Employee Benefits and Compensation

Why do Employee Benefits and Compensation matter?

The Department of Labor Wage and Hour Division has published general information concerning the application of the Fair Labor Standards Act (FLSA) to agricultural employment. The FLSA is the federal law which sets minimum wage, overtime, record keeping, and child labor standards. Virtually all employees engaged in agriculture are covered by the Act in that they produce goods for interstate commerce. DOL’s Fact sheet dictates Agriculture to include farming in all its branches when performed by a farmer on a farm or as an incident to or in conjunction with such farming operations.

Within Agriculture there are some exemptions which exempt certain employees from the minimum wage provision, the overtime pay provisions or both:

  • Employees who are employed in agriculture as that term is defined in the Act are exempt from the overtime pay provisions. They do not have to be paid time and one half their regular rates of pay for hours worked in excess of forty per week.
  • Agriculture does not include work performed on a farm which is not incidental to or in conjunction with such farmer’s farming operation.
  • Agriculture does not include operations performed off a farm if performed by employees employed by someone other than the farmer whose agricultural products are being worked on.
  • Any employer in agriculture who did not utilize more than 500 “man days” of agricultural labor in any calendar quarter of the preceding calendar year is exempt for that current calendar year.
    • A “man day” is defined as any day during which an employee performs agricultural work for at least one hour.
  •  Agricultural employees who are immediate family members of their employer.
  • Those principally engaged in the range production of livestock.
  • Local hand harvest laborers who commute daily from their permanent residence, are paid on a piece rate basis in traditionally piece-rated occupations, and were engaged in agriculture less than thirteen weeks during the preceding calendar year.
  • Non-local minors, 16 years of age or under, who are hand harvesters, paid on a piece rate basis in traditionally piece-rated occupations, employed on the same farm as their parents, and paid the same piece rate as those over 16.

Typical Issues on Employee Benefits and Compensation

Incorrect Record Keeping

Not keeping or incorrect record keeping of names, addresses, DOB, hours worked, etc. can be a liability for employers.

Overtime Pay

Employers should ensure they avoid failing to pay overtime to employees whose jobs are related to agriculture but which do not meet the definition of agriculture contained in the Act.

Joint Employer Liability

Ag employers and farm labor contractors can be held liable if either party fails to comply with the law.

Employee Benefits and Compensation
Primary Issues:

In addition to adherence to the FLSA and its exemptions, many employers engage in non-wage benefits packages or incentives to engage and retain their employees. Employee benefits are optional, non-wage compensation provided to employees in addition to their normal wages or salaries. These types of benefits may include group insurance (health, dental, vision, life etc.), disability income protection, retirement benefits, daycare, tuition reimbursement, sick leave, vacation (paid and non-paid), funding of education as well as flexible and alternative work arrangements.
For the Agricultural Employer community, some types of benefits are more feasible than others given some of the seasonal and temporary nature of the work.

NCAE Policy Papers on Employee Compensation and Benefits:

Other Resources:
INTERNS: Jackson & Lewis Publication on “Primary Beneficiary” Test – Determining Employee Status of Unpaid Interns.

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While the NCAE focuses on advocating for Agricultural Employers at the national level, we also aim to serve as a reliable resource for our members. If you have a question or concern, send us a message.