In 2022 Oregon legislators followed California and Washington State passing HB 4002, sponsored by Representative Paul Holvey (D-Eugene), an advocate of establishing overtime wages for Oregon’s agricultural workers, a group long excluded under federal law. To assist agriculture employers, the bill included a refundable tax credit against personal and corporate income taxes to offset a percentage of the additional cost paid by a crop or animal production business.

That bill anticipated the need to establish a grant, loan, or lending program and allocated $10 million for providing financial assistance to employers to mitigate the costs of compliance. The Oregon Business Development Department recommended the temporary loan program in HB 2058 to provide up to $40,000 repayable awards to agricultural employers to pay overtime compensation as a temporary loan until tax credits are received. To be eligible for the repayable award, an agricultural employer must anticipate earning less than $3,000,000 in gross income in the current year.

The legislation in 2022 established a tax credit that pays 60% if over 50 workers grading to 100% for employers with less than 25 workers, decreasing over time. But they don't see the money until tax time, so HB 2058 is intended to stuffed the gap with a temporary loan system. But in the end, taxpayers are paying for the majority of the cost via the tax credits, plus the administration of this new program.

Agricultural employers testified that by passing HB 4002 last year, which went into effect June 6, 2022, there wasn’t enough time to prepare. Even though a refundable tax credit was available for increased overtime costs, farmers weren’t prepared financially to front the added cost waiting for tax refunds. “This created a cash flow challenge, particularly for small and mid-sized grape growers and wineries who will begin seeing overtime costs as early as this spring.” They recognize that some will go out of business if they can’t adjust their business practices.

Maybe the Greater Idaho movement has picked up momentum because legislators won’t listen to farmers or are willing to look at workable alternatives. Anne Krahmer-Steinkamp said in 2022 that their blueberry operation pays pickers per unit, which works out to $25 to $45 an hour, and to pay time an a half on an already slim margin isn’t affordable.

Janice Flegel testified, “As a farm employer, HB 4002 has caused my family to reevaluate if we even want to employ workers anymore. There will be a different Oregon because of this and offering a grant/loan will not make a difference to most family farms like ours frankly, because we will have to figure out a different way to operate.”.

A D V E R T I S E M E N T

A D V E R T I S E M E N T

Sam Tannahill, President of Oregon Wine Council, said, “the reality is that the program will likely not be utilized or beneficial. As written, producers would be required to take out a loan on their payroll, then submit for reimbursement without knowing whether or not the loan would actually be reimbursed or if the tax credit would be granted. Taking out a payroll loan is not a sustainable way to run a business, nor is this a risk that many producers will be willing to take.”

These bills are focused on the employers ability to pay the overtime, but workers are seeing the consequences. Workers from both California and Washington are saying that agriculture employers are limiting workers to 40 hours, so individual workers are making less. "Workers want to put in as many hours as possible and then go back to their home country for the winter," a Washington worker said. What was once an opportunity by choice is now being limited by do-good regulations.

HB 2058 passed through Ways and Means with a unanimous vote and will go back to the Oregon House for a floor vote.


--Dollie Banner

Post Date: 2023-02-19 16:20:25

Last Update: 2023-02-19 17:19:40