JASON RESNICK | WG VICE PRESIDENT AND GENERAL COUNSEL AGRICULTURE & THE LAW
Attention “Small” Employers: You May Be a “Large” Employer and Not Even Know It New rules affecting the state minimum wage and the payment of overtime to agricultural workers have one important number in common—26. That is the number by which, for purposes of these laws, you are either a so-called “large” employer and pay a higher minimum wage and overtime after a lower threshold, or you are a “small” employer and can pay a lower minimum wage and no change to overtime, at least for awhile. But getting to 26 is easier than you might think—especially if you are a “small” employer that uses the services of a farm labor contractor. Minimum Wage
Ag Overtime Beginning on January 1, 2019, AB 1066 took effect for “large” employers, again defined as employers with 26 or more employees. “Small” employers get a reprieve until January 1, 2022. The law, which Governor Jerry Brown signed in 2016, gradually lowers the daily and weekly hours of work thresholds for paying overtime to agricultural employees. And for the first time, weekly overtime now applies to “large” agricultural employers. This means that instead of overtime being payable for all hours worked after the sixth day in a workweek, overtime also kicks in after 55 hours in a week. Weekly overtime kicks in in 2022 for “small” employers. The “rule of 26” also holds for the removal of the irrigator exemption. The exemption officially went away for “large” employers on January 1, 2019, while it remains intact for “small” employers until 2022.
Most employers with employees in California are aware that on January 1, 2019, the state minimum wage increased to $12.00 for employers with 26 or more employees. For employers with 25 or fewer employees, the state minimum wage increased to $11.00 per hour. These increases came about with the passage of SB 3, which raises the state minimum wage by $1 per year until it reaches $15.00 per hour in 2022 for employers with 26 or more employees. Employers with 25 or fewer employees hit the $15 mark in 2023. The increased minimum wage also increased the minimum exempt salary that must be paid to meet the so-called “white collar” exemptions (i.e., executive, administrative, and professional). Employers with 26 or more employees must now pay the minimum salary for exempt employees of $49,920 per year. Employers with 25 or fewer employees can pay the minimum salary of $45,760 per year for exempt employees for now.
Are You a “Large” Employer? Both the minimum wage and overtime laws hold employers with 26 or more employees to stricter standards than those with 25 or fewer. Neither law uses the terms “large” employer or “small” employer, although these terms are convenient substitutes for “employers with 26 or more employees” and “employers with 25 or fewer employees” respectively. Neither law defines what employees are counted for purposes of being a “large” or “small” employer. Because “small” employers can pay a dollar less to meet the minimum wage and do not have to comply with the new overtime requirements until January 1, 2022, many employers that are on the bubble or fluctuate between “small” and “large” depending on the time of the year, or use farm labor contractors, are confused as to whether
For Employers with 26 Employees or More
For Employers with 25 Employees or Fewer
Date
January 1, 2019 9.5 hours/day; 55 hours/week
10 hours/days
January 1, 2020 9 hours/day; 50 hours/week
10 hours/days
January 1, 2021 8.5 hours/day; 45 hours/week
10 hours/days
January 1, 2022 8 hours/day; 40 hours/week
9.5 hours/day; 55 hours/week
January 1, 2023 8 hours/day; 40 hours/week
9 hours/day; 50 hours/week
January 1, 2024 8 hours/day; 40 hours/week
8.5 hours/day; 45 hours/week
January 1, 2025 8 hours/day; 40 hours/week
8 hours/day; 40 hours/week
AB 1066 phase-in for paying overtime to agricultural workers under Wage Order 14}
26 Western Grower & Shipper | www.wga.com MARCH | APRIL 2019
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