Caution! THIS GUIDE IS NOT LEGAL ADVICE. Please consult an attorney or obtain technical assistance from the Bureau of Labor & Industry (BOLI) to ensure full compliance with the law. You may also obtain Oregon’s “Agripedia,” which includes a comprehensive guide for agricultural employers. To download a copy, order a hardcopy or read specific provisions online, visit the Oregon Department of Agriculture website.
This guide will help you navigate your way through the complex rules and regulations that you must abide by when employing workers on your farm. We have developed this guide because we know how important accessibility to reliable and affordable help on your farm is, and that having an internship program is an effective way to achieve these goals. At the same time we are also aware that farm internship programs here in Oregon and in other states are coming under increasing scrutiny by state labor departments. Farms in Washington, Oregon and even here in our own community have been the target of wage claims, labor department audits and even civil law suits, all stemming from the farms not paying their interns minimum wage and not deducting room and board from their wages.
Like most farmers across the country, and also to most farm interns, it seems perfectly reasonable to do what many small family farms have been doing for ages – exchange a place to live, abundant farm-fresh food, a small stipend, and farm skills and knowledge in exchange for on-farm labor. Surprisingly, this reasonable seeming arrangement is actually not legal in the eyes of the law. Under Oregon law, farm “interns” are considered employees and the farm employer must treat them accordingly. This includes paying them the state agricultural minimum wage (which here in Oregon is the same as the minimum wage – $8.80 per hour) and itemizing and recording any deductions for room and board or other items.
Farms that have had to pay back wages in former interns’ successful wage claims got into trouble because they had done neither – they had offered room and board and a stipend (sometimes as much as $1000 per month), but had not paid minimum wage or recorded room and board as a deduction from the wages paid.
There are numerous laws that as agricultural employers, you will have to comply with, including 11 federal laws such as the Migrant and Seasonal Agricultural Protection Act (MSAWPA), the Fair Labor Standards Act (FLSA) and Occupational Safety and Health Act (OSHA), plus state and federal tax laws. The most essential laws that you must comply with to avoid problems with Oregon’s employment enforcement department, the Bureau of Labor and Industry (BOLI), however, are Oregon’s administrative rules set forth by BOLI.
MSAWPA, which on its face appears to apply only to farms hiring migrant workers, surprisingly may apply to your interns. Because they are hired seasonally, interns in most situations will be covered by the protections MSAWPA offers, which primarily includes the requirement that seasonal workers be paid the state agricultural minimum wage. Here in Oregon, the state agricultural minimum wage is equivalent to the regular minimum wage, which is $8.80 per hour. As a farm employer, you must pay your workers (whether you call them interns, apprentices or employees) minimum wage. While it may feel like you will now not be able to afford to run an internship program, you can legally deduct room and board from the wages so you will be paying out less cash than you may think. (See “Deductions” section below.)
It is really important that employees record work hours on a timesheet, that this timesheet is double-checked by the farm employer, and that the timesheet be turned in at the end of the weekly pay period. BOLI presumes there has been a violation of employment law when the employer neglects to keep records of hours worked.
Under the FLSA, agricultural employers are exempt from having to pay overtime (any work over 40 hours per week) for agricultural work. That means that even if the employee works 60 hours in the field in the height of harvest season, the farmer will not have to pay at the higher overtime rate for those 20 extra hours. This does not mean that the farm employer will never have to pay overtime, however. If the employee is engaged in any work that is not related to the farm’s products (i.e. office work not related to farming, this will not count as agricultural work, and even if the employee performs a single hour of this type of work, any work that exceeds 40 hours that week must be paid at time-and-a-half.)
Note: You may be exempt from the FLSA’s overtime requirement if you qualify for the 500 Man-Day Exemption. Basically, if you can prove that you have hired only a limited amount of farm labor in a given period, you qualify for the Man-Day exemption. It is a strange calculation, however, and you may want help figuring it out! The OSU Extension Office’s book, “The On-Farm Mentor’s Guide” has a useful worksheet to help you calculate your “Man-Day” hours.
Despite the fact that to be within the bounds of the law you will have to pay your interns minimum wage, you will be able to deduct from their wages the cost of providing them with housing and food. Although it will likely be yet another headache you will face, this will help decrease your financial burden of having to pay minimum wage.
If you are deducting the cost of providing food and housing from your interns’ wages, you will need to make sure you accurately account for and record these deductions. The first and probably most difficult part will be determining how much the deductions will be. BOLI’s law says that the deduction for food, lodging and other facilities/services (i.e. utilities) must be equal to the fair market value of these items. In determining what the fair market value is, consider the amount “actually and customarily charged” for comparable meals, lodging, facilities or services to non-employee consumers. Alternatively you can consider what the “actual cost” to you is for purchasing, preparing or providing these items.
Whichever way you arrive at the value of these items, make sure the dollar amount and how you determined that dollar amount is documented somewhere. Also, these deductions must be itemized and recorded for your employees and appear on their wage statements that they are given each pay period with their wages.
You must also have them voluntarily agree to these deductions and sign a statement saying that they voluntarily agree to have money deducted from their paychecks for these items. Equally important is that you have documented (usually in their work agreement/contract) that that the option to have food and lodging provided is for the employee’s benefit, that it is just that – an option, and that they do not HAVE to live on the farm as a condition of the employment.
Paying minimum wage and accounting for food, lodging and other items is essential to ensuring that you are legally operating your internship. Also vital is maintaining Workers’ Compensation insurance. Farming, as you know, can be a dangerous occupation and the last thing you want to have happen is a worker suing for medical expenses relating to an injury sustained on the farm. Plus, this insurance is mandatory in Oregon and farmers without this insurance run the risk of hefty fines.
Related to this is OSHA (Occupational Safety & Health Act). This law requires that among other things, you maintain certain standards for worker housing and provide facilities such as hand-washing stations for employees. Complying with OSHA may help prevent injuries and resulting workers’ compensation claims.
This guide (which is not legal advice) touches upon the basic components of legal farm employment: 1) paying minimum wage and 2) itemizing deductions from the wages. Provided along with this is a PDF sample work agreement, and a hiring ‘checklist’ for farm employers. Together, these documents should give you the tools you need to run a legal farm “internship” in Oregon. Good luck and feel free to contact Rogue Farm Corps for further assistance.