Oregon Governor Signs Ag Overtime Law

House Bill 4002, which will phase out Oregon’s agricultural overtime pay exemption, has been officially signed by their governor, Kate Brown. 

Under the law, Oregon farmers now will be required to pay workers time and a half after 55 hours beginning in 2023 and incrementally dropping to 40 hours in 2027.

In a letter to legislative leaders, Gov. Brown wrote, “This policy will make a significant difference in the lives of farmworkers and their families.”

Oregon dairy farmer, Derrick Josi, better known for his TDF Honest Farming social media accounts, wasn’t surprised it passed both the Senate and House and was then signed by his governor.

Josi, along with his family, milk 500 Jersey cows on the Tillamook, Oregon coast and has 12 employees. With construction to add a new parlor and barn underway on his farm, his number of employees will likely increase. He says that farmers will find a way to deal with the proposed overtime law.

“We always do,” he remarks.

Tami Kerr, Executive Director with Oregon Dairy Farmers Association, shared that the bill disproportionately hurts smaller dairy farms in Oregon.

“We fully expected the Governor to sign the Ag OT bill,” Kerr says. “It is so disappointing to have legislation moving forward when nearly everyone knows how flawed it is. It will hurt both employees and employers. We are committed to finding a workable legislative solution and hope future legislators from both parties with work with us to find a compromise that benefits both employees and employers.”  

Mary Anne Cooper, vice president of government affairs at Oregon Farm Bureau, commented that farmworkers will lose out.

“We think this legislation will have devastating consequences for our family farms and their employees, will likely result in significantly reduced farm employment in Oregon, and is really going to change the landscape of Oregon agriculture,” Cooper remarks.

Tax Credit

A tax credit will be given to Oregon farmers to help offset the rising costs of labor stemmed from paying overtime. Farms will be divided into three tax credit tiers based on the number of their employees.

Farmers who employ fewer than 25 workers would qualify for tax credits of 90% of their added overtime payments next year, which would decrease to 60% in 2028, after which they’d expire.

Due to the 24-7 care that goes into running a dairy farm, dairy would be treated differently. Dairy farms with less than 25 workers would be eligible for a tax credit rate of 100% of overtime payments, while those with more employees would qualify for a rate that incrementally shifts from 75% in 2023 to 50% in 2028, its final year.

“Dairy is standardized work,” Josi adds. “If we have to, we can adjust and hire someone else to keep our employees under 40 hours. Other farmers don’t have that luxury.”

 Josi shares that currently he doesn’t have any problems with retaining employees, but states that “there is nobody out there to hire.”