California phased in farm worker overtime starting in 2019 for larger employers and starting in 2022 for smaller employers with 25 or fewer employees. Starting January 1, 2025, all California farm employers must pay overtime rates beginning at 8 hours per day or 40 hours per week. Very little data existed in the past to understand how overtime would affect the actual hours worked and take home pay of farm employees. Now, with a few years of earnings under California overtime, data is starting to become available to answer this question.
The article below originally appeared in the University of California’s Rural Migration News, it is reposted here in it’s entirety.
Rural Migration News
July 2024, Volume 30, Number 3
California: Overtime
Does California’s AB 1066 law, which mandates overtime pay at 1.5 times the usual wage for farm workers after eight hours of work in a day or 40 hours in a week, increase or decrease the hours worked and earnings of farm workers? There were no studies of the likely effects of AB 1066 on worker hours and earnings before AB 1066 was implemented in 2019. Three types of workers who typically work long hours were expected to be most affected: dairy and other animal workers, equipment operators and irrigators.
The question was whether farmers would pay overtime to these workers or reduce their usual hours of work.
Most evidence suggests that farm employers reduced hours. The USDA Farm Labor Survey found that the average weekly hours of directly hired California workers fell relative to the average weekly hours of all US directly hired farm workers. In 2016, California’s directly hired farm workers averaged 2.7 more hours a week than all US farm workers. That fell to +1.9 more hours a week in 2019, +0.1 hours in 2021, and -1 hour in 2023, which means that directly hired California farm workers averaged an hour less per week in 2023 than all US farm workers.
The NAWS interviews 500 to 600 California crop workers a year. Workers reported fewer hours worked during the previous week in 2019 and 2020 than in 2018; overtime pay began in 2019, and 8/40 overtime was required for employers of 25 or more workers in 2022. A quarter of the crop workers interviewed in 2019-20 reported working 46 to 50 hours a week, another quarter 36 to 40 hours, and about an eighth each reported 41 to 45 and 51 to 55 hours.
An analysis using NAWS data concluded that SB 1066 led to fewer hours and lower weekly earnings, especially for workers who had been employed more than 50 hours a week before 2019. NAWS data suggest that employers tried to avoid paying overtime by limiting most workers to 40 hours a week, which meant lower weekly earnings for workers who had been employed for longer work weeks.
American Community Survey data based on interviews conducted with workers in their homes also found reduced hours of work for California farm workers. ACS Q40 asks how many weeks the respondent worked in the previous 12 months and Q41 asks how many hours per week the respondent usually worked when they were employed, so ACS data on average hours per week reflect recall responses.
ACS Q42 asks for the name and type of employer, allowing the ACS to impute the industry or NAICS code of the employer where the respondent worked the most hours and the respondent’s occupation and duties. Q43 asks for the respondent’s income over the past 12 months, including income from wages and salaries, investments and public assistance.
The ACS found that the usual weekly hours of California farm workers fell from 42.5 in 2018 to 40.5 in 2021 and to 39.6 in 2022, and the share of farm workers employed more than 40 hours a week shrank. However, nominal farm worker earnings rose in lockstep with minimum wage increases, and rose especially rapidly between 2021 and 2022.
The most comprehensive data on farm worker earnings are from the employment and earnings data reported by farm employers when paying UI taxes to EDD. The UI data do not include hours worked, but they provide a count of all hired workers on the payroll for the pay period that includes the 12th of the month and all earnings paid to all workers each quarter.
EDD can extract earnings data of all California workers who were employed during other payroll periods by farm employers and assign them to the NAICS commodity of the employer where the worker had his/her highest earnings. The result is a census of primary farm workers, or workers whose highest earnings were with a California farm employer (NAICS 11), and then distinguish between a crop employer, a strawberry employer, or a dairy employer.
EDD data find an average 724,500 primary farm workers between 2018 and 2021, with a drop of one percent between 2018 and 2021. The number of primary crop workers fell four percent during these years, the number of primary vegetable workers fell 10 percent, and the number of primary grape workers fell 30 percent. The number of primary animal workers fell two percent, while the number of primary crop support workers rose by two percent, including a five percent jump in primary FLC workers to 333,000, meaning that 333,000 or 46 percent of all primary farm workers had their highest earning job with a FLC.
The EDD data permit analysis of changes in average annual earnings by commodity or NAICS of the employer. Average annual earnings for primary crop workers rose between 2018 and 2020, and then fell sharply between 2020 and 2021, down 15 to 20 percent in most commodities. The drop in the average annual earnings of primary farm workers may reflect the demand for workers falling faster than supply during covid and employers reducing the hours of workers to avoid paying overtime wages.
The Central Coast Alliance United for a Sustainable Economy (CAUSE) and the Mixteco/Indigena Community Organizing Project (MICOP) held a march April 28, 2024 in Santa Maria to demand higher piece rate wages for picking strawberries, which are typically $2.50 per flat of eight one-pound clamshells. The two NGOs argued that piece rates must increase to allow farm workers to afford to live in Santa Barbara County.
Over 100 workers and their supporters demonstrated in May 2024 at a wine event in Healdsburg demanding at least $25 an hour or $250 a ton to harvest wine grapes.
Employers need reliable information to make good decisions. Employee compensation is a critical part of attracting and retaining high-performing employees. Managers need accurate and detailed data to compare how they are doing relative to others in the industry. Cornell Ag Workforce Development will run the 
