Last week, Senator Shannon Grove (R-Bakersfield) introduced legislation to create a tax credit for agricultural employers to help cover the costs of providing overtime wages to farmworkers. SB 628, co-sponsored by California Association of Winegrape Growers (CAWG) and California Farm Bureau, aims to ensure that farmworkers have more opportunities to earn overtime pay while also providing relief to struggling agricultural businesses.
“California’s farmers and farmworkers are the backbone of our agricultural economy. Unfortunately, overtime mandates have made it harder for farmworkers to get the hours they need and for growers to get their product to market,” said Senator Shannon Grove. “SB 628 is a commonsense solution that ensures farmworkers have more opportunities to earn, while providing relief to our agricultural businesses who sustain the world’s food chain supply.”
SB 628 would do the following:
- Establish a payroll tax credit allowing agricultural employers to offset the cost of overtime wages paid to their ag employees. NOTE: “Overtime wages” means the difference between the employees’ overtime rate of pay and their regular rate of pay.
- Help increase available overtime hours for farmworkers, boosting their take-home pay, and supporting much-needed financial stability in rural California.
“In 2016, when AB 1066 (Gonzalez) was approved to phase in agricultural overtime, growers warned that this new law would ultimately reduce farmworkers’ earnings,” said Natalie Collins, President of the California Association of Winegrape Growers. “Today, with the smallest winegrape harvest in 20 years, growers are struggling to stay in business. If legislators genuinely want to increase take-home pay for farmworkers, growers are going to need support from Sacramento to make it possible. CAWG thanks Senator Grove for her leadership on this important issue.”
“California farmers are incredibly resilient, but it is no secret that agriculture faces significant economic challenges,” said California Farm Bureau President Shannon Douglass. “Research has shown that placing the burden of overtime wages on farmers came at the expense of both farming operations and the families of farm employees. Senator Grove’s agricultural overtime tax credit bill is a sensible solution that will enable farmers to continue producing food while providing a real and richly deserved boost in take-home pay for farm employees. It is an investment in our food security and rural communities and in the long-term sustainability of production agriculture in California.”
Recent research supports these concerns. A 2023 study by the University of California, Berkeley (“California’s Overtime Law for Agricultural Workers: What Happened to Worker Hours and Pay?” ARE Update 27(1): 1–4. University of California Giannini Foundation of Agricultural Economics) found that California farmworkers have been earning less since the “Phase-In Overtime for Agricultural Workers Act of 2016” became law. The study concluded, “This early evidence suggests that the law may not be benefiting the workers they aim to protect.”
SB 628 follows the lead of other states that have recognized the unintended consequences of agricultural overtime laws and acted to ensure farmworkers can still earn overtime pay:
- Oregon offers a refundable personal or corporate income tax credit for employers based on overtime wages paid to agricultural workers through 2028.
- New York offers a similar tax credit through 2032 that is based on the eligible overtime agricultural businesses pay.
Together, Senator Shannon Grove, CAWG and the California Farm Bureau are advocating for a policy that both increases farmworker earnings and provides relief to an industry facing unprecedented financial challenges. California must ensure that policies designed to help farmworkers do not inadvertently reduce their wages.
