Farm Labor
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.
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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The U.S. Department of Labor (“DOL”) has introduced a new independent contractor rule, aiming to provide clarity and guidance for both employers and workers. The classification of workers as employees or independent contractors has become increasingly complex in recent years, resembling an endless carousel ride for many businesses, particularly those in the agricultural sector that frequently hire part-time and seasonal help. The DOL's new rule, published under the Fair Labor Standards Act of 1938 (“FLSA”), seeks to put an end to this perpetual uncertainty surrounding worker classification once and for all.
Background
The FLSA establishes federal standards for overtime pay, minimum wage, and child labor. Ohio law explicitly aligns its interpretation of the term "employee" with that of the FLSA for wage and hour purposes. For the FLSA to apply to an agricultural employer, an employment relationship must be established. This entails determining whether a worker is classified as an employee or an independent contractor.
However, the FLSA itself is silent on how to exactly distinguish an independent contractor from an employee. So, for years the DOL relied on the court system to develop the standard for determining whether a worker should be classified as an employee or an independent contractor. The court system developed an “economic realities test” to help determine whether an employment relationship exists with a worker. The economic realities test is a totality of the circumstances test – which means all factors should be weighed evenly – and relies on six factors. These factors are:
- The nature and degree of control over the work;
- 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 a similar variation of them, to help define employee and independent contractor under the FLSA. However, courts across the country have applied the factors inconsistently and have given certain factors different degrees of weight.
2021 Independent Contractor Rule
In 2021, the DOL sought to resolve the inconsistent and subjective application of the factors by publishing a formal independent contractor rule (“2021 IC Rule”). This 2021 IC Rule marks the DOL’s first attempt to establish a standardized test for distinguishing between independent contractors and employees.
The 2021 IC Rule used a variation of the economic realities test but gave greater weight to “two core factors” rather than applying each factor equally. The “two core factors” are:
- The nature and degree of control over the work; and
- The individual’s opportunity for profit or loss.
In the 2021 IC Rule, the DOL stated that the two core factors “are the most probative as to whether or not an individual is an economically dependent ‘employee’ . . . and each therefore typically carries greater weight in the analysis than any other factor.” The DOL also stated that if the two core factors “both point towards the same classification, whether employee or independent contractor, there is a substantial likelihood that is the individual’s accurate classification.” This is because, according to the DOL, the other factors are less probative and may not be probative at all and are “highly unlikely, either individually or collectively, to outweigh the combined probative value of the two core factors.”
In other words, the DOL established a rule that looked at two core factors to determine the economic reality of the relationship between a worker and an employer. Thus, under the 2021 IC Rule, the economic realities test looked something like this:
- Core Factors
- The nature and degree of control over the work; and
- The individual’s opportunity for profit or loss.
- Other Factors
- 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;
- Skill and initiative; and
- Any additional factors
New 2024 Rule
The carousel ride does not stop at the 2021 IC Rule, unfortunately. In January of 2024, the DOL published another rule, repealing the 2021 IC 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 new rule, effective March 11, 2024, evaluates the following factors:
- Opportunity for profit or loss depending on managerial skill;
- Investments by the worker and the employer;
- Degree of permanence of the work relationship;
- Nature and degree of control;
- Extent to which the work performed is an integral part of the employer’s business;
- Skill and initiative; and
- Any additional factors.
Below is a more detailed analysis of the above seven factors.
- Opportunity for profit or loss depending on managerial skill. This factor assesses whether a worker possesses managerial abilities that impact their capacity to generate profit or incur losses. Relevant considerations include:
- Negotiating pay for services rendered
- Having the freedom to accept or decline jobs
- Choosing the order or time in which jobs are completed
- Engaging in marketing, advertising, or other business expansion efforts
- Making decisions regarding hiring, purchasing materials and equipment, or renting space
If a worker lacks the opportunity for profit or loss, they are likely an employee.
- Investments by the worker and the employer. This factor examines whether a worker’s investments are capital or entrepreneurial in nature. Costs incurred by a worker to perform their job, like purchasing tools or equipment, are not indicative of entrepreneurial investment and suggest employee status. Conversely, investments supporting an independent business, such as expanding capabilities, reducing costs, or broadening market reach, suggest entrepreneurial investment and independent contractor status.
- Degree of permanence of the work relationship. If the work relationship is indefinite in duration or continuous, the worker is probably an employee. If the work relationship is definite in duration, non-exclusive, project-based, or sporadic because the worker is in business for himself or herself and marketing his or her services or labor to multiple entities, then the worker is probably an independent contractor.
- Nature and degree of control. This factor assesses the level of control the employer exercises over the work and economic aspects of the relationship. Greater control by the employer suggests and employee relationship, while more control by the worker indicates independent contractor status. Factors include the employer setting the worker’s schedule, supervising work performance, limiting the worker’s ability to work for others, using technological means for supervision, reserving the right to supervise or discipline workers, determining who sets the prices or rates for services provided by the worker, and the marketing of the services or products that the worker provides.
- Extent to which the work performed is an integral part of the employer’s business. This factor evaluates whether the work performed is essential to the employer's business operations. It focuses on the function performed rather than the individual worker. If the service provided is indispensable for the employer's functioning, it favors an employee classification. Conversely, if the work is not crucial to the employer's core business, it leans towards independent contractor status.
- Skill and initiative. The skill and initiative factor evaluates whether the worker utilizes specialized skills and demonstrates entrepreneurial initiative in their work. If the worker lacks specialized skills or relies on employer-provided training, it suggests employee status. Conversely, if the worker brings specialized skills and exhibits business-like initiative, they are likely an independent contractor.
- Any Additional Factors. Additional factors may be relevant in determining the status of a worker. These additional factors may indicate whether the worker operates as an independent business entity or is economically reliant on the potential employer for work opportunities.
Under the new rule, no one factor is dispositive of determining whether a worker is an employee or independent contractor. For example, a landscaper may perform work that does not require specialized skills, but application of the other factors may demonstrate that the landscaper is an independent contractor (e.g. the landscaper may determine the price charged for the work, make decisions affecting opportunity for profit or loss, determine the extent of capital investment, work for many clients, and/or perform work for clients for which landscaping is not integral).
What does it all mean?
In announcing the new rule, the DOL said “[i]t is the Department’s obligation to administer and enforce the FLSA to ensure that workers who should be covered under the [FLSA] are properly classified as employees.” Many seem to suggest that this new rule is more employee friendly and makes it easier to classify a worker as an employee than the 2021 IC Rule.
The new rule, however, only affects a worker’s classification under the FLSA. The same standard does not apply to other federal laws, like the Internal Revenue Code. Nevertheless, those standards used in other federal laws may look eerily similar to the standard used here.
Lastly, the carousel ride may not yet be over. There are already legal challenges to the new rule that might put the DOL’s hopes of ushering in a new period of clarity at risk (See Warren v U.S. Dep’t of Labor, 2:24-cv-00007, N.D. Ga.).
Consequences of Misclassifying Workers.
Misclassifying a worker can come with harsh consequences. An employer that misclassifies a worker may be required to pay unpaid wages owed to the employee, civil money penalties, and/or attorneys’ fees associated with litigation. Furthermore, employers may be held criminally and/or civilly liable under other federal and state statues for misclassifying a worker. It is vital that agricultural employers take classification of a worker seriously because all it takes is one disgruntled misclassified worker or workplace injury to a misclassified worker to seriously jeopardize an operation.
Sources:
Independent Contractor Status Under the Fair Labor Standard Act, 86 CFR 1168
Employee or Independent Contractor Classification Under the Fair Standards Act, 89 CFR 1638
Happy Fall Y’all! We are back with another monthly edition of The Ag Law Harvest. This month’s edition brings you an Ohio Supreme Court case that clarifies a party’s obligations under express indemnification provisions in a contract, an Ohio woman’s fight against a local zoning ordinance that sought to remove her pet ducks, and agricultural labor updates.
Common Law Notice Requirements May No Longer Exist Under Express Indemnification.
The Ohio Supreme Court recently made a significant decision regarding indemnification clauses in contracts. Indemnification is the right of one party to be fully reimbursed for payments they made on behalf of another party who should have made those payments. There are two types of indemnity: express and implied. Express indemnity is when a written contract explicitly states that one party will reimburse the other under certain circumstances. Implied indemnity is a common law principle where each party is responsible for their own wrongdoing, and the wrongdoer should reimburse the injured party.
In this case, Discovery Oil and Gas contracted with Wildcat Drilling, which included an express indemnification provision. Wildcat was supposed to indemnify Discovery for any fines related to pollution or contamination from drilling. When Wildcat violated Ohio law by using brine improperly, Discovery settled with the Ohio Department of Natural Resources for $50,000 without notifying Wildcat and requested reimbursement. Wildcat refused, arguing that Discovery didn't follow Ohio common law, which requires notice before settling a claim.
The Ohio Supreme Court sided with Discovery, stating that the express clause in the contract indicated the parties' intent to deviate from common law principles. The court clarified that notice requirements for indemnification are determined by the contract terms. Depending on the contract, parties may not need to provide notice before settling a claim and seeking reimbursement. This ruling emphasizes the importance of contract language in determining indemnification obligations.
Medina County Woman Has All Her Ducks in a Row.
A Medina County woman is able to keep her pet ducks after a battle with the Village of Seville and an interpretation of its zoning ordinances. Ms. Carlson, the owner of the ducks at issue, fought to keep her pet ducks after being ordered to remove them from her property by Wadsworth Municipal Court. Ms. Carlson appealed the municipal court’s ruling, arguing that Seville’s zoning ordinance against “poultry and livestock” is unconstitutionally vague. The appellate court agreed with Ms. Carlson. The appellate court found that Seville’s ordinance against poultry focused on hens, roosters, coop hygiene, and the sale of poultry byproducts such as meat and eggs. The court held that an ordinary person would not be able to understand that keeping other birds, such as ducks, as companion animals would violate Seville’s ordinances. Therefore, Ms. Carlson could not be found to have committed an unclassified misdemeanor by owning pet ducks. However, had Ms. Carlson been keeping the ducks and selling their byproducts such as duck eggs and meat, there might have been a different outcome.
Farm Labor Stabilization and Protection Pilot Program.
The U.S. Department of Agriculture (“USDA”) has announced the opening of the Farm Labor Stabilization and Protection Pilot Program (“FLSP”). The FLSP will award up to $65 million in grant funding to provide support for agricultural employers to implement new hearty labor standards/procedures and update existing workplace infrastructure to help promote a healthy and safe work environment. The USDA states that the purpose of the FLSP program is “to improve food and agricultural supply chain resiliency by addressing challenges agricultural employers face with labor shortages and instability.” The FLSP has three goals: (1) drive U.S. economic recovery and safeguard domestic food supply by addressing current labor shortages in agriculture; (2) reduce irregular migration from Northern Central America through the expansion of regular pathways; (3) improve working conditions for all farmworkers. Qualified applicants can receive grants ranging from $25,000 - $2,000,000. The application window closes on November 28, 2023. For more information, view the USDA’s fact sheet on the FLSP.
Department of Labor Publishes Proposed Rule to Amend H-2A Regulations.
The U.S. Department of Labor (“DOL”) Employment and Training Administration (“ETA”) has published a proposed rule titled “Improving Protections for Workers in Temporary Agricultural Employment in the United States.” The proposed rule seeks to amend several H-2A program regulations by:
- Adding new protections for worker self-advocacy.
- Clarifying when a termination is “for cause.”
- Making foreign labor recruitment more transparent.
- Making wages more predictable.
- Improving workers’ access to safe transportation.
- Enhancing enforcement to improve program integrity.
Read more about the proposed rule by visiting the DOL’s news release. The comment period on the proposed rule ends November 14, 2023.
Department of Homeland Security Publishes Proposed Rule Amending H-2 Program.
The U.S. Department of Homeland Security (“DHS”) has published a proposed rule titled “Modernizing the H-2 Program Requirements, Oversight, and Worker Protections.” The DHS announced its intent to strengthen protections for temporary workers through the H-2A and H-2B worker programs by providing greater flexibility and protections for participating workers, and improving the programs’ efficiency. The proposed rule would:
- Provide whistleblower protection to H-2A and H-2B workers who report their employers for program violations.
- Extend grace periods for workers seeking new employment, preparing for departure from the United States, or seeking a change of immigration status.
- Establish permanent H-2 portability, allowing employers to hire H-2 workers who are already lawfully in the United States while the employer’s H-2 petition for the worker is pending.
The comment period for the proposed rule ends on November 20, 2023.
Tags: Ohio Supreme Court, Contract Terms, Indemnification, Farm Labor, Agricultural Labor, Zoning Ordinances
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