Agricultural Personnel Management Program
University of California

Steve's Selected Notes from Ag-Busnet -- May 2001

• Split Shifts, Maximum Daily Hours and Meal Period, 5/29/01
• IRS -- A New Focus,  5/24/01
• Details on Reporting Time Pay,  5/23/01
• Workers comp Notices to Employees,  5/15/01
• Computing Piece-Rate Overtime,  5/14/01
• Workers Pay Medical Treatment Out of Pocket?,  5/8/01
• Not All Employees Created Equal Re: Cell Phones,  5/7/01
• Sponsoring Farm Workers,  5/1/01

A California farming company HR employee asks ... "Steve,

Wage Order 8, covering industries handling products after harvest, has a mandatory day off requirement for most covered employees. There are limited exemptions. However, the wage order, covering agricultural occupations, has none. It only describes a "split shift." My questions are as follows: (1) Considering that rest and meal periods are provided accordingly, what are the maximum hours in a workday or workweek an agricultural employee is allowed to work? Or, if a "split shift" is implemented, how much non-working time off are employers required to give employees between shifts? Again, these are issues not directly addressed or answered in Wage Order 14 and would like to obtain your thoughts.

Would appreciate your response and that of other readers.  Thank you!"

For adults, 18 and over, there is no official cap on hours worked in a day.  (Minors' working hours, under age 18, are generally capped at 8 per day.)  The interval between split shifts, as noted in the wage orders, is "established by the employer."  Evidently, there is no required minimum time off between shifts.

Here's another California reader's comments on reporting time pay and meal period ...

"Steve -- Our dilemma on this issue is the following.  We can forecast the weather to a certain extent, and we could ask employees not to report to work if a chance of rain is forecast (however slight), for example.  However, if it turns out to be a mostly good weather day, then we feel that we are depriving people of a day's wages -- and so do they.  On the other hand, if we ask them to report, but it's raining and we decide to send people home, they ask for compensation.  As in other things, I feel that this is a no win situation for either party, and can end up hurting employees more than employers.

We are having similar issues with our lunch hours - we start at 6am, and have recently started enforcing the lunch-after-5-hours rule (previously, we just did lunch at 12, regardless).  Well, the regulation is supposedly to protect workers, but they hate it!  Who wants to eat lunch at 11 and work another 3 or 4 hours in the heat of the day -- it is much nicer to have lunch at 12 and go home a couple of hours later.  All we can do is try to explain it to them, but although we are following the law, it doesn't make us feel like a good employer.

Any thoughts or ideas?    - - A Nursery grower."

In agriculture (wage order 14), every employee is entitled to a 30-minute meal period for any workshift longer than 5 hours (Howard R. Rosenberg, et. al., "Labor Management Laws in California Agriculture").

So, I don't see anything wrong with the workers' preference to hold off on their "authorized and permitted" lunch period until Noon.  Is that a bit of a "stretch?"  "No," said a deputy labor commissioner in San Francisco, "so long as it's a reasonable hour, and they're getting their breaks."

Although the deputy disagreed, I can see how the official Wage Order 14 wording in the poster might lead employers to believe work must come to a halt for lunch at the 5 hour mark.

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An IRS officer sent me the following news release of potential interest to farm labor contractors and their grower customers.  He wanted to let us know that, contrary to one paper, the IRS has indeed asserted (used) Section 3505 -- in the construction industry.  Although the provision has not been used in agriculture, "it is something we are focusing on," he said.   -- Steve

General  News Release

IRS Educates the FLC on IRC Section 3505.

Internal Revenue Code Section 3505(b) says that if a person supplies money to an employer for the specific purpose of paying the wages to the employees of that employer, with actual notice or knowledge, that the employer does not intend, or will not be able to make a timely deposit of the tax amounts withheld from the employees' wages, that the person who supplies that money will be liable for these withheld tax amounts up to a total of the actual tax amount or 25% of the amount paid to the employer.

Section 3505(b) could be used to hold a Grower liable for up to 25% of the withheld payroll tax if the FLC is unable or fails to make federal tax deposits. Depending on the size of the FLC payroll, it can be a substantial liability to the grower.

There are several ways in which Growers should protect themselves against a proposed liability under Section 3505(b).

 First, Growers have knowledge of how many man hours it should take for each stage of crop production.  Therefore, Growers should be suspicious of any FLC who alleges that he or she can perform the given task with an unreasonably small number of man hours.  Of necessity, the FLC will have to make cuts somewhere.  Withholding tax deposits are frequently the first bills left unpaid.  Similarly, if the FLC offers to do the job for an incredibly small profit margin the Grower should beware.  Un-deposited withholding tax deposits are frequently where this type of FLC makes his profits.  In sum, if the deal looks too good to be true, it likely is.

 Second, investigate your FLCs.  Growers can request that the FLC sign an I.R.S. Form 8821 which will allow the Grower to confirm that the FLC is current on his or her payroll tax liabilities.  Any Faxed inquiry with Form 8821 will have a 24 hour response time.  The Grower can also request that the FLC provide him with proof of withheld tax deposits after each pay period.  Timely payment by the Grower to the FLC of the entire contract amount is also important.  A partial payment by the Grower to the FLC virtually guarantees that the FLC will not be able to meet all of his or her obligations.  Since farming operations report their withholding tax obligations on an annual return, many FLCs find it easy to "borrow" from these funds first.

For more information call the IRS Ag team at (559) 271-6250, FAX number (559) 271-2975.

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Carl Borden, attorney with California Farm Bureau Federation adds these details and background information.  Thank you Carl.

"Here's what we say on reporting time pay in the Farm Labor Manual for California Farmers (Copyright 2001 California Farm Bureau Federation):

Reporting Time Pay

The IWC orders require an employer to pay an employee "show up" or reporting time pay under certain circumstances. IWC Order No. 14 exempts from this requirement an employer who, during a calendar year, never employs more than four persons covered by that order. The IWC orders provide:

1. Each workday an employee is required to report for work and does report, but is not put to work or is furnished less than half the employee's usual or scheduled day's work, the employee must be paid for half the usual or scheduled day's work, but in no event for less than two hours nor more than four hours, at the employee's regular rate of pay.

 2. An employee who must report for work a second time in any one workday and is furnished less than two hours of work on the second reporting must be paid for two hours at the employee's regular rate of pay.

 3. These reporting time pay provisions do not apply where: (1) operations cannot start or continue due to threats to employees or property; (2) civil authorities recommend that operations not start or continue; (3) public utilities fail; or (4) an Act of God or other cause not within the employer's control causes the interruption of work.

 4. Reporting time pay does not apply to an employee on paid standby status who is called to perform assigned work at a time other than the employee's scheduled reporting time.

A 1989 letter from the state Division of Labor Standards Enforcement (DLSE) (headed by the Labor Commissioner), which enforces the IWC orders, interpreted paragraph 3 as not applying to work delays or stoppages caused by mechanical breakdown.

First, the letter dismisses any suggestion that a typical mechanical breakdown is an Act of God:

Obviously, the type of breakdown described above is not the result of an Act of God . . . . The term "Act of God" is defined by Webster's New Collegiate Dictionary as: "An inevitable accident; such an interruption of the usual course of events that no experience, foresight, or care which might reasonably be expected could have foreseen or guarded against it."

The letter then rejects the assertion that a mechanical breakdown is a "cause not within the employer's control":

 The Industrial Welfare Commission has required the DLSE to use objective standards to determine what is "reasonable" under a number of provisions of the Orders. If the IWC so desired, they could have so worded the provisions of subd. 5 (C)(3) to require DLSE to objectively determine whether the cause was "not reasonably within the employer's control." They intended that the term "not within the employer's control" meant that the cause was not even remotely within the employer's control.

A delay or stoppage caused by typical weather conditions such as rain or fog likewise is not caused by an Act of God. Only a weather phenomenon occurring in an area where such an event never or hardly ever occurs could be called an Act of God.

However, weather phenomena such as rain or fog typical for an area arguably could fall within the exception of  "other cause not within the employer's control." An employer clearly cannot control the weather.

But despite this obvious observation, DLSE staff has said that it is within an employer's control to anticipate typical weather conditions by monitoring weather forecasts. Therefore, they opine, while the weather may not be within an employer's control, scheduling (or not scheduling) work in anticipation of forecasted weather conditions is.

While the opinion expressed by these DLSE representatives may be heeded or doubted, a court would ultimately have to decide the issue in resolving a dispute over it.

The federal Fair Labor Standards Act (FLSA) has no provisions on reporting time pay."

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At a post-seminar lunch recently, I was stumped by a veteran Kern County rose grower who asked if, under workers compensation, the employer has control over who the initial treating physician (or firm) is for 30 days following the employee injury -- or for 30 days following the date notified by the injured worker.  (I think the story was the worker of interest had waited 22 days to report his injury, following a visit to his own doctor.)

From the date notified, replied a local representative of the "Office of Benefit Assistance and Enforcement" at (559) 445-5355.

I also neglected (at that time in a group setting) to ask him if he distributed a "Written Notice to New Employees" at the time of hire, or no later than the end of the first pay period, as specified and required in California Labor Code Sections 3550-3551 and Title 8 Section 9880.  Part of that information must include an explanation of an injured employee's rights to medical care and to "select and change the treating physician."  (It's my recollection that without such notice, California employees are free to select their own treating physician, before or after an injury.)

Posting and notice requirements also require (Title 8, Section 15565) that each employer post a notice of his workers' compensation carrier at his headquarters or branch office together with the date of the expiration of the policy and the telephone number of the nearest office of the Labor Commissioner "so that employees may call to report expiration of such coverage."

Insurers, as part of their service, have a responsibility to provide workers compensation posters and notices to policyholders, along with "advice" concerning employee information rights.  When appropriate, Spanish notices must also be provided.

An insurance adviser replies ... My sources tell me 30 days (of employer-controlled medical treatment) after report of injury/the date the claim form was given to the employee is how most carriers would treat this. Also of interest however, is there a written disciplinary policy in place which addresses late reporting?? Is there supervisor training in place for accident investigation?? Most late reported claims are not of a sound nature!! ! !

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A California reader asked about the two methods of computing overtime piece-rate pay ...

1. The agricultural employees overtime may be computed by using the piece rate as the regular rate and paying the employee 1.5 times this rate for production during overtime hours.  (The employer would somehow have to tag or mark those "pieces" produced during overtime hours.)

2. As an alternative method, the California Department of Labor Standards Enforcement's practice is to compute the regular rate by dividing the total earnings for the week, including earnings during overtime hours, by the total hours worked during the week, including overtime hours.  The regular rate so computed may not be less than the California minimum wage ($6.25/hour).  The employee is entitled to receive an additional 1/2 times the regular rate for each overtime hour for which he or she would be entitled under the applicable wage order; for each overtime hour that he or she would be entitled to double the regular rate, the employee must receive an additional amount equal to the full rate.

(If your "1/2 times" computation yields half a cent, say $3.605, for example, round up to $3.61.  Less than half a cent may be rounded down.)

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A local law enforcement officer called with a personal question.  His wife works at a health clinic where she notes farm workers, working in this case for a contractor, are paying out of pocket for treatment of work-related injuries.  My reply?  The California Labor Commissioner's office (in Fresno) may be of help at (559) 244-5340.

Two readers reply ...

1. "This is a problem which needs to be addressed immediately. All physicians treating injured workers should contact the employer of the worker for verification in circumstances where this occurs. If it is found the employee is paying a bill for a work related injury and the employer will not pay the costs and fail to report to the workers compensation carrier, the physician  should report the employer to the DLSE/DOL.

The employer may elect to pay minor bills for first aid on their own if documenting files and working with their workers compensation carrier. If this is the case the employer should have a specific agreement with the provider and a system to correspond  to the provider in these circumstances. The industry and system will never achieve a higher level if both FLC and grower are not sanctioned for improper practices.

 How else will the system ever clean up??"

2. "Steve,
The medical provider who treats the injured worker should attempt to file the Doctor's First Report of Injury with the insurer.  They should contact the employer and request the insurer information.  In this a case, perhaps the employer is an unlicensed contractor and has no work comp insurance, or is discouraging (undocumented?) workers from filing a claim.  Medical providers are so busy, they may not have time to make the appropriate call.

If unable to get insurer information from the employer or employee, the medical provider should advise the injured worker to contact the local work comp Information and Assistance Officer.  A list of phone numbers can be found on Division of Workers Comp  webpage at: http://www.dir.ca.gov/DWC/dir2.htm

The Information and Assistance officer will provide the worker with a form to request proof of coverage for the employer.  If the employer is uninsured, the worker would receive information to apply to the uninsured employer fund (this is complex and requires plenty of knowledge of English).  This would also trigger an investigation of the employer with significant fines if found to be operating without appropriate work comp insurance.

I have often found patience is a strong virtue while waiting to talk to an I&AO."

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In regard to the use of cell phones at work, mentioned some time ago, a Stockton reader replies ...

"I searched through some sample policies, but couldn't find anything good on the use of cell phones at work.  The problem is not limited to greenhouses. I've counseled employers to establish rules prohibiting the use of cell phones during work hours.  These should not be in the work area as they cause undue distractions and a safety hazard as well as detracting from productivity.  People can't drive safely while on the phone, so they probably can't work safely while on the phone.  Workers should know they can use their phones while on breaks and lunch, but not otherwise..."

Carl Borden, attorney, California Farm Bureau Federation, contributed the following article from the January 2001 Farm Employers Labor Service (FELS) Newsletter.

Personal Phone Calls at Work May be Restricted

A subscriber asked FELS for help on an increasingly-common problem. Not only are employees receiving many personal calls during working time, but they are also calling out on their personal cell phones  When they are on the clock, an employer may restrict employees as to what they may do. For instance, their use or possession of wireless phones may be restricted. But some cautions should be heeded. First, if an employee receives an emergency call, the employer should, as a courtesy to the employee, try to relay the message to the employee. However, an employee who is frequently interrupted by "emergency" calls should be warned about the problem. If the problem persists, the employer should discipline the employee. Second, when an employee is off the clock, an employer may not control the employee's activities. For example, an employee who wants to leave the work premises during the employee's non-working time to make a phone call must be allowed to do so. Third, even during an employee's working time, an employer of course may not act to physically restrain an employee to stay in the employee's work area, such as by barring an exit door. Restraining an employee in this way exposes an employer to liability for false imprisonment. For example, an employee who wants to leave the work area to make a telephone call must be allowed to do so. Despite this, the employer may warn, discipline or even discharge the employee for violating company policy against leaving a work area during working time. (An exception to the point in the prior sentence is where an employee with a disability may, as a reasonable accommodation, need to leave the work area due to the disability. For example, an employee with a bladder condition might need, as a reasonable accommodation, bathroom breaks during working time.)

Here is a sample employment policy on employee phone calls.

PERSONAL PHONE CALLS (Sample Policy)
Due to the company's heavy load of business calls and because many employees work here, non-emergency incoming personal telephone calls are prohibited. Employees may make local non-emergency calls from the office during non-working time only; no long-distance calls are allowed. Employees should instruct persons who would likely call them in an emergency to call the office. The company will try to deliver an emergency message to you promptly. You may use any company telephone in an emergency. Employees may not, without the company's written authorization, have or use wireless telephones in production areas. Employees may have pagers in production areas but must wait until an authorized rest or meal period to return pages.

A reader points out ...

"Steve,

I've noticed that some employers generally need two sets of rules on the use of cell phones.  On the one hand, the general workforce will have no business need to use of a cell phone during work hours.  Again, they should be restricted to break periods for personal use.  On the other hand, sales and management staff may have provided clients, vendors, and other business contacts a regular work and mobile/cell number to call.  While my cell phone stays in the car, several of our sales staffers have their cell phones on wherever they go, including their regular office workstations. Unfortunately, not all employees are created equal when it comes to\cellular phone use in the workplace."

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An employer asked me a very hard question ...

"What should an employer do if that does happen, where the employee basically notifies the employer that s/he is unauthorized to work in the United States?

I think a lot of employers may have the same question."

My guess is that most agricultural employers opted not to "sponsor" their newly discovered unauthorized worker(s) upon learning how impractical it would be for them -- they would not be able to hire them for 4 to 5 years, perhaps longer.  (Sponsoring them and keeping them on the payroll would be an INS investigator's dream case.)

Even though not "publicly on record" as knowing this person does not have employment authorization, and even though the chances of this situation being picked up in an INS audit are slim, the employer is legally obligated to let this worker go.  A replacement worker may also have a counterfeit card, but the employer won't know that for sure.

A employer reader asked ... "Steve, what happens if you decide to sponsor the workers in question?  That is the route that we have taken.  Are we obligated to fire them or can we wait to see the results of the sponsorship process first?  When you speak about an INS investigator's dream, what does this really mean?"

There is no grace period to see what happens with the sponsorship petition I'm told by an INS representative on the agency employer hot line at (800) 357-2099.  This is consistent with a conversation I had earlier this week with a local INS official.  (He was also quite familiar with the U.S. Labor Department's Form ETA 750.)

An INS investigator's "dream" is a major case that the agency thinks could be won hands down in a federal court.  The possibility of the worst fines and/or prison sentences for "continuing to employ aliens knowing that they are or have become unauthorized to work in the United States" would be an employer nightmare.  Fines for these criminal violations could range "up to $3,000 per employee and/or 6 months imprisonment."

Then this reply from an INS official in Washington D.C. (It's interesting to note that INS sees the ETA 750 as an "audit tool."). . .

By "sponsorship" I assume that you mean filing a labor certification (ETA 750 with local SESA).  It seems obvious that any employer sponsoring an alien worker under 245i has become aware that he/she is unauthorized to work.  If the employer continues to employ after that time, it is knowingly, implicating a higher level of fines.  Be aware that filed labor certifications have always represented a source of predication for audit of knowing hires or continuing to employ.

I suppose that your readers know that agricultural work represents a very low preference level for employment-based immigration purposes as well as that the standards are difficult to meet.  Many employers are not aware that they must agree to pay these aliens what DOL determines to be the prevailing wage for this type of work as opposed to what their business necessity dictates.  Often, employers find that they can actually get workers if they advertise at this prevailing wage.  Even in cases where employers are prepared to pay the prevailing wage, they find that labor certification takes 2 years or longer and the I-140 perhaps 9 additional months to adjudicate (particularly given the 245i backlog).  Thereafter, aliens can file for adjustment under 245i only once an immigrant visa becomes available.  Since only 10,000 immigrant visas are available per year at this preference level, and those are apportioned among all countries of origin, the backlog for a Mexican or Central American could be 10 years ...or longer.  In the meantime, these aliens are deportable (if discovered) and the employers susceptible to penalties (if discovered).  Perhaps most painful to these employers is the fact that once these aliens adjust status to permanent residence, they are free agents and may change employment!

This is not amnesty.

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