A Lewiston dairy farm has been ordered to pay $86,385 in unpaid wages and damages following an appellate court ruling stating that the farm violated state labor laws. Daley Farms refused to pay 46 employees over $43,000 in overtime wages. Another area farm, Hader Farms, of Zumbrota, agreed to $17,633 in back wages in a recent settlement with the Minnesota Department of Labor and Industry (DLI).
The July 2012 court ruling ended a six-year legal battle between Daley Farms and the DLI. The appellate court's decision clarifies and perhaps changes how Minnesota labor laws apply on the farm.
Daley Farms is a well-respected name in local agriculture. It hosted the Winona Chamber of Commerce Night on the Farm in 2009 and in June 2012—a month before the appellate court decision. Land Stewardship Project spokeswoman Barb Nelson said the folks at the Daley Farm are good people. "Everybody looks up to them," she said.
But in 2006, Daley Farms received an order of compliance from the DLI, telling it that it had to pay its workers overtime. Presumably, employee complaints alerted the DLI to the situation. Daley Farms appealed the order.
At the heart of the farm's objection was whether its workers met an exception to the state overtime requirement. Under the Minnesota Fair Labor Standards Act (MFLSA) farm workers must be paid time-and-a-half after 48 hours of work in a week, unless they earn a weekly salary greater than the wages for 48 hours at minimum wage plus 17 hours of overtime. According to the appellate court decision, Daley Farms argued that its workers did earn more than that and thus fit the exception. The DLI maintained the exception did not apply because the workers were paid by the hour, not through a salary agreement.
Daley Farms challenged the DLI orders through various channels over the next five plus years. At one point it seemed like the farm might prevail.
In 2008, an Administratve Law Judge recommended the DLI stand down, because of a 2006 case in which state courts ruled the exception did apply to an hourly laborer whose earnings exceeded the salary threshold.
However, the DLI was unwavering. It dismissed the recommendation and issued a final order to Daley Farms to pay back wages plus damages.
Daley Farms appealed that order with the state appellate court. However, when the court reached its decision last July, it backed the DLI.
In the 2012 decision the court held that the 2006 case did not constitute a legal precedent because the court was "not presented with the question of whether the exemption is limited [by the DLI's regulatory power] to employees paid on a salaried basis." The court also ruled, that although federal labor laws do not require farm workers to be paid overtime, farms must follow Minnesota laws which do.
DLI Commissioner Ken Peterson said there is a misconception among farmers that the federal overtime exemption for agricultural laborers supersedes state law.
"To some extent I think that Daley Farms was trying to test that whole question," Peterson continued. "That is why they litigated it. And I don't blame them for that. They are making sure we are enforcing the law correctly. At the same time, I think we were right from the beginning."
Organizations: labor violations are a big problem in Minnesota agriculture
The Daley Farms case made recent news because of a report issued by the Land Stewardship Project (LSP), Central Campesino, and the Latino Economic Development Center (LEDC)—advocates for sustainable agriculture, Latino and migrant farmworkers, and Latino-owned business, respectively. The report outlines the two cases, which had largely escaped the public eye, and labor law violations the organizations say are a widespread problem in Minnesota, especially among illegal immigrants.
While the DLI said that immigration status is not something that it checks, and therefore could not say if the workers at Daley Farms were illegal immigrants, the content of the LSP, LEDC, and Central Campesino's report and the fact that the DLI brought up the Daley Farms and Hader Farms cases during a discussion of alleged labor abuses against illegal immigrants with the three organizations, raises the question.
In any case, according to the organizations, there are other cases of labor violations against illegal immigrants. The organizations say they have documented cases of "failure to provide a final paycheck after an employee's resignation or dismissal," "failure to pay for all hours worked," "docking of worker wages for damage to farm equipment or buildings," and "failure to inform injured workers of their rights to workers' compensation."
Central Campesino has received reports of abuses like this for years, Executive Director Ernesto Velez Bustos said in the report. "This is wage theft."
Yolanda Cotterall, spokeswoman for the LEDC, said that labor abuse among undocumented workers is a wide spread issue in Minnesota. While her organization is not meant to take reports of labor abuse, the stories keep coming.
LSP spokeswoman Barb Nelson also said that labor law violations against illegal immigrants is a wide spread problem in Southeastern Minnesota. She has heard several complaints personally, she said. She spoke highly of Daley Farms, and said that if labor violations occurred there, they are "absolutely" occurring elsewhere.
"It's a farmer's responsibility to understand labor laws," she added. "I'm not really compassionate for people who violate them."
Being poor and being an illegal immigrant are both factors which make people vulnerable to labor violations, Cotterall said. And farm workers are disposable, she added. "People are lined up for these jobs in rural communities."
"Undocumented workers hesitate to say anything for fear of deportation," Nelson said.
"Imagine a workforce that has no voice," Cotterall said. "How do you make sure that they are treated justly if they don't speak?"
DLI Commissioner Ken Peterson admitted that the fear of deportation creates a "chilling effect" for would-be reporters of labor law violations, though the DLI protects the anonymity of complainants.
The LSP has asked the University of Minnesota to better promote education for producers on labor laws, to educate workers of their rights (including posting information in workers' native language on the farm), and to research the issue of labor violations and the treatment of immigrant workers.
Farm Bureau: violations are not the norm
"Hispanic labor is an important part of agriculture in Winona County. How many are legally here or not—that is unknown," Winona County Farm Bureau President Glen Groth said. Farmers are not allowed to question workers' immigration status beyond asking for a social security card. "Often times farmers have no way of knowing, until the government sends them back," he said. "That is why some kind of immigration reform is so desperately needed for our industry."
Hispanic labor is important, he said, because farmers cannot find enough local people willing to do the work, even for 10 or 12 dollars an hour wages. Conversely, "A lot of the immigrant labor see it as an opportunity," Groth said. "They are here to work long hours."
Groth said that all of the people he knows pay their workers overtime and offer wages well above minimum wage.
Area farm owners "don't treat these people like dirt," he said. "They treat them like family." Farmers know they cannot operate their farms without good help, and many immigrant workers "move into management positions, and become an integral part of the operation," Groth said.
Nelson concurred that she knew of employers who help their immigrant workers as if they were family. "The saddest part of the whole thing is that the violators give everyone a bad name," she said. "People will start to think that everyone who hires Hispanic workers are treating them badly."
"Employers are doing what they need to do to. To say that abuse is widespread is an error and not representing the reality of the situation," Groth said.
Groth added that he would like to see Minnesota labor laws match federal laws, and that the Farm Bureau has considered lobbying for the removal of the state overtime requirements for hourly agricultural laborers. "I think it makes a lot of sense," he said. "The nature of agriculture is that it is seasonal and the work week doesn't always stop at 48 hours. A lot of farms are willing to pay their workers more to have good people on hand when they need them."
Winona Chamber of Commerce President Della Schmidt expressed concerns that complying with stricter labor laws may put Minnesota farms at a disadvantage. "When farms on the other side of state lines have more agribusiness-friendly policies, that is concerning for us."
A recent proposal in the state senate would increase minimum wage and overtime requirements for a variety of businesses including agriculture (see story).