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Nov 12, 2020

WASHINGTON: Agriculture exemption from overtime takes a hit

Labor RelationsSafety and HealthWage and Hour 

The Washington Supreme Court recently ruled the state’s agricultural exemption from overtime doesn’t apply to dairy workers, in a case with widespread implications for all agricultural employers. Under Washington’s Minimum Wage Requirements and Labor Standards Act, employees must generally be paid overtime for all hours worked over 40 in a workweek, unless a specific exemption applies. The agriculture exemption, which has existed in Washington for over 60 years, generally allows employers to avoid paying overtime to workers who are employed on a farm in connection with farming operations (RCW 49.46.130(2)(g)).

A group of dairy workers brought a class action lawsuit challenging, among other things, the agricultural exemption from overtime. The workers argued that allowing agricultural employers not to pay overtime provided a privilege to the industry that violated Washington’s constitution, which mandates protections for workers in extremely dangerous conditions.

In a groundbreaking decision published last week, the court agreed with the workers, throwing aside the decades-long exemption as it applies to dairy workers. First, the court determined that Washington’s constitution intended to prevent favoritism and special treatment for select individuals (e.g. corporations), to the disadvantage of others (e.g. workers). The court then applied the portion of Washington’s constitution that mandates protections for workers in particularly dangerous industries, deciding the dairy’s workers performed extremely dangerous jobs. Specifically, the court found the work was performed 24 hours per day, 365 days per year, and workers labored in dangerous conditions (including working over 40 hours a week over 80 percent of the time; suffering a high injury rate compared to other industries in the state and the agriculture sector specifically; worker exposure to physical strains, respiratory hazards, and toxic chemicals; and the risk of contracting diseases and injuries from the animals). Putting this all together, the court concluded the minimum wage act was adopted to protect workers from these kinds of dangerous conditions, and there was no reasonable basis for granting the agriculture exemption specifically in the case of these dairy workers. As a result, this employer will be required to pay overtime to these workers going forward, along with having to pay their attorneys’ fees. The employer may also owe back wages, penalties, and interest, depending on how the rest of the lawsuit plays out at the trial court level (Martinez-Cuevas v. DeRuyter Bros. Dairy, Inc., Wash, Nov. 2020).

Tips: If you’re in the dairy industry, you should immediately stop using the agriculture exemption from overtime for workers like the ones at issue in this case. You will need to pay overtime for these employees, effective immediately, unless another overtime exemption applies.

If you’re an agricultural employer outside of the dairy industry, you should expect scrutiny if you are using the exemption from overtime, including possible legal action from current or former employees. This means it’s extremely important to compare your situation to the discussion in this case and consider ways to mitigate your risks. For example, if your organization or your industry’s subsector has a high injury rate, if your workers are exposed to hazards, or if they work significant amounts of overtime, it’s possible a court could determine that the agricultural exemption from overtime shouldn’t apply to your workers. If that happens, you could be on the hook for back wages, penalties, interest, and attorneys’ fees for both current and former employees (possibly going back three years). To address this risk, we recommend making sure you’re complying with all other wage and hour requirements (e.g. tracking and paying appropriately for all hours worked, providing proper meal and rest periods, complying with paid leave laws, etc.). You should also consider budgeting for the possibility of being forced to pay overtime (both retroactively for the previous three years, and moving forward), limiting the amount of overtime being worked, speaking with your litigation attorney about the pros and cons of mandatory arbitration agreements, ensuring your operation’s hazards are reduced as much as possible, and putting together a communication plan to address employee concerns and questions. If you’re uncertain about how this decision applies to your organization, or need further guidance on this issue, please contact your Vigilant Law Group employment attorney.

This website presents general information in nontechnical language. This information is not legal advice. Before applying this information to a specific management decision, consult legal counsel.

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