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June 2012 Archive for Labor Matters

RSS By: Dairy Today: Labor Matters, Dairy Today

Experts cover today’s key dairy labor issues and offer fool-proof techniques to optimize employee performance, sat­isfaction and longevity.

Wage and Hour Lawsuits Attack the Dairy Industry

Jun 24, 2012

Employment lawsuits are among the fastest-growing areas of litigation. Do you have a plan to demonstrate compliance?

Anthony Raimondo 2010 06 photoBy Anthony P. Raimondo, attorney

Wage and hour litigation is the fastest-growing type of litigation in the U.S., especially in California. While the problem may be more acute in California than in other parts of the United States, dairy producers nationwide have seen a growth in these lawsuits against dairies.

There is only very limited insurance coverage available for dairies, and the cost of defending these cases is very high. As a result, many dairies find themselves in the uncomfortable position of spending money to defend themselves, or settling the case early to control costs. It is critical for dairies to examine their practices in order to avoid becoming a target of this type of lawsuit.

While wage and hour laws can vary greatly from state to state, there are common practices that can create exposure to liability. All dairy producers should consult with a qualified labor attorney in their state to make sure that their practices comply with state and local laws and regulations.

The Fair Labor Standards Act (FLSA) is the federal wage and hour law that applies to almost all businesses in the U.S. While many states have laws that are more favorable to employees than the FLSA, for practical purposes the FLSA sets the floor for wage, hour and recordkeeping requirements. When state laws are more favorable to employees, employers must follow the state law, but at minimum, must follow the federal law. While the FLSA does not regulate matters like meal and rest breaks, it does provide for minimum wage, overtime and recordkeeping requirements.

Under the FLSA, agricultural work is exempt from overtime but not from minimum wage. However, this can be a trap for agricultural employers. For example, traditional dairy work such as milking, feeding and caring for livestock is considered agriculture and is exempt from overtime. But in one case, the court decided that a dairy’s operation processing compost was not agricultural for purposes of the exemption, and the dairy faced liability for unpaid overtime.

While core agricultural functions such as planting, harvest, milking, and care and feeding of livestock are clearly agricultural and are exempt from overtime, many activities associated with agriculture may not be considered agriculture for purposes of the exemption. Dairy employers should consult with agricultural labor counsel to make sure they are properly paying overtime.

Of course, many states have laws that provide overtime for dairy workers. In California, agricultural employees are entitled to overtime after 10 hours of work in a day and on the second consecutive day of work in a single workweek. All dairy producers should be familiar with their state overtime laws, and must be careful to be in compliance.

Many states have detailed wage and hour laws that can lead to exposure to liability. In California, the law regulates recordkeeping, meals and breaks, equipment provided to workers and other items. There is also a comprehensive penalty scheme that makes seemingly minor violations serious financial issues. Every dairy producer should be very careful to comply with all laws and regulations that govern the employment relationship.

There are many common practices in the dairy industry that lead to liability, as follows:

• Recordkeeping: Many dairies do not have time records at all, or do not keep accurate time records. This is a critical mistake that must be avoided. If an employer does not have time records, the employee can claim any number of hours, and the employer will be forced to disprove the employee’s claims, which can be difficult. Some dairies make adjustments to time records to avoid overtime, or to prove that meal periods were taken, and the time records lose credibility because they have been altered. Time records must be complete, and they must be accurate. Functions such as automatic deductions for meal period time must be avoided in order to have an accurate tally of hours worked.

• Daily Rates and Salary Pay: Generally speaking, it is perfectly legal to pay daily rates or salaries to dairy workers, but overtime must be paid when required. In some states, employers can have agreements in place for a salary or daily rate to cover both regular and overtime hours, but such agreements typically have to be in writing. Of course, if hours are not properly recorded, the dairy will not be able to show that the pay is enough to cover minimum wage, and will not be able to show that there is no overtime owed.

• Equipment: In most states, employers must provide all equipment that is necessary for the work. Many dairies do not provide rubber boots, and it is difficult to argue that rubber boots are not necessary to work on a dairy. Discipline can be imposed if a worker loses the boots or fails to take care of them, but most states do not allow the employer to recover the cost of lost or damaged items from an employee’s wages.

• Wage Deductions: Other than deductions that are authorized by law, such as taxes, garnishments and similar items, employees must authorize deductions from their wages in writing. If an employee pays rent for housing, or if the dairy lends the employee money, the dairy can only take payments through a payroll deduction if the deduction is authorized in writing.

• Housing: Housing must be maintained according to applicable state and federal regulations, and employers are almost always required to bear all maintenance costs. In many cases, the value of housing can be credited toward minimum wage, but in many cases a written agreement is required.

• Meal and Rest Breaks: While not all states have laws regulating meal and rest breaks, these are favorite claims in states that have such laws. Employers must understand their obligations, and have a plan in place to demonstrate compliance.

Employment lawsuits continue to be one of the fastest growing areas of litigation in the U.S., and many dairies have been targeted. In most cases, there is no insurance available to cover these claims, which can be financially devastating. It is essential for dairy producers to know the laws in their state, and to have a plan to demonstrate compliance.

The goal of this article is to provide employers with current labor and employment law information. The contents should not be interpreted or construed as legal advice or opinion. For individual responses to questions or concerns regarding any given situation, consult with Anthony Raimondo at McCormick Barstow LLP in Fresno, Calif., at (559) 433-1300.
 

Voters Hold the Key to the Future of Immigration Reform

Jun 15, 2012

Because the House and Senate will substantially impact 2013 and beyond, it’s worth looking at the Congressional election picture.

Miltner photo   CopyBy Ryan Miltner, attorney

Ryan Miltner will speak at Dairy Today’s 2012 Elite Producer Business Conference Nov. 6 in Las Vegas. Click here to learn more.

I think it’s officially time to write off immigration reform for this Congress. With less than five months between now and the November election, Congress will be hard pressed to pass those bills that it must consider, let alone address issues as divisive as immigration. Even if one of the two houses of Congress were to pass a bill addressing any aspect of immigration enforcement or reform, the chances that the other house, controlled by the opposing party, could or would pass such a bill are slim to none.
 
In that scenario, where the immigration can gets kicked down the road yet again, the makeup of Congress following the election will have a substantial impact what might transpire in 2013 and beyond.  In that case, it is worth looking at what the Congressional election picture looks like.
Starting with the House of Representatives, where Republicans currently hold a majority of 51 seats, polls are showing tight races, with either Democrats or Republicans holding slight leads, depending on the particular poll.  Even with abysmally low approval ratings (Congress’s approval rating is at 17%), incumbents are almost always favorites leading into House elections. What public opinion surveys show repeatedly is that voters might be upset with Congress but are far less frustrated with their member of Congress. 
 
Of the 25 House races identified by Real Clear Politics as the most likely to switch parties, 13 are currently held by Republicans. More importantly, of those 25, 11 are open seats. Open seats traditionally are more likely to switch from one party to the other. And of the 11 open seats, six are currently held by Republicans. Let's assume that Republicans lose all six of those open seats, and the remainder of the top 25 races stick with the current party holding the seat. We end up with a Republican majority of 39 seats. Turnout for the Presidential election will be critical, but it looks now as if Republicans maintain a substantial majority in the House.
 
Turning to the Senate, the current split is 53 to 47 in favor of Democrats. Polling data on individual Senate races is more available than for House races. So, we have much more to go on in looking at what might be expected after November. Of the 33 seats up for election, five Republican seats and seven Democratic seats are considered “safe.” Of the remaining 21, five are considered likely Democratic seats, while one is considered likely Republican. All of these seats are holds for the respective parties, except for two that swap--a wash. That leaves 15 seats up for grabs, with Republicans needing to win eight to gain control of the Senate.
 
Looking at those 15 individual races, 11 are currently held by Democrats. While all these races are considered competitive, the task ahead for Republicans to pick up four of eleven Democratic seats is a big task. There are open Democratic seats in Connecticut, Hawaii, New Mexico, North Dakota, Virginia and Wisconsin. Polls show that Republicans’ best chances in these contests are North Dakota, Virginia and Wisconsin. If all other competitive races remain in control of the party currently holding the seat, and Republicans pick up those three, we have a Senate tie. In that case, the Vice President would be the tie-breaker, and the Presidential election could determine effectively whether there is a split Congress or one with very tenuous Republican control.
 
What does this hold for immigration reforms? Well, if we end up with a split Congress again, probably more of the same--slow, lumbering discussions and minimal progress. If we end up with Republican control in both chambers, then expect a real uphill battle for comprehensive reforms. And if the Democrats pull off what looks like a long shot, wresting control of the House and holding the Senate, the chances of incremental progress might look a bit brighter. But recall that very scenario existed in 2009 and 2010 and resulted in --- nothing.
 
And finally, remember that five months are an eternity in politics. Everything I just analyzed might prove wrong by the time summer gives way to fall. Keep watching.
 
Ryan Miltner is an agricultural and estate planning lawyer in private practice. His agricultural practice is focused on dairy policy and the economic regulation of the dairy industry. The opinions in this article are his own observations prepared for Dairy Today and do not necessarily reflect the opinions of any of his clients. Contact him at ryan@miltnerlawfirm.com.
 

One Strategy for Correcting Employees at Work

Jun 08, 2012

Try this in your milk parlor.

Duvall, Shaun pro photo 1 11   CopyBy Shaun Duvall, Puentes/Bridges
 
In my last column, I talked about the reasons to adopt a positive attitude on your dairies. Placing the focus on the positive rather than the things that go wrong is a big advantage. Assuming that your employees want to do the right thing rather than assuming they are out to get you makes your life and theirs much better.
 
What are the advantages to you of adopting a primarily positive outlook? Let’s spend a little time examining that.
 
The most important thing first: Think about yourself. How do you feel when a consultant or banker or someone else gives you only negative feedback?
 
It doesn’t feel so good, does it? Telling you the things you are doing incorrectly, and not recognizing what you do that is good. It either makes us feel defensive, like, “##$$&&*, I am doing a good job,” or the proverbial tail between the legs, “Wow, maybe I really am not that good.”
 
Both of these responses are useless. The first makes you refuse to look at how you might improve, and the second makes you refuse to look at what you might be doing well. Both raise your stress levels, and don’t help you be a better producer. Over time, it sets up a really negative mindset that colors many decisions you make.
 
I say these things because they affect people in many walks of life the same way. Just because you are a dairy producer doesn’t mean that yours is the only industry to be convinced of the importance of adopting a negative mindset. It is just that negative begets negative. Once you get in that rut, it is hard to get out of it.
 
So, I might suggest the following: The next time you want to make a correction in the parlor, focus first on what they are doing that is correct. Let’s say that they are connecting units too soon. I might suggest that you first say that you know they are trying to work in a speedy way, and thank them. Then say something that you have observed that they do really well. Say they get excellent coverage dipping the cows. Tell them that, reiterate how important that is, and how that has maybe saved you X dollars in milk quality or whatever. Tell them you value their hard work, and ask them then, could they please do you a small favor? Ask them to please follow the prep procedure so that the cows aren’t being milked too early.
 
In other words, look first at what they are doing really well. Stress that, and make the correction the small thing and the recognition of something well done the big thing. Just reverse the order.
Try this for a few meetings, and see if you AND your employees don’t walk out of that meeting feeling much more positive and much better. You might find that your job is much more enjoyable, and you’ll smile more, and work and stress out less.
 
I’d love to know how this works for you. Try it and email me! Let me know: shaunjd@tds.net.
 
Puentes/Bridges is a nonprofit organization that, under Shaun Duvall’s direction, promotes cultural understanding, particularly in the dairy industry. Duvall also operates SJD Language & Culture Services, LLC, a translation and interpretation business. For more information, contact Shaun Duvall at shaunjd@tds.net or (608) 685-4705.
 

Beyond Cows: Managing Additional Labor

Jun 01, 2012

Bigger herds have created a new mind-set for managing people.

Gary Sipiorski VPBy Gary Sipiorski, Vita Plus Corporation
 
As an agriculture lender working with dairy producers, I had the opportunity to help many expand their dairies. It was critical that these dairy producers not only had the financial means to add cows and facilities, but it was important that they had the mental ability to manage additional labor.
 
When you think about the technical advances that have occurred, it has only been in the last 25 years. In a traditional business as the dairy business is, it has always been easy to get caught up in a rut. After all, cows are creatures of habit. They like being treated the same way every day, day after day. They do not like change. In the past, many dairy producers approached their business the same way -- with few changes. Add to that mix that many dairy producers did not want anyone else milking their cows. Then, as now, every dairy producer knows that milking time is one of the most important activities on a dairy. Cows and those doing the milking wanted that time to be as comfortable as possible.
 
Therefore, there was a huge mindset change for many dairy producers as they went from 80 cows to 300, 500, 1,000, 2,000, 4,000, and even more cows are coming under a single ownership. Thus, one of the first questions I always asked an expansion candidate was, “Do you like working with people”?  This question was asked even before financial statements were discussed. 
 
In my book this was, still is and will remain a key part of success on any dairy where more than just the owner and the family milk cows. It was interesting at times to hear some of the comments ranging from yes, to no, to “I hadn’t thought about that.” The key point is dairy producers were going from managing cows to managing people. Large dairy producers who had a few generations under their belt already understood this mindset.
 
So, how did the successful expand and the expanding dairy producers do it?  First, when a dairy is expanded, you cannot do all the work yourself.  Hired employees are a must. Secondly, you have to train employees and give them responsibilities without looking over their shoulders every time they make a move. Expanding producers need to understand that people want to be treated with respect, regardless of the important or menial job they are given to do.
 
A job description should be completed for every task on the dairy.  When employees are hired, they need to know what their job is, what is expected of them and who their supervisor will be. Questions need to be asked of potential employees regarding their skills, what they have done before and who else they have worked with. Skills have to be matched to responsibilities, such as computer skills, math skills, mechanical skills, cow care or general milkers. 
 
Calf-caring skills are probably the toughest to find. Generally, women have done a great job in this area, yet I have seen plenty of detailed orientated men do an outstanding job in this area as well. A probationary period should be set to evaluate the new employee to make sure he or she fits in and is capable of doing the job at hand. If people do not work out after two discussions, do not wait too long to let people go. Allow them to find another job. The worst thing you can do is hold on to the wrong people too long. It affects everyone else.
 
Dairy producers who know they may not be the best people-person will hire a human resource person to do the hiring, set up training and evaluate personnel. The dairy needs to be large enough to have someone like this on the payroll or it may have a family member or other key person on the dairy taking care of the personnel. 
 
All of agriculture relies heavily on immigrant labor. It goes without saying that proper identification and paperwork in the files are musts. I have seen a few good immigrant individuals bring in others who they know can fill the jobs and they can work with. Someone needs to have some basic bilingual abilities. There are individuals or dairy-related companies that have staff that can help out with specific training. 
 
There are consultants who can be hired to assist with personnel plans as well. These are people who work with other dairies and have three-ring booklets with tried and proven methods and procedures. 
 
There are some parts of the U.S., such as the Western States, where they have dealt with hired labor for a number of generations. Taking a trip to some of these areas has proven valuable to many successful Midwest and Eastern dairy producers who have only expanded into larger herds in the last 25 years. 
 
Regardless of the technology today or in the future, having hired labor will continue to be an important part of the business of milking cows. Keep sharpening your skills in this area. 
 
Gary Sipiorski has a long career in the banking industry, doing business primarily with dairy producers. He has been associated with the Citizens State Bank of Loyal, the Graduate School of Banking in Austin, Texas, the Independent Community Bankers of America, the Governor’s Task Force on Growing Agriculture in Wisconsin, and the Advisory Council on Agriculture, Industry and Labor for the Federal Reserve Bank of Chicago. In 2008, he joined the Wisconsin-based nutrition firm, Vita Plus Corporation, where he is dairy development manager. Contact him at 608-250-4267 or GSipiorski@vitaplus.com.
 
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