Greenhouse and Nursery Compliance

 

Greenhouses and nurseries on the Front Range of Colorado have been the target of recent audits by the U.S. Department of Labor: Wage and Hour Division (WHD).   The WHD has been targeting these employers based on the premise that they are not paying overtime to their employees. Many greenhouses and nurseries mistakenly think that they are exempt from overtime rules because they are engaged in agriculture. However, as we’ll discuss in this week’s tip, most of these employers are subject to overtime regulations and they face severe overtime liability when they are investigated by the WHD.

The Fair Labor Standards Act requires the payment of overtime after 40 hours a week for most employees. Yet it includes an exemption from overtime for employees who are “engaged in agriculture”.  Employees of greenhouses and nurseries that cultivate, grow, or harvest plants are “engaged in agriculture” while doing this work. This overtime exemption is tricky though because it is applied on a weekly basis. If an employee is engaged in agriculture and only agriculture for every hour in the entire week then he/she is exempt from overtime in that week. However, if the employee does some agricultural work and some non-agricultural work in the same week, then the exemption does not apply.

The complication for greenhouses and nurseries arises from the difficulty in defining the term “agriculture”.  Under the Internal Revenue Service regulations a plant nursery can be considered a farm for certain tax purposes.  But that does not necessarily mean that employees who work there are engaged in agriculture. It is common for greenhouses and nurseries to grow some of their own product and buy in other product from out of state. If the bought in product is to be sold immediately or repackaged for imminent sale, the care of those plants (watering, tending, etc.) is not considered agricultural work and will invalidate an employee’s exemption from overtime in the week that the non-ag work is performed. However, if the bought in product is cared for with the intent of producing substantial growth and maturity, (i.e. to be sold in two years) then the care of that plant is considered agricultural work.

Usually, greenhouses and nurseries have both types of product and the employees work on the two types every day without regard to whether or not they are performing exempt agricultural work.  If greenhouses and nurseries wish to maintain some employees as exempt from overtime they must keep detailed time records. The records must clearly indicate that the exempt employees only cared for the plants that were being cultivated, grown, or harvested and did not work on bought in product that was to be resold quickly.

We hope you found this week’s tip helpful and informative. Please pass it along to anyone in the greenhouse or nursery business.  Follow us on facebook to get the next Tip of the Week on your newsfeed!

Link: http://laborbrain.com/greenhouse-and-nursery-compliance/

–       By Kalen Fraser

The Labor Brain Inc. is not a law firm and its employees do not practice law or provide legal services.  The information provided on our website,  in email correspondence with representatives of The Labor Brain, and at outreach events is for informational and educational purposes only.  The information provided is not a substitute for the advice of an attorney.