to the Senate Finance Committee.
Be sure to stay tuned to the Ag Law Blog for continuing updates on Ohio Legislation affecting agriculture!
Tags: Ohio legislation, conservation, H2Ohio
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Running a farm business is no small job. Between planting, harvesting, caring for livestock, and tracking markets, it’s easy to see why labor and employment laws might not be at the top of your list. But the reality is this: every agricultural operation, big or small, needs to pay attention to these rules. Ignoring them can create major headaches down the road.
We often write about labor and employment laws in agriculture, but we don’t always take the time to talk about the why. Why should farm employers care about compliance? The obvious answer is that failing to follow the law can lead to fines, penalties, or even criminal consequences. But there is another side to it: compliance is also about smart risk management. Too often, that part of the conversation gets overlooked.
In this post, we will dig into why labor and employment compliance matters for every farm employer, no matter the size of your operation, the number of workers you hire, or whether your team is made up of family, neighbors, or seasonal help. We will also be using this post to kick off a new series of posts, where we will break down labor and employment laws into bite-sized, practical pieces. The goal is to help Ohio producers understand their obligations and share best practices that can reduce risks and strengthen their businesses.
Compliance = Risk Management
As we have mentioned before, ignoring labor and employment laws can bring direct legal consequences. But there is another side to compliance that deserves attention: risk management.
Fun fact: not every federal or state labor law applies to every employer. Many laws have size thresholds or exceptions/exemptions for certain types of employers. For example, the federal Americans with Disabilities Act (ADA) only applies to employers with 15 or more employees. Similarly, Ohio’s anti-discrimination law generally applies to employers with four or more employees.
So, what about a small farm with three or fewer workers? Technically, some of these anti-discrimination rules do not apply. But that does not mean you are off the hook completely. A job applicant or employee who feels they were treated unfairly because of their race, sex, age, disability, religion, national origin, or military status can still file a complaint with the Ohio Civil Rights Commission. Even if the farm is ultimately found not liable, the process of defending against a claim costs time, money, and stress. And in a close-knit farming community, just the perception of discrimination can damage relationships with workers, customers, and neighbors.
There is also the bigger challenge many producers face: finding and keeping a reliable workforce. Workers are more likely to stay, and return season after season, when they feel respected, treated fairly, and confident that their employer is following good practices. Compliance is not just about avoiding penalties; it’s about building a safe, fair workplace that encourages loyalty and productivity.
We have focused here on discrimination laws as an example, but the same principle applies across the board. Many labor laws including wage and hour rules, harassment policies, and safety standards may or may not apply to a particular farm depending on its size or structure. Still, choosing to follow these standards can pay off. Voluntarily adopting recognized best practices provides a layer of protection if disputes arise, shows foresight if laws change, and helps resolve workplace issues before they turn into legal claims.
At the end of the day, following labor and employment laws, even when they do not technically apply, is a smart risk management strategy. It helps farms keep good workers, avoid conflicts, and maintain their reputation as fair, responsible employers. And those benefits can be just as valuable as steering clear of legal penalties.
“Employing” Family Members
As we mentioned earlier, this post kicks off a new blog series for Ohio farm employers on labor and employment law. Our goal is to clear up misconceptions, highlight common assumptions, and break down technicalities in the law so that employers can re-evaluate their practices, stay compliant, and avoid costly headaches.
Our first topic: employing family members.
Many Ohio farms are family-owned and operated, which means it is common to see relatives working side by side. Depending on who you ask, that can be a wonderful experience - or a recipe for disaster. What farmers need to understand, though, is that in most cases, family members are still considered employees.
Yes, there are exceptions depending on the structure of the business, and some family members may be exempt from certain wage or tax requirements. But generally speaking, employing family does not mean you are off the hook for employment law compliance. For example, in Ohio, even one employee triggers the requirement to carry workers’ compensation coverage. Federally, employers typically need to issue a W-2 to family employees. Blood or marriage ties do not erase those obligations.
So, does every farm follow these rules to the letter? Realistically, no. Many well-intentioned family operations are not fully compliant with all applicable labor and employment laws. Why? Two main reasons:
- Limited enforcement. Governmental agencies responsible for enforcing labor and employment laws do not have the resources to audit or investigate every farm. But if you “win” the audit lottery, you will be expected to demonstrate compliance.
- Few complaints. Issues often do not come to light unless a worker files a lawsuit or complaint. And while many assume a family member would never sue, that is not a guarantee. Anyone who has seen family disagreements knows how quickly emotions can escalate.
That is why it is risky to assume family employees are somehow “different.” A dispute between relatives can turn into a legal problem just like any other workplace conflict. Treating family workers with the same seriousness as non-family employees is the best way to protect your farm, your business, and yes - even your family relationships.
Conclusion
In truth, labor and employment compliance might never become an issue on your farm. But as the old saying goes, “never say never.” Following these laws is not just about avoiding penalties – it is also a smart risk management strategy. Compliance can help prevent or quickly resolve disputes that drain time, energy, and already thin margins. Just as importantly, it brings peace of mind, clarity, and stability – intangibles that can be some of your farm’s most valuable assets.
Tags: employment law, Ag Labor, Labor & Employment Law, Hiring Family Members, Ohio Employment Law, Agriculture, Agricultural Law
Comments: 0
Join us on Friday, September 12 at 10:00 a.m. for an informative webinar on the H-2A program. We will focus on how traditional farming operations can use H-2A to supplement their labor needs. While H-2A is commonly used by labor-intensive operations such as fruit, vegetable, and nurseries, it can also be a valuable option for grain and livestock operations.
During the webinar, we will cover the current state of agricultural labor in Ohio and the United States, how H-2A can address labor shortages for traditional farming operations, and the requirements of the program. Our panel of experts will include:
- Margaret Jodlowski, Assistant Professor, Agricultural, Environmental, and Development Economics, The Ohio State University
- Jeff Lewis, Attorney, OSU Agricultural and Resource Law Program
- Robert Moore, Attorney, OSU Agricultural and Resource Law Program
- Representative from the U.S. Department of Labor
Free registration is available here: https://osu.zoom.us/webinar/register/WN__s5bd8oKQ3K0vLiTYuqSug
For more information, contact Robert Moore at moore.301@osu.edu
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Federal lawmakers have once again sparked debate over increasing the federal minimum wage, which has remained at $7.25 per hour since 2009. While many farmworkers are exempt from the federal minimum wage under the Fair Labor Standards Act (“FLSA”), a potential increase could still create significant ripple effects throughout the agricultural sector.
Earlier this month, Senators Josh Hawley (R-Mo.) and Peter Welch (D-Vt.) introduced the Higher Wages for American Workers Act, a bipartisan proposal that would raise the federal minimum wage to $15 per hour and index future increases to inflation.
Although agricultural employers in Ohio are generally exempt from federal minimum wage requirements, the reemergence of federal wage legislation presents a timely opportunity to revisit those exemptions and clarify what minimum wage obligations may apply to farm employers under both federal and state law.
Federal Agricultural Exemptions
Under the FLSA, agricultural employers are not required to pay the federal minimum wage to certain employees if one or more of the following conditions apply:
- Small Farm Exemption: The employer did not use more than 500 man-days of agricultural labor in any calendar quarter of the previous year.
- Family Member Exemption: The employee is the parent, spouse, child, or another immediate family member of the employer.
- Hand-Harvest Laborer Exemption: The employee:
- is employed as a hand-harvest laborer,
- is paid on a piece-rate basis,
- commutes daily from their permanent residence, and
- was employed in agriculture for fewer than 13 weeks during the previous calendar year.
- Youth Hand-Harvest Exemption: The employee is:
- 16 years old or younger,
- employed as a hand-harvest laborer,
- paid on a piece-rate basis,
- working on the same farm as their parent or legal guardian, and
- receiving the same piece-rate wage as employees over age 16.
- Range Production Exemption: The employee is engaged in the range production of livestock.
Understanding the 500 Man-Days Threshold
The “man-day” exemption is intended to relieve small or family-operated farms from federal minimum wage requirements. A “man-day” is any day in which an employee performs at least one hour of agricultural labor. The total number of hours worked is irrelevant, working just one hour still constitutes a full man-day.
To determine whether an employer meets the exemption, all workers across all operations owned or managed by the same farmer must be included in the calculation. For example, if one employee works a single hour on Monday and two others work an hour each on Tuesday, the farm accumulates three man-days across those two days. The FLSA sets the threshold at 500 man-days per calendar quarter, which is roughly equal to employing seven employees for five days a week over a 13-week quarter. Importantly, all categories of labor—full-time, part-time, seasonal, and temporary—count toward the total.
Family Member Exemption Clarified
Agricultural employers are not required to pay the federal minimum wage to certain immediate family members engaged in agricultural labor. The Department of Labor defines "immediate family" for this purpose to include parents, spouses, children, stepchildren, stepparents, foster children, and foster parents.
However, more distant relatives, such as siblings, cousins, nieces, nephews, and in-laws—do not qualify for the exemption, even if they live in the same household. These individuals must be treated as regular employees and may be subject to minimum wage and hour requirements.
State Minimum Wage Considerations
In addition to federal law, employers must comply with state wage laws. When state and federal minimum wage laws conflict, employers must follow the law that is more protective of the employee, typically, the law with the higher minimum wage.
In Ohio, the state minimum wage is higher than the federal rate, and most employers are required to pay the state minimum. However, Ohio law includes exemptions that mirror federal law and allows certain agricultural employers to pay less than the state minimum wage if they qualify under those exemptions.
This alignment between state and federal law means that many Ohio farm employers remain exempt from both wage requirements—especially small farms and family-run operations. But this is not the case in all states. For example, California and Washington require that all agricultural workers be paid the state minimum wage, regardless of whether they qualify for a federal exemption.
Who is Considered an Agricultural Employee?
Both federal and Ohio law define “agriculture” broadly to include a wide range of farming activities. The legal definition encompasses the cultivation and tillage of soil, dairying, growing and harvesting of agricultural or horticultural commodities, and the raising of livestock, bees, fur-bearing animals, or poultry. It also includes related tasks performed by a farmer or on a farm in connection with these activities, such as preparing goods for market or transporting them to storage or distribution.
This definition divides agricultural work into two main categories:
- Primary agriculture, which includes traditional farming activities like planting, growing, and harvesting crops or raising livestock.
- Secondary agriculture, which covers work that supports or is incidental to primary agriculture—for example, servicing equipment used on the farm or applying pesticides via aircraft.
Employees engaged in either primary or secondary agricultural activities are generally classified as agricultural employees and may fall within the FLSA exemptions described above.
Agritourism and Value-Added Activities: A Different Category
Classification becomes more complicated when farm operations expand beyond traditional agriculture by engaging in agritourism or producing value-added products.
Employees who work in agritourism, such as operating a corn maze, staffing a farm store, managing event rentals, or leading educational tours, are typically not considered agricultural employees under federal or Ohio law. Because their work is commercial or recreational rather than agricultural in nature, they do not qualify for agricultural labor exemptions and are therefore entitled to full wage and hour protections, including minimum wage and overtime.
Similarly, employees involved in processing agricultural products may also fall outside the scope of the agricultural exemption, depending on the nature and extent of the processing. These workers may be treated as employees in a manufacturing or commercial enterprise and must be compensated accordingly.
Conclusion.
While federal and Ohio laws provide specific exemptions from minimum wage requirements for agricultural employers, the application of these exemptions depends on several nuanced factors—including the nature of the work performed, the size and structure of the farming operation, and the relationship between the employer and employee. As farms continue to diversify through agritourism and value-added ventures, employers must be mindful that not all workers will qualify for agricultural exemptions. Understanding the distinction between agricultural and non-agricultural labor is essential to ensuring compliance with both federal and state wage laws and avoiding potential liability. As legislative efforts to raise the federal minimum wage continue, now is an opportune time for agricultural employers to review their labor practices and clarify their wage obligations under the law.
The classification of workers as either independent contractors or employees has once again become a focal point of federal labor policy, reflecting the broader ideological shifts that accompany changes in presidential administrations. With the transition to new leadership in the White House, the U.S. Department of Labor (“DOL”) has issued new guidance that redefines the criteria used to determine worker status. This latest interpretation marks a departure from the 2024 Democratic rule (the “2024 Rule”), instead embracing a model more consistent with prior Republican approaches. The change has significant ripple effects for employers and workers as it influences everything from wage protections to benefits eligibility and legal liability.
On May 1, 2025, the DOL’s Wage and Hour Division (“WHD”) issued Field Assistance Bulletin No. 2025-1(the “2025 Bulletin”), offering updated guidance on how to assess whether a worker qualifies as an employee or independent contractor under the Fair Labor Standards Act (“FLSA”).
The 2025 Bulletin explicitly states that the WHD will no longer apply the analytical framework established by the 2024 Rule when evaluating worker classification under the FLSA. Instead, the WHD will rely on the standards set forth in Fact Sheet #13 (July 2008) and Opinion Letter FLSA2019-6 (referred to as the “2008 Guidance” and “2019 Guidance,” respectively). However, the 2025 Bulletin clarifies that the 2024 Rule remains applicable in the context of private litigation.
The History of the Independent Contractor Revolving Door
The 2025 Guidance marks the latest development in a long-running pattern of revolving labor policy, reflecting the political priorities of successive presidential administrations. The 2024 Rule had previously replaced the Trump Administration’s 2021 Rule (the “2021 Rule”), which aimed to simplify the employee-versus-independent contractor analysis under the FLSA. The 2021 Rule emphasized two “core factors” of the traditional multifactor economic realities test: (1) the nature and degree of control over the work, and (2) the worker’s opportunity for profit or loss. By prioritizing these elements, the Trump-era rule created a more employer-friendly framework that often favored independent contractor classification.
The 2024 Rule reinstated the “totality of the circumstances” approach to the economic realities test, treating all factors with equal weight rather than prioritizing any single one. By doing so, the WHD assessed worker classification by holistically evaluating all six factors of the test. This broader, more balanced analysis often leaned toward classifying workers as employees, particularly in cases where multiple factors pointed to economic dependence on the employer.
While the Trump Administration previously issued a rule emphasizing a two “core factors” approach to worker classification, neither the 2025 Bulletin nor the 2008 and 2019 Guidance documents it references adopt that framework explicitly. Instead, the 2025 Bulletin affirms the DOL’s departure from the Biden-era 2024 Rule and suggests that additional rulemaking may be forthcoming, signaling continued evolution in the DOL’s enforcement strategy.
DOL Enforcement v. Private Litigation
It’s essential to understand the scope of the 2025 Bulletin’s applicability. As previously discussed, the 2025 Bulletin eliminates the use of the 2024 Rule in WHD investigations and classifications, even though that rule remains effective in private litigation. The distinction between these two contexts – WHD investigations and private lawsuits – centers on who initiates the action, the underlying purpose, and the legal procedures involved.
WHD Investigation
- Initiated by: The U.S. Department of Labor’s Wage and Hour Division
- Purpose: To enforce federal labor laws, such as the FLSA, by ensuring employers comply with minimum wage, overtime, and classification rules.
- Process: WHD investigators may conduct audits, review payroll records, and interview employees. These investigations can be random, complaint-driven, or targeted based on industry trends.
- Outcome: If violations are found, the WHD may seek back wages, penalties, or require changes in employment practices. Employers can settle disputes administratively without going to court.
Private Litigation
- Initiated by: An individual worker or group of workers
- Purpose: To seek compensation for alleged violations of labor laws, such as unpaid wages or misclassification.
- Process: The case is filed in court, and both parties engage in litigation, which may include discovery, motions, and potentially a trial.
- Outcome: A judge or jury determines liability and damages. The court may award back pay, liquidated damages, attorney’s fees, and other relief.
Practical Implications
For private employment matters, employers should continue to follow the 2024 Rule, as it remains the governing standard in litigation. The 2025 Bulletin applies only in the context of WHD investigations. While future rulemaking could align the DOL’s position more closely with the 2021 Rule – potentially establishing a new nationwide standard – it is essential for employers to stay informed about ongoing developments relating to worker classification. Misclassifying a worker, even unintentionally, can lead to significant financial penalties under both federal and state laws and may jeopardize the long-term stability of your business.
(Side note: Adding to the complexity of this situation is the U.S. Supreme Court’s recent decision in Loper Bright Enterprises v. Raimondo, which overturned the Chevron doctrine and could have far-reaching implications for how the DOL approaches worker classification. However, the full impact of that ruling warrants a deeper discussion – one best served for a future blog post.)
For more information on the 2024 Rule and worker classification, check out our previous blog post here.
Tags: FLSA, Independent Contractor, Worker Classification, Employee, labor, employment, Ag Labor
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On April 9, 2025, the Ohio House of Representatives passed its version of the state’s biennial budget, also known as House Bill 96, which introduces substantial revisions to Ohio’s pesticide application laws. These updates aim to bring the state into closer alignment with current federal regulations and carry significant implications—particularly for family farms that involve youth workers. As the school year ends and more minors begin working regularly on farms, the timing of these proposed changes raises concerns about how they may limit the roles young people can legally perform—especially when it comes to pesticide-related tasks.
Changes on the Horizon?
One of the most notable changes is the proposed restriction that only licensed commercial or private pesticide applicators may “use” Restricted Use Pesticides (“RUPs”). This would eliminate the previous allowance for trained service persons, immediate family members, or employees to apply RUPs under the direct supervision of a licensed applicator.
Additionally, House Bill 96 expands the definition of “use” of RUPs to include not only the act of application but also:
- Pre-application activities such as mixing and loading;
- The application itself, performed by a licensed commercial or private applicator;
- Other pesticide-related tasks, including transporting or storing opened containers, cleaning equipment, and disposing of leftover pesticides, spray mixtures, rinse water, containers, or any materials containing pesticides.
The bill makes clear that no individual may use RUPs unless they are properly licensed under Ohio law, reinforcing the importance of formal certification for anyone involved in pesticide handling.
What Does this Mean for Youth on the Farm?
Under current Ohio law, immediate family members—including minors—are permitted to apply RUPs as long as they are under the direct supervision of a licensed applicator. For years, agricultural families have relied on this exemption to allow youth to assist with farm duties involving pesticide use. However, the proposed changes in House Bill 96 would eliminate this exception by requiring that anyone handling RUPs be individually licensed. Because Ohio law mandates that pesticide applicators be at least 18 years old, minors would no longer be permitted to perform any pesticide-related tasks, even under direct supervision. Of course, this provision is not just geared toward youth on the farm—it also affects employees and trained service persons who previously operated under a licensed applicator’s supervision. If the proposed changes go through, a violation of the law could result in significant civil penalties.
Given the proposed changes in House Bill 96, it’s an appropriate time to take a broader look at the full range of youth labor regulations that apply to farm work. While pesticide use is just one area impacted by legal restrictions, there are numerous federal and state laws that govern what tasks minors can perform, what equipment they can operate, and how many hours they can legally work—especially during the school year versus summer months. These rules can vary based on the age of the minor and their relationship to the farm owner. With regulatory changes potentially tightening in one area, it’s essential for farm families and employers to ensure they are in compliance across the board to avoid penalties and ensure safe, lawful participation of youth in agricultural work. Read more about employing youth on the farm here.
Next Steps
Farm families and employers should begin preparing for the upcoming changes to Ohio’s pesticide rules. While these changes aren't law yet—they won’t take effect until the Governor signs the bill—they are needed to align Ohio’s regulations with federal law. If Ohio wants to keep its authority to enforce the Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA"), these updates are a forgone conclusion.
To review the specific pesticide-related provisions in House Bill 96, begin on page 903 of the bill text. Alternatively, for an overview of the proposed budget and potential changes, you can consult the summary prepared by the Ohio Legislative Service Commission.
Tags: pesticides, restricted use pesticides, youth labor, Labor and Employment, minors on the farm, pesticides and minors.
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On April 9, 2025, Ohio enacted House Bill 106, known as the Pay Stub Protection Act. This bipartisan legislation marks a meaningful step forward in promoting wage transparency and safeguarding worker rights across the state. Prior to this law, Ohio stood out as one of the few states without a mandate for employers to issue pay stubs. With its passage, the Act now ensures employees are provided with comprehensive earnings statements, bringing Ohio in line with the practices of most other states.
What the Law Requires
Under the Pay Stub Protection Act (codified in Ohio Revised Code Section 4113.14), employers are now mandated to provide each employee with a written or electronic pay statement on every regular payday. These statements must include:
- Employee’s name and address;
- Employer’s name;
- Total gross wages earned by the employee during the pay period;
- Total net wages paid to employee for the pay period;
- An itemized list of additions to or deductions from wages paid to the employee, with explanations; and
- The date the employee was paid and the pay period covered by that payment.
For hourly employees, the following three additional items are also required:
- Total hours worked during the pay period;
- Hourly wage rate; and
- Total number of hours worked beyond 40 hours in a workweek.
Enforcement
While the Pay Stub Protection Act brings Ohio in line with the majority of states regarding wage transparency, it differs from some by not granting employees the right to sue or seek monetary compensation for an employer’s noncompliance. If an employee does not receive a pay stub that meets the Act’s requirements, they must first submit a written request to their employer for a compliant pay stub. The employer then has 10 days to provide the required statement.
If the employer fails to respond within that timeframe, the employee may report the violation to the Ohio Department of Commerce. Should the Department find a violation, it will issue a written notice to the employer. The employer is then required to post the notice in a conspicuous location on the premises for a period of 10 days.
Implications for Employers
Although many employers already issue pay stubs as a matter of best practice, Ohio law now makes it a legal requirement. This change presents an opportunity for employers to review their payroll systems and make any necessary updates to ensure compliance. Employers should confirm that their pay statements contain all required information and that any third-party payroll providers are also adhering to the new standards.
A Step Toward Greater Transparency
The Pay Stub Protection Act marks a meaningful step forward for worker rights in Ohio. By requiring detailed pay statements, the law equips employees with the information necessary to confirm their earnings and promotes greater transparency and fairness in the workplace.
For additional details about the Pay Stub Protection Act and its requirements, refer to the official legislative text of House Bill 106 or visit the Ohio Department of Commerce’s website.
Tags: Ohio Law, Pay Stub Protection Act, Agricultural Labor, Ag Labor, Farm Labor
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