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;
- 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
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
The Ohio General Assembly is off and running in its new session. Many bills that affect agriculture in Ohio are already on the move. Here’s a summary of those that are gaining the most momentum or attention.
Tax Conformity Bill – S.B. 18 and H.B. 48. The Senate has already passed its version of this bill, which conforms our state tax code with recent changes to the Internal Revenue Code made in the latest COVID-19 stimulus provisions of the Consolidated Appropriations Act. Both the Senate and the House will also exempt forgiven Paycheck Protection Program second-draw loan proceeds from the Commercial Activity Tax. The Senate version additionally exempts Bureau of Workers Compensation dividend rebates from the Commercial Activity Tax beginning in 2020, but the House bill does not. Both bills include “emergency” language that would make the provisions effective in time for 2020 tax returns.
Beginning farmers tax credits – H.B. 95. A slightly different version of this bill is returning after not passing in the last legislative session. The bi-partisan bill aims to assist beginning farmers through several temporary income tax credits:
- Businesses that sell or rent agricultural assets such as land, animals, facilities or equipment to certified beginning farmers can receive a 5% income tax credit for sales, a 10% of gross rental income credit for cash rents, and 15% of gross rental income for share rents.
- Certified beginning farmers can receive an income tax credit equal to the cost of participating in a certified financial management program.
Beginning farmers, among other requirements, are those in or seeking entry into farming in Ohio within the last ten years who are not a partner, member or shareholder with the owner of the agricultural assets and who have a net worth of less than $800,000 in 2021, which adjusts for inflation in subsequent years. Beginning farmers must be certified by the Ohio Department of Agriculture or a land grant institution. The House Agriculture and Conservation Committee will discuss the bill at its meeting on February 16.
Wind and solar facilities – S.B. 52. In addition to revising setback and safety specifications for wind turbines, this proposal would amend Ohio township zoning law to establish a referendum process for large wind and solar facility certificates. The bill would require a person applying for a certificate for a large wind or solar facility to notify the township trustees and share details of the proposed facility. That notification sets up opportunities for the township trustees or residents of the township to object to the application and submit the proposed application to a vote of township residents. A certificate would not take effect unless approved by a majority of the voters. A first hearing on S.B. 52 will be held on Tuesday, February 16 before the Senate Energy and Public Utilities Committee.
Grants for broadband services – H.B. 2 and S.B. 8. The Senate passed its version of this bill last week, which sets up a $20 million competitive grant program for broadband providers to extend broadband services throughout the state. The proposal would also allow broadband providers to use electric cooperative easements and poles, subject to procedures and restrictions. The bill had its second hearing before the House Finance Committee last week.
Eminent domain – H.B. 63. Based on a similar bill that didn’t pass last session, this bill changes eminent domain law in regard to property taken for the use of recreational trails, which include public trails used for hiking, bicycling, horseback riding, ski touring, canoeing and other non-motorized recreational travel. H.B. 63 would allow a landowner to submit a written request asking a municipality or township to veto the use of eminent domain for a recreational trail within its borders. The bill would also allow a landowner to object to a use of eminent domain for any purpose at any time prior to a court order for the taking, rather than limiting that time period to ten days as in current law. The bill had its first hearing before the House Civil Justice Committee last week.
Minimum wage increases. S. B. 51 and H.B. 69. Bills on each side of the General Assembly propose gradually increasing the state minimum wage to $15, but have different paths for reaching that amount. S.B. 51 proposes increasing the wage to $12/hour in 2022, followed by $1/hour increases each year and reaching $15 by 2025, which is when a federal bill proposes to establish the $15 minimum wage. H.B. 69 begins at $10/hour in 2022 with $1/hour increases annually, reaching $15 in 2027. S.B. 51 was referred last week to the Workforce and Higher Education Committee and H.B. 69 was referred to the Commerce and Labor Committee.
Tags: Ohio legislation, beginning farmer, solar energy, wind energy, township zoning, eminent domain, minimum wage, broadband, COVID, Paycheck Protection Program, commercial activity tax