SALEM — The Oregon Senate approved a bill on Thursday to end the agricultural overtime exemption, sinking attempts at compromise sought by farm organizations.
The House passed the bill on Tuesday. It now goes to Gov. Kate Brown to sign into law or veto.
House Bill 4002, which passed the Senate 17-10 on March 3, phases out the overtime exemption over five years while providing tax credits to temporarily compensate farmers for higher labors costs.
“Oregon’s agricultural workers should not be excluded from the same protections afforded to other workers,” said Sen. Kathleen Taylor, D-Milwaukie.
Farm groups wanted lawmakers to amend the bill so that state money would instead go directly to farm workers. The plan would have included overtime wages paid after 40 hours of work per week while allowing growers more flexibility in scheduling.
“We need to love the farmers as much as the farmworkers,” said Sen. Tim Knopp, D-Bend.
The amendment would have represented a true “victory,” as farmworkers wouldn’t face capped work weeks or job losses from automation or farm closures, Knopp said.
“That means for certain farmworkers would get the overtime,” he said.
The Joint Committee on Farm Worker Overtime rejected the amendment. Representatives faced and up or down vote unless the bill was sent back to a committee for revision.
The Senate likewise voted down motions by Republican lawmakers to send the bill to the Senate Rules Committee or Senate Finance and Revenue Committee.
“I think I had a better plan. I will be advocating for that plan in the next session,” said Knopp, who sat on the Joint Farm Worker Overtime Committee.
Under the bill passed by the Legislature, farmworkers will be owed time-and-a-half overtime wages after 55 weekly hours next year, with the threshold incrementally dropping to 40 weekly hours in 2027.
Most farmers will be eligible for one of three tiers of tax credits depending on whether they employ 25 or fewer workers, 25 to 50 workers, or more than 50 workers.
Between 2023 and 2028, tax credits will incrementally decline from 90% to 60% of overtime costs for the smallest employers, 75% to 50% for those in the middle tier and from 60% to 15% for the largest employers.
After that, the tax credits will be ended or re-evaluated by lawmakers based on economic studies required under HB 4002.
Dairies with fewer than 25 workers will receive a 100% tax credit with no time limit, while those with more workers will fall under the middle tier’s rate and timeline.
Proponents of HB 4002 argued that it will mitigate the economic shock to the farm industry from higher overtime wages while giving lawmakers time to adjust the law as it’s implemented.
“I commit to joining with others in coming years to make it even better,” said Sen. Elizabeth Steiner Hayward, D-Portland.
However, opponents countered that tax credits amount to a “stay of execution” for farms that they say will go out of business or find ways to limit employee working hours.
“The very employees we’re describing here with such compassion will become the unemployed,” said Sen. Dennis Linthicum, R-Klamath Falls.
Arguments in favor of the bill centered on extending equal protection under the law to farmworkers by ending the overtime exemption, which was described as being steeped in an 80-year history of racism.
“That particular exemption has been unfair for people of color,” said Sen. Chris Gorsek, D-Troutdale. “We obviously have a problem across our state that we need to take action to fix.”
Opponents of HB 4002 focused on the law’s practical effects, claiming it will cause family farms to sell out to larger corporate operations that can better withstand increased expenses.
“Why would we add even more cost and pressure for farms to get bigger and bigger?” said Sen. Fred Girod, R-Stayton.
The changes likely to be wrought by the bill will also hurt farmworkers who won’t see their actual incomes increase as a result, opponents said.
“Time-and-a-half for a job you no longer have is not much compensation,” said Sen. Lee Beyer, D-Springfield, who broke with his party to vote against the bill.
Under the amendment favored by Republican lawmakers, the state government would pay workers extra money to ensure they earn a time-and-a-half wage rate past 40 hours per week.
Throughout most of the year, farmers would pay the higher overtime rate after more than 48 hours worked per week, but the threshold would rise to 55 hours during a peak labor period of 15 weeks per year.
The amendment’s supporters argued it would be more effective at preserving the economic stability of farmworkers and their employers.
Critics rejected the idea due to concerns about fairness to other industries and worries that the state government wouldn’t contribute to social security insurance, worker’s compensation insurance and unemployment insurance.
Sen. Bill Hansell, R-Athena, said he was initially optimistic the Legislature would negotiate a bipartisan agreement on the issue, which failed to happen.
“What agriculture was asking for was uncomplicated and reasonable,” he said.
Instead, the Legislature stuck with a “predetermined outcome” while implementing a tax credit system that wouldn’t help the farm industry long-term, Hansell said.
“What was offered, ag did not ask for, nor did they want,” he said.