Study finds California ag law reduced working hours, earnings

In 2016, California enacted Assembly Bill (AB) 1066, which removed exemptions from overtime pay requirements for agricultural workers.

Up to that point, farmworkers were entitled to overtime pay for hours beyond 10 hours per day or 60 hours per week. Workers in other industries received overtime pay for time worked over 40 hours per week.

Under AB 1066, overtime pay requirements in agriculture were brought into line with the standard for other industries. Farm workers are now to receive overtime pay for any amount of time worked per week over 40 hours.

The measure was phased in gradually started in 2019; in fact, the phase-in is not yet complete, nor will it be for firms employing 25 or fewer workers until January 1, 2025.

What have been the effects of the new overtime provisions?

“Decreases in weekly working hours and earnings for California crop workers,” says Alexandra E. Hill, an assistant professor in the Department of Agricultural and Resource Economics at UC-Berkeley, who has conducted a study on the effects of the overtime law. “These losses are consistent with employers restricting hours to avoid paying the higher overtime rates.”

Hill observed that “the law caused a large and statistically significant decrease in the number of workers working 56–60 hours a week, hours just below the old overtime threshold.” Moreover, “the proportion of the workforce that worked these hours is roughly half of what we would expect without the law in place.”

This reduction in hours was accompanied by decreases in workers’ weekly take-home pay: fewer workers earned weekly pay from $600 to $800, and more earned $400 to $500.

Hill points out three caveats: the survey did not include H-2A workers. Furthermore, it assumed that workers only have one employer, whereas some workers might have taken on additional jobs to supplement lost income. Furthermore, “estimates don’t account for changes in total employment, which may have increased while individual hours decreased.”

It is possible that workers may enjoy the shorter hours despite the lower pay, since they now have more time with their families. Furthermore, the shorter hours may improve workplace safety because longer hours are associated with increased energies. But some farmworkers may have to take on second jobs to make up the loss in income, meaning that they are working the same hours but with the added inconvenience of traveling between jobs.

Hill stresses that more research is needed to fill out these conclusions. She also suggests that approaches in other states may suggest improvements: New York State, for example, provides a refundable tax credit for overtime hours paid by farm employers.