It is a busy time of year for most farmers and if this season’s “to-do list” includes hiring some new or seasonal employees, make sure you avoid these four labor law mistakes:
1. Neglecting the I-9 Process
The Form I-9 Employment Eligibility Verification process is both a federal legal requirement and the basis of a very important legal defense. The I-9 form aims to verify the identify and status of every person hired to work for wages or any other type of compensation. The I-9 form has 3 sections. The first section requests personal employee information (name, address, e-mail, phone number, date of birth and social security number and citizenship status). The second section requires the employer to physically examine documentation (passports, driver’s licenses, social security cards) presented by the employee proving identity and employment authorization. The third section must be completed if the employee is not a U.S. citizen or lawful permanent resident and his or her employment authorization documentation has expired.
So why is this form so important? One reason is because completing an I-9 form is legal requirement for all new employees and failure to follow the procedure can lead to penalties. Once properly completed, this form is the employer’s defense against a potential claim of knowingly employing an unauthorized worker. An employer has a duty to inspect employee documents and as long the documents reasonably appear genuine and belong to the worker presenting them, and the employer has recorded this inspection properly on the I-9 form, the employer has the basis of a valid defense if the U.S. Immigration and Customs Enforcement later finds the worker is unauthorized to work. For complete information about I-9 compliance, check out the “Handbook for Employers – Guidance for Completing Form I-9” on the U.S. Citizenship and Immigration Services I-9 Central website.
2. Failing to Pay the Minimum Wage
There are some exemptions from the general requirement of paying minimum wage for farmworkers but each exemption needs to be examined and applied carefully to avoid underpayment of wages. The federal Fair Labor Standards Act (FLSA) and some states such as Maryland exempt certain seasonal hand-harvest laborers, the immediate family members of agricultural employers, and some small farms from the requirement of paying minimum wage. A small farm is exempt from paying employees minimum wage if the agricultural employer did not utilize more than 500 man days of agricultural labor in any quarter of the preceding calendar year. These exemptions may seem clear but the tests can be difficult to apply. For example in applying the 500 man day test, if a farmworker does any non-agriculture related work such as painting an employer’s house in the same workweek as he performs agriculture work, the employee is not exempt for the entire week and the minimum wage requirements of the law apply. A final note on minimum wage is that in Maryland the minimum wage will automatically increase to $8.75/hour on July 1, 2016 except in Prince George’s and Montgomery counties which have a minimum wage of $9.55/hour.
3. Misclassifying Employees as Independent Contractors
The misclassification of an employee as an independent contractor can have significant financial and legal consequences for employers. Generally, an employer is not required to pay independent contractors minimum wage nor is the employer required to pay unemployment tax, social security tax and/or workers’ compensation premiums. Which workers are independent contractors? A signed agreement declaring that a worker is an independent contractor is not, by itself, enough to establish the relationship. Federal and state governments consider many factors which generally address the economic reality of the work relationship, specifically, whether the worker is economically dependent on an employer who can allow or prevent an employee from working. For more information, access the U.S. Department of Labor (DOL) Fact Sheet: “Am I an Employee? Employment Relationship Under the Fair Labor Standards Act” available on the DOL website.
4. Not Adhering to the Migrant Seasonal Agriculture Worker Protection Act
The Migrant and Seasonal Worker Agricultural Protection Act (MSPA) is a federal law protecting migrant and seasonal agricultural workers. If seasonal workers are required to be away from their permanent residence while performing the seasonal agricultural work, they will be considered migrant workers and if not, they will be considered seasonal workers. The MSPA requires employers to do a number of things, including but not limited to, provide employees with disclosures prior to the initiation of employment regarding the place of employment, wages to be paid, types of work to be performed, the period of employment, transportation, housing, and workers compensation benefits. Employers must also provide employees with detailed pay stubs showing their hours worked, including earnings and deductions, and retain copies of payroll records for a period of 3 years. Employers must also post worksites with a poster detailing the rights of workers pursuant to the MSPA.
Employers should take the time to fully adhere to federal and state labor laws when hiring new and seasonal employees this spring to prevent potentially costly and time consuming future legal ramifications.