New Year, New Minimum Wage.

By:Jeffrey K. Lewis, Attorney and Research Specialist, Agricultural & Resource Law Friday, December 03rd, 2021
Yellow yield sign with text stating "Minimum Wage Increase Ahead."

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: 

  1. The employer did not use more than 500 man-days of agricultural labor during any calendar quarter during the preceding year. 
  2. The employee is the parent, spouse, child, or other member of the employer’s immediate family. 
  3. The employee: 
    1. is employed as a hand-harvest laborer; 
    2. is paid on a piece-rate basis; 
    3. commutes daily from their permanent residence to the farm; and 
    4. was employed in agriculture for less than 13 weeks during the previous calendar year. 
  4. The employee is: 
    1. 16 years of age or younger; 
    2. employed as a hand-harvest laborer; 
    3. paid on a piece-rate basis; 
    4. employed on the same farm as their parent or legal guardian; and 
    5. paid the same piece-rate wage as employees over the age of 16. 
  5. 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 Standardshttps://www.law.cornell.edu/uscode/text/29/chapter-8

29 U.S. Code §206 - Minimum wagehttps://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 Agriculturehttps://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 Wagehttps://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 Chapter4111 – 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 Exemptionshttps://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