Fair Labor Standards Act
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As originally enacted, the FLSA does not lay out a precise test for distinguishing an employee from an independent contractor.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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As 2021 winds down, it is always good to plan for the new year. Part of that planning includes making sure, as an employer, you are compliant with any updates to current law as we turn the calendars to 2022. One law that is changing next year, is Ohio’s minimum wage law. Beginning January 1, 2022, the Ohio minimum wage will rise to $9.30, up from the current $8.80, for non-tipped employees. However, as an agricultural employer, the law provides some exemptions to paying federal or state minimum wage. In this post, we review minimum wage requirements, agricultural exemptions to minimum wage, and who qualifies for the agricultural exemptions.
Ohio versus federal minimum wage. As discussed above, Ohio’s minimum wage will rise to $9.30 for non-tipped employees but federal minimum wage will remain at $7.25. An agricultural employer is required to follow both state and federal laws, but when the two sets of laws differ, there may be some confusion about which one applies. Normally, federal law reigns supreme and usually preempts, or overrides, state law. But in this case, the federal law sets the floor for minimum wage. This means that employers across the country that are subject to the Fair Labor Standards Act (“FLSA”) cannot pay less than $7.25 per hour to their employees. However, if a state law requires that employers pay their employees more than the federal minimum wage, then the employer must meet the state’s minimum wage standard. Thus, Ohio employers must pay the Ohio minimum wage, unless an exemption applies.
Ohio’s “small employer” exemption. Starting in 2022, Ohio employers that grossed less than $342,000 in 2021 are not required to pay Ohio’s $9.30 minimum wage. Instead, those employers are required to pay the $7.25 federal minimum wage to their employees, unless another exemption applies.
Ohio and federal agricultural exemptions. Under both Ohio and federal law, agricultural employers are exempt from paying the federal or Ohio minimum wage to their employees if any of following apply:
- The employer did not use more than 500 man-days of agricultural labor during any calendar quarter during the preceding year.
- The employee is the parent, spouse, child, or other member of the employer’s immediate family.
- The employee:
- is employed as a hand-harvest laborer;
- is paid on a piece-rate basis;
- commutes daily from their permanent residence to the farm; and
- was employed in agriculture for less than 13 weeks during the previous calendar year.
- The employee is:
- 16 years of age or younger;
- employed as a hand-harvest laborer;
- paid on a piece-rate basis;
- employed on the same farm as their parent or legal guardian; and
- paid the same piece-rate wage as employees over the age of 16.
- The employee is engaged in range production of livestock.
500 man-days exemption. The “man-days” exemption was intended to exempt small and family-sized farms. A “man-day” is any day during which an employee performs at least one hour of agricultural labor. To calculate a “man-day”, an agricultural employer needs to keep track of the number of people who worked each day and for how long. 500 “man-days” is roughly equal to having seven employees working for at least one hour each, five days a week during a calendar quarter. It is also not just full-time employees that are counted towards the 500 “man-day” exemption, temporary and seasonal workers also count towards the “man-day” exemption.
Family member exemption. An agricultural employer is not required to pay family members the minimum wage. This family member exemption applies to employees engaged in agriculture and are either the parent, spouse, child or other member of the employer’s immediate family. However, not every blood relative is considered “other immediate family.” According to the U.S. Department of Labor, the following will be considered as part of the employer’s “other immediate family”: stepchildren, foster children, stepparents, and foster parents. Other family members, including siblings, cousins, nieces, nephews, uncles, and aunts do not count as immediate family members.
Employed in agriculture. Ohio law closely resembles, if not mirrors, FLSA requirements when it comes to agricultural exemptions to minimum wage and overtime requirements. But, to qualify for the agricultural exemptions discussed above, an employer must have employees that are employed in “agriculture.” Under the FLSA, “agriculture” has two distinct branches, primary agriculture and secondary agriculture. Employees engaged in primary agriculture are considered to be employed in agriculture for that workweek. Employees engaged in secondary agriculture are only considered to be employed in agriculture if the activities are performed by a farmer or on a farm in connection with the farming operations.
What is considered primary agriculture? Primary agriculture “includes farming in all its branches” and are those activities traditionally viewed as agricultural, including:
- Cultivating and tilling the soil;
- Dairying;
- Producing, cultivating, growing, and harvesting agricultural or horticultural commodities; and
- Raising livestock, bees, fur-bearing animals, or poultry.
Activities that qualify as primary agriculture do not necessarily have to take place on a farm. For example, someone employed in a hatchery that is located in an industrial complex is engaged in a primary agriculture activity (raising poultry) and is considered to be employed in agriculture. On the other hand, even though an activity takes place on a farm, it does not necessarily mean it is considered to be a primary agriculture activity. For example, courts have determined that employees of Dairy Farm A are not engaged in a primary agriculture activity when they process milk produced by Dairy Farm B.
What is secondary agriculture? Secondary agriculture includes all activities, including forestry or lumbering operations, that may not themselves be considered agricultural practices but are necessary to agriculture. For an activity to be considered secondary agriculture it must meet two requirements:
(1) the activity must either be performed by a farmer or on a farm; and
(2) the activity must be incidental to or in conjunction with such farming operations.
Secondary agriculture includes preparing an agricultural product for market, delivering agricultural products to storage, to market, or to carriers for transportation to market.
Any activity that is performed by a farmer’s employees, is also considered to be “performed by a farmer.” Moreover, an activity is considered “incidental to or in conjunction with” farming activities if the work being performed is:
(1) An established part of agriculture;
(2) subordinate to the farming operations of the farm; and
(3) not an independent business.
Mixing it up. After understanding what work is considered agricultural, it is important to understand the impact of an employee performing both exempt and non-exempt work. If an employee does both exempt and non-exempt work in the same week, then the employee loses their exemption status and must be paid according to federal/Ohio minimum wage and overtime requirements. However, if an employer can separate the employee’s exempt and non-exempt work into separate weeks, then the employer would only have to pay the employee federal/Ohio minimum wage and overtime for those weeks that the employee performed non-exempt work.
This especially important to agricultural employers that also engage in agritourism activities. Having a farm employee perform work related to an agritourism activity does not qualify for the agricultural exemptions under federal/Ohio law. Agricultural employers should be careful when assigning their employees tasks. Assigning tasks outside the realm of agriculture will subject the employer to the provisions of federal and state minimum wage and overtime laws.
Overtime. Agricultural employers are exempt from paying their agricultural employees an overtime wage rate. This exemption applies to all agricultural employees, not just small farm employees or immediate family members.
Conclusion. Determining whether your employees qualify for an agricultural exemption can be a complex issue, with multiple layers of analysis. It is always best to ask an attorney to help clarify whether your employees are considered to be “employed in agriculture” and thus qualify for the agricultural exemptions to minimum wage and overtime laws. Further, it is always a good idea to seek a lawyer’s counsel every so often to help make sure your operation is continuing to be compliant with labor and employment laws.
References and Resources.
29 U.S. Code Chapter 8 – Fair Labor Standards, https://www.law.cornell.edu/uscode/text/29/chapter-8
29 U.S. Code § 206 - Minimum wage, https://www.law.cornell.edu/uscode/text/29/206
29 CFR Chapter 5 – Wage and Hour Division, Department of Labor, https://www.ecfr.gov/cgi-bin/text-idx?SID=9215c26baf64464cdfbd4073e46247d3&mc=true&tpl=/ecfrbrowse/Title29/29chapterV.tpl
29 C.F.R. §§ 780 et seq. – Exemptions Applicable to Agriculture, https://www.ecfr.gov/cgi-bin/text-idx?SID=09461535e9555139c7d6471d1b26598d&mc=true&node=pt29.3.780&rgn=div5#se29.3.780_1103
Ohio Constitution, Article II, Section 34 – Minimum Wage, https://codes.ohio.gov/ohio-constitution/section-2.34a
Ohio Department of Commerce, 2022 Minimum Wage Poster, https://www.com.ohio.gov/documents/dico_2022MinimumWageposter.pdf
Ohio Revised Code Chapter 4111 – Minimum Fair Wage Standards, https://codes.ohio.gov/ohio-revised-code/chapter-4111
U.S. Department of Labor Wage and Hour Division, Field Operations Handbook Chapter 20 – Agriculture: Related and Seasonal Exemptions, https://www.dol.gov/sites/dolgov/files/WHD/legacy/files/FOH_Ch20.pdf
U.S. Department of Labor Wage and Hour Division, Fact Sheet #12: Agricultural Employers Under the Fair Labor Standards Act (FLSA), https://www.dol.gov/sites/dolgov/files/WHD/legacy/files/whdfs12.pdf
Tags: Labor and Employment, Fair Labor Standards Act, Ohio Minimum Wage, minimum wage
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Written by Peggy Kirk Hall and Jeffrey K. Lewis
School is out and youth employment is in. As more and more youth turn to the job market during summer break, now is a good time to review the laws that apply to youth working in agricultural situations. Here’s a quick refresher that can help you comply with youth employment laws. For additional details and explanation, refer to our law bulletin on “Youth Labor on the Farm: Laws Farmers Need to Know.”
- The agricultural “exemption” applies only to your children and grandchildren. Many farmers know that there are unique exemptions for agricultural employers when it comes to employment law. Youth employment is no different. In Ohio, youth employment laws do not apply to children working on a farm owned or operated by their parent, grandparent, or legal guardian. This means that your children, grandchildren, and legal guardianship children working on farms you own or operate may perform tasks that are considered “hazardous,” receive a wage less than federal and state minimum wage and work longer hours. Keep in mind that this exemption does not apply to youth who are your cousins, nieces, nephews, and other extended family members—those family members are subject to youth employment laws.
- Lawn mowing and similar tasks are special. Ohio Revised Code § 4109.06(9) explicitly states that youth engaged in “lawn mowing, snow shoveling, and other related employment” are not subject to Ohio’s youth employment laws. This means that farms may hire youth to mow the grass and do similar tasks around the farm without having to comply with labor laws regarding working hours and wage requirements.
- Treat youth like adults for verification, workers compensation and taxes. The law doesn’t deal with youth uniquely when it comes to Form I-9 employment verification, workers compensation coverage, and withholding taxes. A farm employer must complete these same requirements for youth employees.
- Don’t start them too young. Minimum working age is a tricky area of law. Federal law allows youth under the age of 14 to be employed as long as certain requirements are met, such as having written parental consent and limiting work hours and tasks. States may preempt federal law by being more restrictive. Ohio law, however, doesn’t address youth under 14 and doesn’t explicitly permit or prohibit them from being employed. Be aware that the Ohio Department of Commerce has stated that it interprets this silence in Ohio law as a prohibition against employing youth under 14. This creates a compliance risk for employers who want to employ a youth under 14, as Ohio may deem that a violation of state law. Before hiring youth under 14 for jobs other than the specifically exempted tasks of lawn mowing, snow shoveling or similar work, consult with your attorney.
- Keep younger youth away from “hazardous” jobs. State and federal laws are clear on this point: youth under the age of 16 cannot perform “hazardous” tasks. This restriction includes operating heavy machinery with moving parts, working inside silos and manure pits, handling toxic chemicals, working with breeding livestock, sows and newborn calves, and other dangerous tasks. An exception is that 14- and 15-year-olds may operate tractors and other machinery if they have a valid 4-H or vocational agricultural certificate of completion for safe tractor and machine operation. See the complete list of prohibited hazardous tasks in our law bulletin on “Youth Labor on the Farm: Laws Farmers Need to Know.”
- Don’t make them work too early or too late. During the summer months, youth between 16 and 18 years of age may work as early or as late as needed. Youth under the age of 16, however, may not start work before 7 am or work past 9 pm.
- Give the kids a break. If youth are working longer hours, you must give them a break from working. All youth under the age of 18 must receive a 30-minute break for every 5 hours worked.
- Know how much to pay. If a farm grossed less than $323,000 in 2020, the employer must pay employees the federal minimum wage of $7.25 per hour. If the farm grossed more than $323,000 then the employer must pay employees the Ohio minimum wage of $80. Two exemptions allow a farmer to pay less than both the federal and state minimum wage to youth. If the farm is owned or operated by a youth’s parent, grandparent, or legal guardian the minimum wage requirements do not apply. Second, if the farm is a “small farm,” which means that the farm did not use more than 500 man-days of agricultural labor during any calendar quarter of the preceding year, then the farm is not required to pay the federal or state minimum wage to any youth employed on the farm.
- Sign a wage agreement. This requirement catches many employers off guard. Ohio law requires that before any youth can begin work, the youth and the employer must sign a wage agreement. Be sure to keep this signed agreement with the youth’s employment records. A sample wage agreement from the Ohio Department of Commerce is available here.
- Do your recordkeeping. Just as you would with other employees, maintain a file on each of your youth employees. The file should include the youth’s full name, permanent address, and date of birth, the youth’s wage agreement, and any 4-H or vocational agricultural certificates. Also keep time slips, payroll records, parental consent forms, and name and contact information of youth’s parent or legal guardian.
Summer is a hot time to employ our youth and school them about farming and farm-related businesses. But don’t let legal compliance ruin your summer fun. If you have youth working on the farm and have concerns about any of the items in this quick overview, be sure to talk with your attorney. Doing so will ensure that the summer job is a good experience for both you and your young employees.
Tags: employment law, youth employment, youth labor, Fair Labor Standards Act, wage and hours, minimum wage
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