Employers are not required to pay overtime to employees performing work that meets the definition of “agriculture” (see definition below)  In some cases they may also be exempt from paying minimum wage.

Overtime pay

Only workers engaged in agricultural employment for 100 percent of the workweek are exempt from overtime.  However, some employees of agricultural employers handle or otherwise work on products not grown by their own employer, or do not work within the definition of agriculture as outlined above and are due overtime after 40 hours. An employee who processes or handles ANY AMOUNT of another farmer’s crop is entitled to overtime under both state and federal law.  An employer should seek independent legal advice regarding their overtime obligations.

Office staff

As long as the responsibilities of the office staff are limited to duties integral to the farming operations of their employer, they are also exempt.

Minimum Wage

Exemption for small farms

Both federal and state laws provide minimum wage exemptions for “small” farms, however, the criteria are different for each. Employers in small farming operations must take care to be sure that they are exempt under each law before deciding not to pay minimum wage.

Federal criteria: If the employer did not employ more than 500 man-days of agricultural labor in any calendar quarter of the preceding calendar year, the minimum wage exemption applies for all agricultural employees for the entire following year. A man-day is any day during which an employee performs agricultural labor for at least one hour.

State criteria: If the employer did not employ more than 500 piece rate work days in any calendar quarter of the preceding calendar year, the employer’s hand harvesters and pruning laborers who are paid on a piece rate basis are exempt from minimum wage for the entire following year.

Piece rates

For the purposes of the minimum wage exemptions the payment of piece rates must be “in an operation generally recognized as piecework in the region of production.”

Ranchers

Workers who spend more than 50 percent of their time in the range production of livestock are exempt from minimum wage. To be exempt, workers must be paid on a salary basis, which is defined as 2,080 hours times the current minimum wage, then divided by 12.

Definition

“Agriculture” includes farming in all its branches. Among other things, agriculture includes cultivating and tilling the soil, dairying, producing, cultivating, growing, and harvesting any agricultural or horticultural commodities, raising livestock, bees, fur-bearing animals, or poultry and any practices performed by a farmer on a farm as an incident to or in conjunction with such farming operations, including preparing for market, delivering products to storage or to market or to carriers for transportation to market. “Agriculture” generally does not include forest products and the harvesting of timber; however, effective January 17, 2009, the federal regulation (which Oregon will follow) addressing nursery activities was amended to include the production of Christmas trees within those activities considered to be “agriculture” under the law.  As a result, workers engaged in the planting, pruning, and harvesting of Christmas trees are considered to be agricultural employees who are not required to receive overtime compensation for hours worked beyond 40 in a week.

Source:  Bureau of Labor & Industries

In order for an employee to qualify as a volunteer, these four criteria must be met:.

1. The work must be at the employee´s initiative.
2. The work must be outside normal or regular work hours.
3. The employee must be performing a religious, charitable or other community service without contemplation of payment.
4. The employee must be performing a task outside of the regular job functions performed for the same employer.

Source:  Bureau of Labor and Industries

Several states have announced increases to their minimum wages effective January 1, 2012.  These include:

• Oregon – $8.80
• Washington – $9.04

The Social Security Administration has announced that the Social Security wage limit for 2012 has increased to $110,100

The IRS has released Pension Plan limitations for 2012:

• The 401k limit has increased from $16,500 to $17,000
• The 403b limit has increased from $16,500 to $17,000
• The 457 limit has increased from $16,500 to $17,000
• The SIMPLE limit (408p) remains unchanged at $11,500
• The Catch Up limit for those age 50 and over remains unchanged at $5,500

What do employers do with uncollected paychecks which either were not picked up by the employee or were returned to the employer as “address unknown?

We recommend employers to consider the following:

• Aside from sending certified-mails to the former employee, call the person (i.e. cell / home phone) to notify him or her that paycheck(s) have been unclaimed and document when the paycheck(s) was mailed and when the employer called.
• Forward the check to the State Bureau of Unclaimed Property. Remember, the check is NOT the property of the employer.
• The state holds the items for the owner or heirs until a claim is filed to collect the property. (Note: If an un-cashed payroll check is voided, the money is then available in the company’s payroll checking account. If later the funds are not available to pay the employee or to submit to the state, the employer and officers could find themselves under a breach of fiduciary responsibility.)
• The company must report these wages on the W-2 form and pay all taxes that are due as if the un-cashed unclaimed payroll checks had been cashed on a timely basis. State unemployment reports and taxes will also need to be filed and paid as if the payroll check was cashed.
• Consider having a company unclaimed/un-cashed paycheck policy in place.