The Changing Landscape For Agricultural Employers

On November 5, 2020, the Washington Supreme Court struck down the overtime exemption for dairy workers in Martinez-Cuevas v. DeRuyter Brothers Dairy. The decision upended the expectations of dairy farm employers based on the historical exemption for agricultural workers that had been in place for nearly a half-century. The court’s decision has far-reaching implications for agricultural employers from dairy farmers to winegrowers and everyone in between. Although the court’s decision only addressed overtime exemptions for dairy workers, agricultural employers have been understandably concerned about the uncertainty caused by Martinez. Much of the court’s reasoning regarding why dairy workers are entitled to overtime pay could be extended to other agricultural workers.

In order to address the uncertainty caused by Martinez, the legislature passed ESSB 5172. The Governor signed the bill into law on May 11, 2021. The law goes into effect on July 25, 2021 and intends to provide agricultural employers a period of transition before  drastic changes to the overtime exemption for all agricultural employees.

Phased In Overtime For Agricultural Workers.

Under the ESSB 5172, agricultural employees (including dairy workers outside of the Martinez class) remain exempt from overtime pay until January 1, 2022. Beginning in 2022, agricultural employees will be eligible for overtime and must be paid time and one half for all hours worked over 55 in a workweek. On January 1, 2023, agricultural employees must be paid time and one half for all hours worked over 48 in a workweek. The last phase takes effect on January 1, 2024 when agricultural employees are brought into line with other non-exempt employees and all hours worked over 40 in a workweek must be paid at time and one half.

ESSB 5172 Attempts To Provide Predictability Following Profound Uncertainty For Agricultural Employers Created By The Martinez Decision.

ESSB 5172 precludes the recovery of damages, penalties, attorneys’ fees and costs against agricultural employers in actions brought after November 5, 2020, with the exception of the Martinez class. While this provision seeks to minimize the surprising outcome of Martinez on dairy employers as well as other agricultural employers, it is unclear if it passes constitutional muster. The Martinez Court held that excluding dairy workers from overtime provisions violated the Washington Constitution. The legislature may simply lack the authority to insulate, at a minimum, dairy employers with the passage of ESSB 5172. The phased in approach may also fall under constitutional scrutiny for the same reasons. Based on this uncertainty, employers should review their wage and hours policies with legal counsel to determine the best strategy for their particular business.

Agricultural Employers Should Be Prepared Following The Passage Of ESSB 5172.

Despite the legislature’s effort to prevent retroactive liability for agricultural employers, those employers should remain vigilant. Any lawsuit brought under the Martinez decision should not be ignored. When a company is served with a lawsuit, legal counsel should be retained immediately.

Additionally, employers who have questions about overtime issues in the wake of Martinez and ESSB 5172 should contact an employment law attorney to review any policies or plans being considered. The attorneys at Davis Grimm Payne & Marra are experienced with wage and hour issues. Please do not hesitate to reach out. We would be glad to help your company.

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