By Natalie Willis, Reporter, Valley Ag Voice
After California passed agricultural overtime law AB 1066 in 2016, farmworkers earned $6 million to $9 million less than they would have made without the legislation. According to a study by Alexandra Hill, UC Cooperative Extension specialist and assistant professor in UC Berkeley’s Department of Agricultural and Resource Economics, AB 1066 led to sizeable decreases in weekly working hours and earnings, which employers were forced to restrict to avoid paying higher overtime rates.
The law, implemented on Jan. 1, 2022, requires any work performed by California crop workers that exceeds 12 hours in one day to be compensated for twice the regular pay rate. Prior to its passing, California ag workers received overtime pay for working over 60 hours per week, but the new law changed overtime to over 40 hours.
Hill’s research found that the law may not benefit the workers it aimed to protect as it results in lower pay, and workers with families depending on the lost income to cover living expenses may need to look for additional employment opportunities.
“At one extreme, if individual worker hours and wages remain unchanged after the laws are implemented, workers would benefit from higher incomes for the same time at work,” Hill said. “At another extreme, if employers reduce hours to remain below the new thresholds, worker incomes could fall, making workers who value the extra income more than additional leisure time worse off.”
In the years following the phase-in of this overtime law, agricultural employers followed suit in reducing worker hours, hiring additional workers, and investing in technology. Meanwhile, workers who used to earn higher weekly earnings decreased by roughly one-third, and most workers have shifted to lower earnings from $400 to $500 a week.
“To put these earnings changes in context, the 2020 California minimum wage for larger employers was $14 per base hour or $21 per overtime hour. This implies that a $100 decrease in weekly earnings would occur with a reduction of seven base, or five overtime, hours in a week,” Hill said.
Before the law was passed, employers expressed concerns that the new law would not only hinder farm production but would ultimately hurt their employees. A study conducted by Highland Economics predicted that AB 1066 would reduce farmworkers’ incomes and farm production — thereby harming the economy.
Hill noted that the decreases in average wages might be a positive change for those who desire more leisure time and could also improve workplace safety. Still, it is a detriment to workers who depend on the additional income.
A similar law was enacted on Jan. 1 in New York, increasing overtime pay for any work over 56 hours, a decrease from 60 hours last year. The law will utilize a similar “phase-in” process until reaching the overtime threshold limit of 40 hours by 2032.
New York farmers have expressed concerns over this law and have already begun reducing farmworkers’ hours.
