Farm employers are reducing the hours of overtime worked by their employees due to hourly limitations established by AB 1066. Bryan Little, Director of Employment Policy with the California Farm Bureau Federation, said that the law has failed to achieve its intended purpose. It instead resulted in significant wage declines for agricultural workers while employers are scrounging for resources.
The law took effect in January 2017 phasing in new overtime requirements for farm workers over the next several years. The changes to labor regulations indicate “a very clear effect that workers are getting fewer hours and having less income as a result of the implementation of the ag overtime adjustments made from AB 1066,” said Little.
Most agricultural businesses do not have the resources to finance increased overtime wages. In turn, employers have reduced the amount of overtime hours that laborers can work in order for their business to remain competitive. Little explained that the outcome of AB 1066 was predictable. “It’s an ironclad rule of economics; the more expensive you make it to employ people, the less employment you’re going to have,” he said.
The wage declines for farm workers are also a challenge because much of agricultural production is seasonal. Laborers work for weeks or months at a time until the job is completed. Restricting the hours worked during the labor period reduces the overall income of the employee, despite the higher overtime rate.
Little mentioned that research being conducted by Alexandra Hill, professor of Ag Economics at UC Berkeley, found that within the first two years of implementation, AB 1066 principally “impacted large employers [that] would have the resources to be able to pay overtime if they need to and if it makes economic sense to do so,” Little said. Next in her line of research, Hill will consider the effects of the law on smaller employers who have fewer resources than large firms to pay for overtime work.
Prior to enactment, lawmakers had been told that AB 1066 would have the opposite effect of what the law was purported to accomplish. Ultimately, Little says the repercussions related to AB 1066 are the responsibility of legislators. “You have not increased income for agricultural farm workers and their families in the communities that they live in,” Little said, “So you need to figure out what you need to do going forward to fix the mess that you’ve made.”
Contributing Author:
Lauren McEwen
AgNet West Intern