Do You Understand the New Overtime Rules?

July 20, 2016 01:27 PM
Do You Understand the New Overtime Rules?

Farming is the kind of job that happens 24 hours a day and seven days a week, year-round. Time on the clock adds up quickly, which is why producers need to educate themselves on the new final rule on overtime pay within the federal Fair Labor Standards Act. Agriculture workers are exempt, but some people on your payroll might be subject to the rules that go into effect Dec. 1—particularly if you operate a seed business, a creamery or a farm stand. Who Qualifies? Across all industries, 4.2 million workers will be affected by the changes, according to the U.S. Department of Labor. Farm workers must be paid for all work hours, says Paul Neiffer, CPA and principal at CliftonLarsonAllen and a Top Producer columnist.

A farm employee who works 46 hours in a week must be paid for all hours worked, but not at time-and-a-half rates for hours over 40. The final rule continues to exempt executive, administrative and professional workers for overtime laws. At the same time, it increases the weekly salary required for them to be exempt from overtime. The rule sets the annual standard salary level at $47,476 or $921 per week. Workers who are not farm labor and make less than that are entitled to time and a half over 40 hours. Some top operators will discover their operation might employ overtime-eligible team members:

• Office Workers. “Farmers can only have office workers meet the new exemption if they are paid more than $921 per week,” Neiffer says.

• Seed Business Sales Staff. Any team members employed solely by a seed business do not work in agriculture. They must receive overtime if they earn under $47,476. These rules do not apply if you sell only seed grown by the farmer.

• Farmstand or Creamery Workers. Vegetable farms often have a farm stand, and dairies frequently have a creamery. People employed in either may be eligible for overtime pay if they are selling products not raised by the farmer.

Seek Expert Counsel. Producers are exempt from overtime laws if they use less than 500 man days of agriculture labor in a calendar year. Man days are those on which an employee does ag labor for at least one hour. Consult your accountant and attorney on your situation.

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Spell Check

Beethoud, CO
7/20/2016 06:54 PM

  Government out of control and over reaching. You pay a man a salary year round but now I have to pay overtime? What about the wage he takes during the winter when there's no work. It was a fair deal for both of us and we were both happy. Now a beaurocrat has to tell me I'm not paying a fair wage? Im pissed!!

saltillo, TX
7/20/2016 10:25 PM

  I went to the local USDA office, the office personal and I were discussing this issue. Maybe the government would understand if the actually stuck to their own rules. They do not pay overtime out in as a financial sum the USDA employees are actually forced to take extra time off for the trade off of hours and it is based upon a hour overtime a hour extra vacation not and 1 1\2. The government couldn't even get that write by bending the rules.

Boston, MA
7/21/2016 07:45 AM

  Is this the governments way of saying its time to raise food prices via the governments war on its citizens more pay=more taxes=more inflation=more death to senior citizens cause their pay doesn't increase...??


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