Are You a Farm Labor Contractor? The Answer May Surprise You.
Season 3, Episode 1 – Agriculture is big business in many rural areas of the country. And when you hire farm laborers, you may actually be a farm labor contractor. So what does this mean? How does this affect you as an employer and business owner? There are important rules about how farm laborers are to be treated, big fines if you don’t comply with applicable laws, and—of course—paperwork to properly file along the way. Ready to learn more? Listen to this podcast episode as JDSA attorney Lindsey Weidenbach presents: Are You a Farm Labor Contractor? The Answer May Surprise You.
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Host: Farm labor contractors. Agriculture is big business in many rural areas of the country, so if you work in the Ag industry, how do you consider yourself a farm labor contractor? How do you know? Whether you're an employer or employee in the Ag industry, this episode is for you.
In this episode of JDSA's Law Talk, attorney Lindsey Weidenbach joins the show to discuss farm labor contractors and how to know if you are one. Lindsey, always fun to talk to you.
Lindsey: Good to see you, Clint.
Host: Not necessarily a fun topic, though. Are you telling me that there are some employers out there that don't even know they're a farm labor contractor?
Lindsey: Here in Washington? Absolutely.
Lindsey: Yeah. It's complicated.
Host: I'm sure it will be. Well, that's why you're here. You're here to suss out the details and make it understandable for all of us folks. We're going to talk farm labor contractors and whether you are one. That's coming your way next, right here on JDSA's Law Talk.
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Host: Remember, if you have a question about today's topic or a topic suggestion for a future episode, email us at email@example.com. I'm your host Clint Strand, talking with featured attorney Lindsey Weidenbach about farm labor contractors.
Lindsey, let's begin with the basics. When we say farm labor contractor, what do we mean?
Lindsey: Well, we mean an agricultural employer who has workers that are working on multiple farms. If you have an LLC, a block of orchard that's owned by one LLC right next door to a block of orchard owned by another LLC, even if they have the same parent company, and you have workers that jump that property line, you are a farm labor contractor.
Host: Same trees. No partition. Looks like the same acreage. For all the worker knows, they're working on the same plot of land, but they could be a farm labor contractor.
Lindsey: The employer, at that point, is a farm labor contractor unless they're giving their employees two paychecks, one from block A and one from block B, but most farmers don't do that. It would be extremely cumbersome to track. Most have a common paymaster, a common entity that pays their employees no matter what block they're on.
If you have segregated your orchards into separate companies but you pay your workers out of one central payroll company, then you are a farm labor contractor.
Host: My head hurts already. Give me the history on this. How exactly did this whole deal come about?
Lindsey: Well, we have to really rewind a long ways and go back to the 40s and the 50s when people were abusing their workers. You would find these crew bosses that gathered workers. They were typically folks that were poor and maybe illegal. They said, "Hey, I have work for you." So the crew boss would gather this crew. They'd go over to the farmer and say, "Do you need help with your harvest? I have this crew." Farmer says, "Yes." Workers do the work. Farmer pays the crew boss. Crew boss never turns around and pays the workers.
Lindsey: And these disenfranchised, maybe undocumented individuals had no recourse. They had no way to say to the local government or the police, "I didn't get paid" because they were afraid to come forward.
So the federal government actually rolled out the Federal Farm Labor Contractor Rules. In those rules, in the Department of Labor, it said, "If you are an agricultural employer under the definition that we're giving you, you're exempt from these rules" because the Department of Labor said, "If I can find you, crew boss, then I don't need to make you register as a farm labor contractor."
The folks that needed to register, as farm labor contractors under the federal rules were those that could disappear, those that could really just turn into dust and we could never find. But if you owned land or you ran a business, you didn't need to register federally.
Host: So if there was a path to accountability, then these laws didn't necessarily apply? But, looks unintended consequences…best of intentions…unintended consequences. Why is this policy important, then?
Lindsey: In Washington, what's important is that the definition of a farm labor contractor doesn't exclude agricultural employers. If you're an agricultural employer, you are not excluded from registration under the Washington version of the Department of Labor's standards, and you need to register as a farm labor contractor.
Host: I imagine that you have orchardists and farmers that have done this, second, third generation, that are staring at you with their jaws on the floor, saying, "Lindsey, what?"
Lindsey: They didn't believe me.
Host: But yet, I'm sure some of these court cases with these judgments probably made their attention snap up.
Lindsey: Yeah. So what happened is we had a case out of Yakima that came down, and it said, "No, the Washington statute's different than the federal statute."
Host: I'm going to hold you right there.
Host: Because here's the deal. This is what's commonly known as a tease.
Host: The fine is going to make your jaw drop on the floor. We're going to talk about that coming your way next, right here on JDSA's Law Talk.
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Host: Don't forget; find other episodes of JDSA's Law Talk on iTunes, the Google Play store, or wherever you find fine podcasts like this. This is JDSA's Law Talk. I'm Clint Strand, talking with our featured attorney, Lindsey Weidenbach, about farm labor contractors. I said that right, yes?
Host: All right. Just before we went to break, we talked about some of the stakes for these growers that may not even know that they are a farm labor contractor. You may look at the details and say, "That's silly. That defies common sense. Forget this. I'm going to do it the way that I've done it before." But these fines can make you think twice.
Lindsey: They're very scary. The case that these came out of is called Saucedo. What happened in that case was that the court said, "Look, you're a farm labor contractor, but you weren't registered as one." There are penalties for not registering, and there are penalties for not showing your employee your license card.
So by not registering, you're automatically violating two statues, $500 per statue, per employee for three years.
Host: Oh, dear.
Lindsey: Right. So per violation, per employee, and they can look back three years. The monetary damages in the case that came out, I believe it was in the Yakima area, were tens of millions of dollars.
Host: Tens of millions of dollars. So it's financial suicide not to pay attention to this and make sure that you're on the right side of the law.
Lindsey: It could put you under. Right.
Host: Okay. So if you're a grower, and you're listening to this, and you're picking your jaw up off the floor, what are some of the compliance requirements that you need to get familiar with real fast?
Lindsey: First of all, you need to register. It's a simple process. There is a $35 filing fee. You need to get a few forms from the state and one form from the IRS, and then you get your license.
Then, you need to sign an agreement with every single one of your employees, which, that sounds easy to do, but if you think about these big packing houses, the Stemilts of the world, got thousands of employees. Every single one that's considered an agricultural employee, meaning anybody that's out there actually doing the non-packing, in the trees work, needs to come in, sign one of these forms on a yearly basis, and they need to have certain disclosures given to them in both English and Spanish.
Host: Okay. Very good. What if you're an orchardist that's just listening to this, and you're trying to do right, you're trying to get right by the rules? Are you still on line for massive fines if you come in and say, "Look, I didn't know about this."
Lindsey: If they didn't know, and they didn't register, they can still, unfortunately, be held accountable.
Host: All right. But it's better to be on the right side of the law now than incur more fines in the future. Yes?
Host: So what are some other factors that employers need to factor in when we're talking about this here?
Lindsey: This one I bring up only because it's just so strange and you absolutely wouldn't think about this as being a violation, but one of those regulations says that you are a farm labor contractor if you're transporting employees between farms.
If you are the driver, Clint Strand, individual driving the vehicle, you're getting paid to drive, and you're taking worker from farm A to farm B, not only is your employer a farm labor contractor, but you individually are a farm labor contractor.
Host: Me? Me the employee that's getting paid X amount per hour?
Lindsey: If you are getting paid specifically to drive, if your paycheck says that you have an extra stipend for driving, then yes. You need an individual license.
Host: What if my job description says, "And other duties as assigned" and I'm not getting paid money specifically to drive these people?
Lindsey: If it's just part of your duties and it's not on top of your pay, then you are not a farm labor contractor.
Host: All right. Good to know. See, these are the details we need to know.
Lindsey: It's a strange one, so that's why I like to bring it up because it can really bite you.
Host: Okay. The devil really is in the details here, so let's talk about application and compliance. We talked about one little, granular detail right there as far as driving, but what else is involved?
Lindsey: Right. This is through labor and industries, but they want you to get a compliance certificate from the Department of Revenue and from Employment Security. They want to know that you're paying your employees and you're paying your taxes. They also want the IRS to weigh in and say the same thing. Are you paying your taxes federally?
As long as those industries, those agencies weigh in and say, "Yes, this is a good actor", they'll turn their compliance certificates in with their application. You also need a bond, so you contact your insurance company. Depending on how many employees you have, you have a bond from anywhere between $5,000 and, I believe, the top is $20,000.
Host: Okay. So the application process, we've talked about that. Once you finish up with that, do we see the light at the end of the tunnel or is that just the train? Is there more to come?
Lindsey: You have to do it every single year.
Host: Oh, boy.
Lindsey: You have to register every year, and your employees need to sign new forms every year, but, really, once you've done it once, it's not a big deal. We do not have issues from clients that are upset about it anymore after they get through the first round of it.
Host: It's really just getting the ball rolling.
Host: Lots of detail here talking about farm labor contracting with Lindsey Weidenbach. We will bring it all together coming your way next, right here on JDSA's Law Talk.
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Host: Remember, you can always connect with us on Facebook and follow us on Twitter. Just search for @JDSALaw. This is JDSA's Law Talk. I'm Clint Strand, talking with our featured attorney, Lindsey Weidenbach, about farm labor contracting and if you, indeed, are one. Lots of detail here, so let's look at it from the 30,000 foot view and bring it all together. What would you like to hammer home on this?
Lindsey: I would just like to reiterate that all agricultural operations have to carefully evaluate their business structure in the context of these farm labor contractor rules. This court decision really increases your exposure for anybody who employs agricultural workers, and we've been assisting clients in this area for many years. We know these rules backwards and forwards. We're here to help.
Host: Ignorance is not a credible legal defense.
Lindsey: It turns out it's not.
Host: I know. That's why we need to talk to the folks over at JDSA Law, and you can check them out at jdsalaw.com. Lindsey, always a pleasure. Thanks so much.
Lindsey: Thanks, Clint.
Host: And thank you for joining us for this episode of JDSA's Law Talk. Remember, if you have a legal matter and require solid legal advice, connect with a member of the JDSA Law team at jdsalaw.com. You can also hear Law Talk episodes on other topics and submit your questions or suggestions for a future show.
I'm your host Clint Strand. Thanks again for joining us on JDSA's Law Talk.
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