The Effect of Labor Laws On Farm Labor Costs

Based on our Labor Law Update featured in the May issue of Good Fruit Grower, page 13. 

In a way, labor costs are like taxes—they’re more likely to increase over time than decrease. Of course you value your employees and the work they do to keep your farm running, but constantly changing labor laws make it more and more expensive to manage your workforce and operate a successful farming operation. 

The Impact of Farm Labor Laws

Staying informed about the labor laws affecting your farm is one of the most critical ways to manage expenses. After all, these laws don’t just raise your direct labor costs—they can also lead to fines or put you at risk of costly litigation if you fall out of compliance. According to the Department of Labor, farm employers paid over $10 million in back wages and civil monetary penalties for H-2A violations in 2022.

The growing complexity of labor laws can also cause you to spend more time managing the related administrative and reporting requirements. And because time is money, labor law compliance can increase your overall operating expense.

Here’s how the following labor laws impact your farm’s costs:

The Fair Labor Standards Act (FLSA) And Local Minimum Wage Laws

The federal minimum wage is $7.25 per hour, but farm workers are often paid double that amount. According to a 2022 USDA farm labor report, field workers earned an annual average gross wage of $16.77 per hour, up six percent from the 2021 annual average.

Though the minimum wage can vary by location (Washington state has the highest, at $15.74 per hour), ever-increasing wages coupled with higher costs for essentials such as equipment and supplies can make it especially difficult for farmers to maintain profitability.

The H-2A Temporary Agricultural Workers Program

While the availability of H-2A visas for temporary workers makes it possible to hire the seasonal workers you need for a successful harvest, it also comes with complex requirements that increase your overall labor costs. In addition to paying for housing, transportation, and meals for your H-2A employees, you also need to comply with recent changes to the H2-A program that carry an additional price tag:

• A requirement for farm employers to pay foreign workers the highest prevailing wage rate.
• New minimum square-footage requirements for H-2A worker housing.
• New meal obligations, which include nutritional adequacy requirements.

A Solution for Managing Rising Labor Costs

At the end of the day, every farmer wants to run a profitable farming operation. But staying profitable isn’t just about raising your income. In addition to increasing your harvest yield and securing better prices, if you can effectively manage rising labor costs while complying with applicable laws, you have more opportunity to increase your profitabililty

A farm labor management solution helps you keep labor costs in check by collecting real-time data about when, where, and how productive your employees are in the field. With an easy-to-use app, you can:

• Accurately record employee clock-ins and clock-outs no matter where they are on the farm.
• Track worker productivity with real-time barrel and bushel count notes.
• Take quality control notes in the field and quickly pinpoint any areas of concern.
• View labor and production stats in real-time and integrate it all with your payroll platform.

Manage Your Farm for Better Profitability

Complying with labor laws doesn’t have to mean higher costs, but not complying can be costly in the long run. When you understand how each law affects your ability to hire and manage your employees, you can take action to keep farm activities efficient and productive—like everything else on your farm. FieldClock’s labor management solutions are designed for just that; they deliver the data you need to make more effective management decisions, saving you time and money.

Want to learn more? ​​Talk to a representative to receive a free demo and custom labor solution for your farming business.

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