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Special rules for Agriculture workers

Mar 302012

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

At-Will Employment

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Feb 282012

The common law rule regarding the employer-employee relationship allows the termination of the relationship by either party, without notice and without cause.

Oregon courts have long followed this general rule of “at-will” employment. This means that generally, in the absence of a contract or statute to the contrary, Oregon employers may discharge an employee at any time and for any reason, or for no reason at all. Simpson v. Western Graphics, 293 Or 96, 99, 643 P2d 1276 (1982); Nees v. Hocks, 272 Or 210, 216, 536 P2d 512 (1975).

Most employers choose to reserve the right to employ at will with specific language in personnel policies.

Example: “We reserve the right to employ at will. This means that employment can be terminated, with or without cause, and with or without notice, at any time, at the option of the company or at the option of the employee.”

To maintain at-will status, it´s wise for employers to indicate that policies are merely guidelines and are not to be construed as a contract.

Example: “These policies are not to be construed as a contract of employment. We expressly reserve the right to change, add to, or delete policies at any time. Changes will be effective on dates determined by the company, and you may not rely on policies that have been superseded. No supervisor or manager other than our Chief Executive Officer, Beau Lee, has authority to alter the policies, and all such changes must be in writing.”

Declaring and retaining at-will status provides an employer greater flexibility in the workplace, but being an at-will employer is not a cure-all or a substitute for establishing clear policies, keeping thorough documentation, and applying consistent disciplinary practices.

Since organizations that employ individuals at will may still be called upon to defend various types of employment claims in court or before state or federal agencies, prudent at-will employers will maintain records showing a legitimate business reason for any important personnel action.

Source: Bureau of Labor and Industries

Can an employee also be a volunteer at our organization?

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Feb 222012

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

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

Source: Bureau of Labor and Industries

Can an employer give ‘comp time’ in place of overtime pay?

Overtime rules No Responses »

Feb 152012

Only government agencies are permitted to offer compensatory time in lieu of overtime. If you are a private sector employer, you must pay overtime when an employee works over 40 hours in a workweek. (If your employee works 45 hours during one workweek, you could choose to schedule the employee for 35 hours during the following week, but that would not relieve you of the obligation to pay for the five hours of overtime during the first workweek.)

Source: BOLI

What to do with uncollected paychecks?

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Oct 042011

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.

Overtime and Joint Employment

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Sep 292011

You have an employee who is shared by more than one company. The employee works less than 40 hours in a given week at each company, but when you add the the time cards together, she worked more than 40 hours in that week. Is the employee due overtime pay?

It depends on whether a “joint employment” relationship exists between the companies.

“Joint employment” describes the situation in which an employee works for more than one employer, but the employers have enough in common to be considered “one” under state and federal wage and hour laws. And if the employers meet this threshold and an employee works for both of them in a workweek, all of the hours must be counted to determine whether overtime is owed.

Whether a particular arrangement translates into “joint employment” is based upon all the circumstances in that individual case. The courts have used the following factors to make this determination:

whether the employers share an employee’s services;
whether the employer acts directly or indirectly in the interest of the other employer; and
whether the employers are not disassociated with respect to an employee and share control of the employee; for example, where one employer controls, is controlled by, or is under common control with the other employer.

For instance, common ownership would support the control necessary to establish joint employment.

This does not mean that the employee will get paid overtime twice, but simply there is a shared obligation to compensate the employee for overtime hours paid.

Source: BOLI

Employer-Provided Cell Phones

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Sep 212011

Wondering whether company-paid cell phone service should be considered a fringe benefit, and as such added to the employee’s wages as income?

The IRS provides the following guidance:

If the cell phone is provided by the employer for business reasons (other than compensation), then it’s not considered a taxable fringe benefit. For example, if the employer needs to contact the employee at all times, or if the employer requires the employee to be able to talk to customers while away from the office.
If there is no substantial business reason for the employee to carry a company cell phone but yet the employer chooses to provide it, then it is considered a taxable fringe benefit and must be reported as income on the employee’s W-2.

Source: IRS

Employee or Independent Contractor?

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Aug 082011

Independent contractors are common in many industries. Within these industries, there is a high likelihood that businesses may believe some of their workers are independent contractors when they are not.

Also, employees who are performing services on a part-time, temporary, or probationary basis are sometimes thought to be independent contractors.

If you’re an employer and you treat someone as an employee or an independent contractor, the answer affects your bottom line. An employer will pay a percentage of an employee’s gross earnings toward taxes and entitlements such as workers compensation, Social Security, unemployment insurance, and varied retirement and health plans. Some businesses seek to eliminate these obligations and taxes to reduce business expenses.

Unfortunately, it can become much more costly to the business owner when a government auditor converts workers from independent contractors to employee status.

An independent contractor is a person or business entity which

1. is free from another’s right to direct and control;
2. is responsible to the customer only for the contracted result of the work, not the manner or method used to accomplish the work;
3. controls how the service is provided, who provides it, and the means of accomplishing it;
4. sets their own prices for goods, fees for service;
5. terminates one contract while not terminating the business;
6. terminates one contract while not creating an unemployment situation;
7. has customers and prospective customers as a result of advertising and being known by the public as a going business;
8. provides goods and/or services to a public of their own choosing.

Here are some examples to consider:

INDEPENDENT CONTRACTOR		EMPLOYEE
Free from direction and control		Means and manner of work are controlled by employer
Does tasks in own way		Does tasks the employer’s way
Has necessary skills and training to complete job		Trained by employer to perform job
Has an assumed business name		Works under the employer’s assumed business name
Has a business location		Works at employer’s business location
Performs services for multiple customers		Works for one employer, may serve that employer’s customers
Sets own hours		Works hours set by employer
Determines own price for contracted services		Accepts wage, salary, or commission determined by the employer
Not eligible for employee benefits		May be covered by minimum wage, overtime, safety, unemployment, and workers’ comp
Directly affected by business profit or loss		Not directly affected by employer’s profit or loss
Owns equipment and tools used to complete job		Employer provides and controls equipment and tools
Purchases materials and supplies needed to do job		Employer purchases materials and supplies
Personally liable for errors and/or accidents		Employer liable for employee errors and/or accidents
Files self-employment taxes. Receives a Form 1099-MISC		Does not file self-employment taxes. Receives a Form W-2 from employer
Has right to hire and fire workers		Is hired and/or fired by employer
Must legally complete each contract		May quit working for an employer at any time

These examples are meant to be guidelines only. If you need more information than presented here, let us know and we’ll put you in touch with a tax auditor to give you further guidance.

The Basic Components of a Compensation System

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Aug 022011

As a reflection of leadership’s strategy about how it values its employees, a well-established compensation system allows employers to optimize on employee engagement, productivity, financial resources, and organizational goals.

Consider the following components and how to apply them into your business today:

Organizational Goals. Make sure to pay employees for their individual performances as well as reward them for efforts which support the business goals of the company, department, and/or team.
Employee Communications. Realistically communicate the company’s compensation program. Ensure whatever the message conveys, it is done so in manner that is fair, competitive, appealing and respectable. If the market conveys a particular value and the employer offers below the market value, then employee dissatisfaction and turnover rates will likely increase.
Rewards and Recognitions. Ensure that project recognition is differentiated from individual recognition; in doing so, each employee’s value and relevance can be more easily identified.
Timely Acknowledgements. Pay attention to the timing of rewards since desired performance should be rewarded as quickly as possible.
Simple Measures. Keep performance measures as simple as possible, and limit the number of measures to track.

Taking care of employees with a well-designed and well-communicated compensation program will help in the long-term investment of your employees as the company’s strongest asset.

Source: HR Support Center

Pablo

Overtime pay

Office staff

Minimum Wage

Exemption for small farms

Piece rates

Ranchers

Definition

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