Editor’s note: This is part of an ongoing a series exploring the current state of labor in the fresh produce industry.
Last fall, Mark Hambelton, co-owner of Double M Orchards in Quincy, Wash., faced a tough decision: Should his crews make a second pick on his 11-acre organic gala block or not? Hambelton said it was a tough year for that particular block with smaller fruit size and less color than he’d like.
Crews picked about 65% of the block and waited for the rest of the apples to size and color up, he said. But when it came time for that second pick, he realized it would cost him more to go in for a second pick of the organic galas than it would be to move on to other higher-value varieties.
“With having to pay overtime to harvest them, it would have cost us more,” Hambelton said. “We would have gone negative on our return. We would have picked that fruit and then actually gotten a bill [for the labor].”
He said that scenario played out a couple of times on his 587-acre apple and cherry farm — it would have cost him to harvest the fruit by having to pay his crews overtime.
“If we would have had up to 50 hours a week for six weeks — which Washington has been pushing on for a while — we could have used a day to have done that, and we would have been closer to breaking even on that block, versus knowing that we would have gone into a deficit on it by picking at the overtime rates.”
Overtime and ag
In the past, agriculture workers were exempt from overtime laws, but states have increasingly cracked down on exemptions, which has directly impacted both growers and workers, produce industry experts say.
Overtime laws for agricultural workers working more than 40 hours in Washington state went into effect in 2024. The 40-hour threshold has been in place in California since 2022. Oregon reduced its overtime threshold to 48 hours this year and New York reduced its overtime threshold to 56 hours this year, too. New York plans to reduce its threshold by four hours every other year to reach a 40-hour threshold by 2032.
Jon DeVaney, president of the Washington State Tree Fruit Association, said the fresh produce industry advocated for the exemptions to remain for agriculture, citing weather, fluctuating schedules and a perishable crop. He said before this threshold went to 40, he and others expected the legislature to look at the restaurant and retail industries as examples to move toward a 40-hour threshold instead of taking a hard look at how harvest works on farms and how realistic a 40-hour threshold would be for agriculture.
“When we were talking to our state legislature — which we predicted would happen — is that they would look at the retail and restaurant environment and others that have highly variable work schedules and fluctuations in demand where it doesn’t really end up resulting in a lot of overtime for workers,” he said. There’s a lot more defined schedules.”
DeVaney said, instead, now growers have to choose which blocks to pick to stay profitable and workers often have to find a second job to help offset the lost hours in a work week.
“Workers who want more hours have to find a second or third job, just because there’s not the ability [for the grower] to pass that incremental cost increase on [to the consumer],” DeVaney said. “So, workers either are not getting the hours that they want and they’re having to work a schedule with so many days a week at this farm, and then a couple of days a week at this other farm, and that’s how they get back to where they were before these changes took effect.”
Growers’ labor costs continue to rise according to data from the Northwest Horticultural Council, jumping from 37% in 2013 to 70% in 2022 to 99% in 2023. Produce industry members say the additional burden of overtime makes it an almost impossible situation for growers.
“When you have a producer who’s already losing money, their labor is their highest cost already,” he said. “The idea that past 40 hours you can afford to pay time and a half is just a non-starter. There’s no financial way for most producers to do that, only in limited cases where that action pays off with a high-value variety or to save the crop.”
The other troublesome thing, DeVaney said, is these overtime laws have created additional unintended consequences of food waste from growers deciding not to pick orchard blocks.
“We hear anecdotes about growers who had to say, ‘Well, I’m not going to finish picking this block. I’m moving on to something else,’ or ‘I just won’t pick this one at all because it’s right at the same time as something of higher value, and I would have to be paying people overtime to do both,’” he said. “It has resulted in some food loss and waste. You can’t justify finishing all of that available work within the 40-hour week.”
And he’s seen growers also offer different schedules to work around the overtime laws.
“We’ve also seen some adjustments to behavior with those constraints. [Growers will] offer 10 hours of work four days a week and then some employees find a second job at a different farm for a couple of days a week.”
Effect in California
Ali Hill, an assistant professor in the Department of Agricultural and Resource Economics at the University of California, Berkeley, has studied the effect of overtime laws in California since its addition in 2019 and subsequent threshold reduction since then. She said what she found is that growers did cut hours to avoid paying overtime.
“In the first four years of the law on average, workers were working five fewer hours per week and they lost about $100 on their weekly paycheck,” she said. “Which works out to the average worker being paid just above the state minimum.”
Hill said, though, that while those who introduced and passed the overtime law in California wanted to help ag workers, she wonders what good it did.
“I think the overtime law was incredibly well-intentioned, and conceptually, I fully agree that people should be compensated for working really long hours,” she said. “I just also think it wasn’t very clearly thought through in terms of what would be the repercussions. And my fear with it is that it resulted in workers having to pick up second jobs.”
Hill said a major challenge to these overtime laws is the cost of the produce grown isn’t increasing at a point to help growers offset the additional costs.
“We pass all these laws to improve working conditions and then have nothing that mandates that we have to purchase in a way that reflects that,” she said. “And so you just get really heavy pressure from buyers to keep your costs low, but you have this legal constraint of rising input costs, which leads you to [what we saw in the Pacific Northwest where] 99% of profits going to labor.”
Change in behavior
Hambelton said the 40-hour threshold has changed the way he runs his crews. He said outside of harvest or “crunch time,” crews worked 40 hours maximum.
“When it came time for our cherry harvest, our harvesting crews worked up to 40 hours a week,” he said. “We did that over six days a week. Our support staff, our tractor drivers, our foreman and all those guys on that team work the hours that they needed to work to support those other guys. They had some overtime. We did the same thing in apple harvest just to try to control the cost.”
Hambelton said his crews are an integral part of his operation, but unfortunately, with the rising costs on inputs, rising wages and everything else that goes into farming, the additional cost of overtime is almost too much.
“I’m trying to, trying to make it right with the employees,” he said. “These guys that are these guys help us run a farm — they’re very valuable to us. But, our main year-round guys are working 40 hours a week, and they’ve seen impacts on their gross pay actually coming down from two years ago.”
And he doesn’t see that changing. It’s either leaving fruit on the tree or not being able to manage the costs associated with overtime.
“Looking at that overtime wage, that’s a make-or-break decision,” he said. “People ask ‘Why are you leaving that fruit on the tree?’ Well, because it’s going to cost us more to harvest it than we’re going to get a return on it,” he said.
DeVaney said Washington had a relatively favorable harvest season and a smaller crop, which he suspects minimized the true impact of the 40-hour threshold in its first year.
“You had really favorable weather for being able to pick and a crop that was about 3% smaller than last year’s,” he said. “Less total work to get done, and great conditions for getting it done that even with that limitation, it didn’t bite as hard as it probably will in future years.”
In a season where growers might have to dodge inclement weather, a grower might have to play catch-up and run crews more in a day to get fruit off the trees in a compressed schedule. For example, if a crew only worked 20 hours one week, but needs to make up for lost time, the grower doesn’t get credit for going under 20 hours one week.
“At that point you’re not getting credit for the 20 hours you didn’t work the previous week, as you try to make up the lost ground in the subsequent week, you’re still going to have that 40 hours no matter what,” Devaney said. “That’s where it’s going to create constraints on what hours employers can offer workers. As those schedules get disrupted by weather events at some point that will happen, then you’ll really see the consequences.”
Your next read in this series:
- What Does the Future Hold for Labor in an Ag Tech World?
- Will Autonomous Harvest Reach the Goal Line?
- What You Need to Know About the DOL’s New H-2A Updates
- What Workers Think of the Dignity Act
- Farmworkers Say Their Role Is Essential ‘All the Time’
- ‘Crisis’ Point: Urgency Builds for Immigration Reform in Agriculture
- Growers say the current state of H-2A is untenable
- Much work remains to solve ag labor issues
