Vol. 2, No. 1, March 1998
University of California Cooperative Extension
Agricultural Personnel Management Program
Sacramento Valley Area
Brian Linhardt, Agricultural Personnel Advisor
2279 Del Oro Avenue, Suite B, Oroville, CA 95965
Phone: (530) 538-7201
FAX: (530) 538-7140
NOTE: Brian has accepted a position in the Dean's Office, College of Agriculture and Environmental Sciences, UC Davis. He can be reached at linhardt@agdean.ucdavis.edu.
By Steve Sutter, UC Labor Advisor, Southern San Joaquin
Compiled and adapted by
Brian Linhardt, UC Labor Advisor, Sacramento Valley
Employers who file 250 or more W-2's for a tax year are required to provide the information on personal computer diskettes or magnetic tape. "This year, the Social Security Administration (SSA) will return W-2 reports filed on magnetic media to employers without processing them if 50 percent or more of the 1997 W-2's are bad --either the social security number on the W-2 was never issued by the SSA, or the social security number is valid, but the name on the W-2 does not match the name on SSA's records," said Tim Beard, SSA Regional Magnetic Media Coordinator, Seattle. Last year's reject threshold, that applied to 1996 W-2's, was 70 percent.
Employers over the threshold are encouraged by the SSA to use one of three "levels" of the agency's free and voluntary Enumeration Verification System (EVS). Employers using the EVS can request verification of social security numbers and names for any worker for whom a W-2 will be prepared -- a current employee, former employee, or new employee after a commitment to hire has been made. The telephone verification level, which the SSA seeks to expand, is currently limited to five new hires per call. Paper lists of up to 50 workers at a time may be submitted for verification at a local SSA office. Larger files may be submitted for verification on diskette. Employers can decide to discontinue their EVS participation at any time.
Recently, the SSA launched another outreach program to employers who file over 100 "bad" W-2's on either paper or magnetic media. One grower shared his January 8, 1998 letter from the SSA. The form letter's language is "polite," pointing out, in part, that "our records indicate that your company has had a large number of earnings items placed in suspense in recent years." It goes on to encourage use of the agency's EVS, and to work with the local SSA office "to improve the wage reporting process." A brief description of EVS was attached to the letter. The grower was concerned about potential penalties. The IRS Code provides for a penalty of $50 per W-2 for reporting incorrect social security numbers or for missing numbers on the W-2.
"These penalties are not currently not being assessed," said Bill Brees, SSA Regional Magnetic Media Coordinator, San Francisco, "unless the IRS is doing some other kind of audit, in which case they will also look at the taxpayer ID issue; if they find errors, then they'll add that on." Penalties for failure to file correct W-2's are avoided only if the employer "can show the failure was due to reasonable cause and not to willful neglect."
What Action Should an Employer Take?
One possible course of action (in show of good faith) is to participate in SSA's "voluntary" verification program whenever you receive a "dear payroll manager" letter saying your company "has had a large number of earnings items placed in suspense in recent years." This would inform the employer of exactly WHICH workers have "bad" numbers. Workers with bad numbers could then be told, in confidence, that the SSA has notified management that there is a problem with matching their name and social security number.
Employers may then ask to see the worker's Social Security card. Errors made by the company will be clear (misspellings, names in wrong sequence, transposition of digits). Corrections can then be resubmitted to the SSA. Copying social security cards may help reduce errors in completing Form W-2. The IRS instructions for completing Form W-2 say, in part, "The employee's first name, middle initial, and last name (shown on the employee's social security card) are entered in Box E. Any employee without a social security card should apply for one by completing a Form SS-5, Application for a Social Security Card." Employers could supply Form SS-5 as a courtesy.
If the information on the social security card matches that on the W-2, or the employee can't produce a social security card, the employer may want to advise the worker to visit the local social security office. The employee could then try and resolve the discrepancy by getting a letter or "receipt" indicating that a replacement or new card has been applied for and report back to management afterwards.
One farmer, under the SSA's watchful eye, asked several long-term employees to show him their social security cards. They voluntarily quit. We wouldn't suggest giving the workers a "deadline," but would probably issue a second reminder a couple of months later. Maybe this is one of those "three strikes and you're out things" or maybe it is not. Lighter motivational tools for gaining employee compliance might be "we may not be able to process your paycheck" or "we may not be able to recall/rehire you next season without it." We certainly wouldn't advise terminating workers unless absolutely necessary after filling out next year's W-2 forms, which is nearly a year away. Some employers might even want to wait until they receive a penalty assessment.
However, one agricultural employer may be running out of time to resolve his "bad" W-2 situation. In talking with a Fresno IRS examiner, we learned she was facing the decision of whether to impose the $50 per W-2 penalty in an unnamed audit. While doing a routine check with the SSA, she discovered there were some 7,000 bad W-2's for the years under audit.
The SSA and the INS jointly operate a voluntary Employment Eligibility Confirmation Pilot Program in five States, one of which is California. According to the SSA, "right now, there are fewer employers participating in the test than both agencies would like to see. Also, in this arena, the amount of sharing of data between the two agencies is currently very small." Additionally, U.S. Department of Labor (DOL) Wage and Hour Officers are now coordinating their inspection programs with the INS. Both agencies have agreed to share information on employer sanctions enforcement and compliance. Wage and Hour Officers now have the authority to issue warning notices to employers found in violation of Form I-9 employment verification requirements, and they will refer, on Form ESA-91, all "suspected substantive hiring violations" to the INS, including "apparent illegal aliens employment." Wage and Hour officers who "walk in" must inform employers that they have the right to three days' notice before inspection of I-9's.
Another possible action is for employers to do some "screening" of Social Security Numbers without using the SSA's Enumeration Verification System (EVS). The SSA booklet "Employer's Guide To Filing Timely and Accurate W-2 Reports" points out (as of this date) "that the first three digits of the SSN must be a number in the following ranges: 001-587, 589-649, and 700-728. Social Security Numbers whose first three digits are outside these ranges are invalid and a Social Security office may be contacted to resolve the matter."
The SSA has also advised some employers that a valid number must have a total of nine digits. The first three digits are referred to as the area, the next two as the group, and the last four as the serial. "No numbers with a 000 area number, 00 group number, or 0000 serial number have been issued." Employers who haven't been contacted in an SSA outreach program may want to do some "self-auditing."
Back to: "In this issue"
Although improved technology has mechanized many work processes in dairy and other agricultural industries, competent, motivated employees are still needed to carry out most tasks. An employee working as a herdsman, mechanic, or milker should be considered as a key link in the dairy operation. After all, milk production is a culmination of all the feeding, cropping, and management efforts exerted on the farm.
Labor management is a problem on many dairy farms throughout the state. There is a saying among dairy farmers, "a good herdsman or milker will make a producer look good, and a poor one will kill you". Much of the productivity of a dairy farm relies on employees in these positions doing a quality job. People have to work in concert with the cows and technology to produce quality milk. Managers or farm owners develop plans for everyday procedures but laborers carry them out.
The problem of obtaining and keeping good quality farm employees stems from several factors: many employees lack a solid agricultural background, the work can be repetitious, days are often long and the hours odd. Another problem is that dairy farmers are often so entangled with the physical labor of running a farm that they do not have the time or inclination to manage personnel. Improving performance through people is an art as well as a science and requires scheduled attention. With today's competitive market, pricing and environmental regulations, farmers need to make a deliberate attempt to manage their employees rather than just "letting things happen."
Monetary and non-monetary incentives can improve the tenure of an employee and increase productivity. Incentives may be used for a variety of tasks on the farm such as in reducing the number of days open or calf mortality, feeding management and increasing milk production. Most commonly and perhaps most effectively, incentives can be related to milk quality such as a reduced Somatic Cell Count (SCC), Total Plate Count (TPC), Coliform Count (CC), or Laboratory Pasteurized Count.
Financial incentive plans can be a valuable tool, but they should not be a cover-up for inadequate wages and should always be tied to productivity or quality so that payments are related to increased returns to the business. The more an employee earns the better off the operation is in a well-designed incentive system. Although some operation results are not always within the complete control of a worker, incentives should help to unlock the door to total commitment.
In a 1993 survey by UC Labor Management Advisor Gregory Billikopf, one dairy farmer reportedly spent $7,000 each year to implement his incentive program and returned $57,000 back in increased productivity. Dairymen who had never used incentives stated that they were either: interested but did not know how to go about using incentives, didn't like them, or the use of incentives did not apply to their present operation. However, nearly three-fourths of the surveyed farmers who had used incentives felt that they had made or saved money and 90% were either very or somewhat pleased with the results.
Good business management involves much more than creating effective compensation practices. Back in 1990 UC Labor Specialist Howard Rosenberg looked at the affect of management practices on production data from 87 dairy farms down in Tulare County. The researchers studied milk production and herd reproduction as a proxy or substitute for dairy outcomes. Milk production was measured by looking at fat corrected milk as a measure of milk quantity (average daily milk output in lbs. per milking cow adjusted for fat content) and the somatic cell count as a measure of milk quality (number of somatic cells in monthly DHIA test sample) among others. Herd reproduction was measured by the average days open (avg. period during which cows are not pregnant) and services per conception (avg. breeding per conception).
Management practice data was gathered by conducting detailed structured interviews with dairy personnel. Several measures were used to study management's assumptions about worker motivation, employee work performance feedback (regularity of communication with milkers about job performance, formal or casual), and the use of written records in herd management decision making (extensive or not extensive).
The study found that these management practices were significantly associated with all four positive dairy production outcomes, especially with the increased quantity of milk production (fat corrected milk). In other words, dairy managers who used personnel practices to: motivate workers, communicate frequently by giving formal work performance feedback to employees, and used extensive written records to make herd management decisions produced more fluid milk with better quality. The findings strongly suggest that greater attention to management in its broader sense is critical to understanding and improving dairy business results.
Back to: "In this issue"
(Adapted from material in the APMA "Harvester" contributed by Barsamian, Saqui & Moody)
More of the Americans with Disabilities Act--
Employers must now inform disabled employees of other positions that may be available to them in the company.
Backpay to Illegal Aliens--
In December 1997 the 2nd Circuit Court of Appeal upheld a National Labor Relations Board decision which awarded backpay to illegal aliens who were retaliated against for taking part in union activities. The backpay period extended from the date of their unlawful discharge until their qualification for future employment.
Cal-COBRA--
The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) allows employees who might otherwise lose their health coverage to continue coverage after leaving employment through their employer's group plan under certain circumstances. For purposes of COBRA, the 20-employee minimum includes all full and part-time employees, regardless of whether they participate in the group insurance plan. An employer is considered as having employed fewer than 20 employees during a calendar year if it had fewer than 20 employees on at least 50 percent of the working days that year. The new Cal-COBRA (California Continuation Coverage Benefits Replacement Act) requires insurance carriers to provide COBRA-like coverage to workers of smaller employers (2 to 19 employees) not previously subject to COBRA.
Employee Privacy--
Employers are liable for failing to provide full information in an employee letter of recommendation. Once an ex-employer takes the step of providing a recommendation, the employer has a duty to be truthful and disclose all facts that significantly affect the recommendation.
Immigration Reform and Control Act--
The INS may fine individuals who use forged documents to obtain employment in the United States.
Same-Sex Harassment Prohibited--
Same-sex harassment claims can now be brought under the federal discrimination laws, the U.S. Supreme Court ruled March 4th in the case Oncale vs. Sundowner Offshore Services. The Supreme Court's ruling reversed a decision by the U.S. Court of Appeals for the Fifth Circuit, which held that a male employee who claimed he was sexually harassed by male co-workers and supervisors is not protected by discrimination laws under Title VII. However, in both same-sex and opposite-sex claims, the person making the charges must always prove the alleged harassment actually constituted discrimination "because of sex" the court held.
Back to: "In this issue"
Late last year the General Accounting Office (GAO) investigated whether or not perceived farm labor shortages actually existed. The GAO's report found the claims to be generally unfounded. The United States Department of Agriculture opposed many of the GAO's findings, citing that inadequate methods were used in the investigation and that the GAO did not have a firm understanding of how the industry operates.
More currently, a temporary agricultural guestworker program is being debated in the U.S. Congress and appears to be gaining some acceptance from both sides of the aisle. Bob and Gordon Smith (R-Oregon) originally introduced the bill, called the Temporary Agricultural Worker Act. As a revision to the current H-2A program, the act would allow farmers or grower associations to recruit non-residents for seasonal farm work without going through the lengthy certification process now required by the U.S. Dept. of Labor.
The plan includes a 20,000-person recruitment cap on farm workers each year and would expire in two years in order to do an evaluation and refine it. The program contains incentives for both employers and workers to transport individuals back to their home country after the work contract expires. Additionally, the plan would require recruiting, transportation, housing, and pay requirements that may likely make it somewhat cost- prohibitive for many growers. If interested in learning more about this proposed program, call the Butte County office.
Back to: "In this issue"
Labor Management Laws in California Agriculture, Second Edition, 1995. Written by Howard Rosenberg UC Extension Labor Specialist, Valerie Horwitz, J.D., and Daniel Egan, J.D. This is a compact, integrated guide to U.S. and California regulations as they relate to labor management in agriculture. The book informs managers and employees about laws that directly apply to them, and helps lawmakers, public agency staff, and interested observers better understand the nature of existing legal influences in farm business operations. The book may be ordered at a cost of $20 through your local county extension office or through University of California DANR Communication Services.
Labor Mangement in Ag: Cultivating Personnel Productivity, by Gregory Billikopf, UC Labor Management Advisor for the Northern San Joaqu¡n Valley. Topics include employee selection, pay (including incentives), supervision, interpersonal relations on the job, conflict management, and discipline. This 170-page book is available for $10 and includes postage, handling, and any applicable taxes. It is shipped book rate unless other arrangements are made. Please make checks payable to "Stanislaus County Farm Advisors' Trust Fund." Mail requests and send checks to: University of California, c/o G. Billikopf, 733 County Center 3, Modesto, CA 95355 or call the Stanislaus County Extension Office at (209) 525-6654. If you have Internet access, the entire book is on-line and free at: http://are.Berkeley.edu/APMP (left frame--Billikopf labor link) or at http://www.cnr.Berkeley.edu/ucce50/7grisha.htm.
Send all inquiries to the Butte County Cooperative Extension Office at (530) 538-7201.
Hiring the Right People: A Guide for Employment Interviewers. APMP Butte Publication 01.
How to Motivate Behavior for Lasting Results. APMP Butte Publication 02.
Working with Contracted Labor. APMP Butte Publication 03.
Checklist to Help Avoid Employee Problems and Joint Employer Liability. APMP Butte 04
Orientation Checklist: What to Do on the First Day or Week. APMP Butte Publication 05.
Personnel Records Retention Chart. APMP Butte Publication 06.
Ergonomic Assessment Checklist. APMP Butte Publication 07.
Performance Management Now and in the Future. APMP Butte Publication 08.
Exempt Versus Non-exempt Status: When are Workers Hourly or Salaried? APMP Butte 09.
Intentions versus Consequences: Employment Harassment Information and Investigation
Welfare to Work Tax Incentives. APMP Butte Publication 13.
H2-A Foreign Worker Program Summary. APMP Butte Publication 14.
1. Agricultural Personnel Management Program Newsletter-- Southern San Joaquin Valley
2. Abundance of Posters Required in Agricultural Employment, English/Spanish
3. Americans with Disabilities Act (ADA), paper prepared for 7/9/92 meeting, English
4. California EPA Hazard Communication Standard, English
5. Catalog of Selected Safety Materials & Resources, English/Spanish
6. Field Sanitation Packet: Hygiene posters, field sanitation rule, venders list in English/Spanish
7. Guide to Agricultural Heat Stress, English. Includes an English/Spanish tailgate talk on cassette
8. Guide to Federal and State Requirements for Employee/Migrant Housing, English
9. Pesticide Safety Fieldworker Instructors Guide, English (Courtesy of PAPA)
10. Personal Protective Guides for Pesticide Handlers, English
11. Spanish -- Pesticide Safety Training AudioCassette, with Spanish/English script (9 minutes in Spanish). Covers EPA Worker Protection Standard (WPS) training topics. Cal/EPA "accepted"
12. Pre-Employment Inquiry Guidelines, DFEH-161, English
13. Protect Yourself from Pesticides - Guide for Pesticide Handlers, English
14. 1998 Targeted Industries Partnership Program (TIPP) Checklist, English
15. Written Accident and Illness Prevention Program, English/Spanish. Cal/OSHA "accepted"
16. California Pesticide Worker Safety Regulations, Revised 1997
Back to: "In this issue"