Volume 8, Number 1, Winter-Spring 1999

Agricultural Risk Management

A Common Sense Approach to
Compliance with Labor Laws

José H. Millan
Chief Deputy Labor Commissioner
Division of Labor Standards Enforcement
California Department of Industrial Relations

It isn't all that hard to comply with California labor laws. You may think this is a Labor Commissioner's simplistic and provocative view, but it is quite possible to operate a successful agricultural business while following the rules and minimizing the risk of penalties. Most farm employers do. Where help is needed, we in the Division of Labor Standards Enforcement (DLSE) offer support in the form of education and other assistance to promote understanding and knowledge of the law by employers and employees.

Unfortunately, serious--and avoidable--violations of labor law do occur. The main types that we encounter in agriculture usually fall into the following categories:

• Failure to comply with minimum wage and overtime requirements and to keep accurate pay records, particularly when the farm worker is paid on a piece rate basis. The minimum wage is a rate equal to $5.75 per hour, whether employees are paid on the basis of time, output, a combination, or otherwise. Agricultural workers are generally entitled to an overtime premium pay rate of 1.5 times their regular rate ("time and a half") for all hours in excess of 10 in any workday and for all hours on the 7th day of any workweek, and twice their regular rate ("double time") for all hours exceeding 8 on the seventh day of a workweek.

• Failure to provide itemized wage earnings and deduction statements to workers when they are paid. This is often referred to as a "cash pay" violation, even though payment in cash is perfectly legal as long as it is accompanied by the equivalent of a complete "paycheck stub" - e.g., specific documentation of how the earnings were calculated and what deductions were subtracted from gross wages.

• Not having workers' compensation insurance for employees.

• Illegal use of child labor. These offenses fall under two types: (1) the most serious are violations of restrictions on employing minors in hazardous tasks or conditions, and of limits on employing those under age 16 for more than the permitted number of hours, and (2) less serious infringements of requirements for failing to have work permits for older minors (16 and 17 years old).

• Obtaining services from unlicensed farm labor contractors. Failure to check that an FLC holds a current state license is itself a violation, and a grower who does business with an unlicensed FLC is subject to liability for unpaid wages and other citable offenses as a joint employer of the workers employed by the contractor.

The number of agricultural firms in violation of state laws has been decreasing, however, since the Targeted Industries Partnership Program (TIPP) began. The TIPP was established in 1992 as a pilot joint effort by state and federal agencies to enforce labor laws in agriculture and the garment manufacturing industry. Educating employers and employees about the laws pertaining to them has been and remains a central component of the program. It has grown since inception, and in 1997, Governor Wilson authorized additional funding to expand TIPP activities into the restaurant industry. The program's education and enforcement efforts are intended to improve workers' lives and to enhance fair business competition by targeting noncompliant employers who gain an unfair advantage through violation of labor, tax, and safety and health laws.

In 1997, according to the Targeted Industries Partnership Program Fifth Annual Report and Retrospective, 1993-1997, the DLSE and the U.S. Department of Labor (USDOL) together conducted 455 unannounced inspections in agriculture, resulting in 34 cash pay and 31 minimum wage citations, as well as 39 child labor and 26 workers' compensation citations. In 1998, the total number of inspections conducted was 762. The results of the 1998 inspections were 34 cash pay violations, 17 for failing to pay minimum wage, 72 child labor violations (most of which were for failure to have a valid work permit), and 54 instances of failing to have workers' compensation insurance.

The inspections conducted in 1997 and 1998 resulted in penalties amounting to $734,676 and back wages of $484,036 collected on behalf of farm workers. In the garment industry and agriculture combined, TIPP inspections totaled 1,763 in 1998, and resulted in recovery of $1.8 million in wages. During the five-year period from 1993 through 1997, in about 6,200 workplace inspections in the garment and agricultural industries, the cooperating agencies issued nearly 5,000 civil citations and more than 300 criminal citations, and collected $42.4 million in wages and penalties.

But effective enforcement is by no means achieved by sweeps and fines alone. Outreach forums like this one, meetings to discuss specific types of violations found in sweeps, and seminars on labor, safety, and health issues for employers and employees play a large role in the TIPP. We offer several supporting publications, and a video on compliance with labor laws is in production. A toll-free hotline (800/733-3899) staffed by bilingual professionals is available to farm workers who have questions and want to file complaints.

TIPP has been effective because it greatly reduces duplicative efforts among California and federal agencies, and it brings the full force of all applicable laws to bear through a team approach in which we share staff, equipment, and data resources. Despite impressive gains in compliance, some serious legal risks are not well understood by growers. One of particular concern, and I believe likely to come under some form of joint liability rules in the coming year, is responsibility for lost wages and even lives of workers injured while being transported by unlicensed day-haulers, or raiteros.

Current state law treats day-haulers the same as farm labor contractors, thus holding them to all FLC license requirements, even though their functions and job qualifications are typically quite different. The law does not fit reality in this situation, and it has probably worked against day-haulers' becoming legitimate. Under the circumstances, it behooves farm employers to appreciate the real physical risks involved in transporting workers, to be aware of the legal standards for farm labor vehicles and drivers, and to take all possible steps to prevent hazardous transportation of their own and their contractors' employees.