CANBY, Ore. — Over the years, Amanda Staehely says she has come to develop close relationships with her employees at Columbia Nursery.

The small farm near Canby, Ore., specializes in growing maple trees and conifers for wholesale customers. Workers do a little bit of everything, from grafting seedlings to pruning, fertilizing and fixing broken equipment.

“First and foremost, when they come to work, we care about them as people and friends,” Staehely said.

But a new state law requiring that farmworkers must receive overtime pay has presented a major challenge for Oregon farmers like Staehely.

Last year, state lawmakers passed House Bill 4002, ending a longstanding agriculture overtime exemption and requiring employers to pay farmworkers time-and-a-half for any hours above a certain threshold.

The law took effect on Jan. 1 and will be phased in over the next five years.

In years one and two, employers must pay agricultural workers overtime for any hours worked over 55 per week.

Starting in 2025, the threshold will be reduced to 48 hours per week, and then drop to 40 hours by 2027.

Staehely said she thinks her workers deserve to be paid overtime. But in practice, the issue is more complicated than that. The seasonal nature of farming, combined with shrinking profit margins, has many growers worried that they cannot afford to pay higher hourly wages.

Amendment proposed

Rep. Shelly Boshart Davis, R-Albany, and Sen. Bill Hansell, R-Athena, are sponsoring bills in the legislature that would amend HB 4002. The measures would set the agriculture overtime threshold at 48 hours, except during “peak labor periods” — such as harvest — when it would be 55 hours.

Businesses could designate peak labor periods for up to 15 weeks per year, and they would not need to be consecutive.

The proposals also call for establishing the Agricultural Worker Overtime Relief Fund, with $50 million from the state general fund to help farms cover overtime costs.

Farmworker unions, including Pineros y Campesinos Unidos del Noroeste, or PCUN, oppose the bills. Ira Cuello-Martinez, the group’s policy and advocacy director, said the Legislature “has more pressing work to do than rehashing arguments against basic equality for farmworkers.”

But without changes, farmers say they will be forced to reduce hours, grow less labor-intensive crops or turn to automation to survive. That means workers will be earning less, not more, as the law intended, they added.

Nursery

The nursery industry ranks at the top of Oregon’s most valuable agricultural commodities, with more than $1 billion in annual sales.

Jeff Stone, executive director for the Oregon Association of Nurseries, said the industry competes against southern states such as Tennessee, Florida and Georgia that have lower transportation and labor costs, along with more predictable growing seasons.

For example, the minimum wage in Tennessee is $7.25 per hour compared to $13.50 per hour in Oregon. About 75% of Oregon’s nursery stock is shipped out of state, and 44% of it goes east of the Mississippi River, adding transportation costs, which have also been increasing.

While Stone is adamant that Oregon nurseries raise higher quality plants, increasing costs can quickly price them out of the market.

“People will only pay so much for a plant,” he said. “Math is math. Markets are markets.”

Kyle Fessler, who oversees greenhouse production at Woodburn Nursery and Azaleas, said the cost of inputs — such as fertilizer and natural gas needed to heat greenhouses — have also increased by 25% to 35% in recent years.

The nursery is the state’s largest greenhouse business, with several hundred acres of indoor and outdoor growing space.

With agricultural overtime, Fessler predicted hours will be reduced industry-wide. Some nurseries may approve limited overtime, he said, though the bottom line is businesses will be forced to change how they operate.

“It’s really a false promise made to these farmworkers,” he said. “They’re not going to end up making any more money. They’ll just be reduced in their hours.”

Staehely, at Columbia Nursery, said that has already led to difficult discussions with her employees.

Whereas in the past she and her husband, Wayne, have had no problem allowing workers to pick up extra hours on weekends, that will likely end once the overtime threshold goes down to 40 hours.

“It’s hard, as an employer,” Staehely said. “We want to help them financially, if they need it.”

The five-year phase-in period does buy them time to figure out how they will manage, she said. Automation is one option but expensive for small farms such as hers and not always able to perform delicate tasks that require human hands.

“Unfortunately, it will mean more work for my husband and I,” Staehely said.

Tree fruit

Mike Doke, executive director of Columbia Gorge Tree Fruit Growers, said many growers are still unsure how they will cope.

“This might be the final straw for several of their operations,” said Doke.

Doke’s organization represents 440 tree fruit growers and 20 shippers in the Mid-Columbia region, but he said he fully expects that number to “erode” this year as small-scale operations lease their land or sell out to larger operations.

Lesley Tamura, a fourth-generation farmer and pear grower in Hood River, has been working to help members of the tree fruit organization understand the new law and its impacts. This gives her both personal experience and a bird’s-eye view of how growers are adapting.

The first common trend is that growers, including Tamura, are telling employees that they can’t work over the 55-hour threshold.

“It will get harder as we move toward the 40-hour threshold,” said Tamura.

This approach has tradeoffs. During harvest, Tamura said, growers will need to decide whether they will pay overtime and squeeze their profits or choose to leave some of their fruit unpicked.

Many employees say they are unhappy about losing hours. To remedy this, some growers are talking about sharing workers. One farm, for example, might allow employees to work 55 hours and then pass them on to a neighboring farm so they can get more hours.

The challenge with this strategy, Tamura said, is that it is difficult to plan out picking timelines in advance because of changes in the weather and overlapping schedules.

Tamura said she finds the overtime pay law frustrating partly because it is driving away employees.

“Without our employees, we don’t have a business. Without them, we just have a backyard with a lot of pretty trees,” she said.

Finally, some tree fruit growers are already looking for an exit from the industry, she said.

“Some are just looking for a way out,” Tamura said.

Berries

Anne Krahmer-Steinkamp, who farms about 500 acres of blueberries in the Willamette Valley and along the Columbia River in northwest Oregon, said she has already told employees she cannot afford to pay time-and-a-half wages.

The economics simply don’t work, she said. Once harvest starts, her marketer will have already provided an estimated price for the crop based on global supply and demand.

During harvest, Krahmer-Steinkamp typically hires about 200 seasonal workers and factors the marketer’s price estimate into the pickers’ piece rate pay.

“I’m not sure any blueberry farmer will be able to take (overtime) into account,” Krahmer-Steinkamp said. “It’s already such a calculated number of what you’re paying per pound, versus transportation, versus packaging, versus what you’re getting paid per pound.”

Ultimately, Krahmer-Steinkamp said growers may only make 5 cents per pound of blueberries — and that’s in a good year.

Instead, she said the farm plans to purchase a second Oxbo mechanical harvester, retailing at more than $350,000. Though it is a significant cost upfront, Krahmer-Steinkamp said it will help offset some of the hours it takes workers to pick the fruit by hand.

Jim Hoffmann, of Hopville Farms, was more blunt in his assessment.

“The bottom line, we’ll be out of business in three years,” he said.

Like Krahmer-Steinkamp, Hoffmann increasingly relies on automation to pick his blueberries. Labor accounts for 70% of his production costs, he estimated.

The U.S. industry, meanwhile, is competing against countries such as Mexico and Peru that have year-round growing conditions, and pay workers as little as $10 per day.

“For me, this is just a second career. I fortunately don’t have a lot of debt,” Hoffmann said. “But it’s just impossible for most of these guys. It’s going to be brutal.”

Dairy

Tami Kerr, executive director of the Oregon Dairy Farmers Association, said that because the first phase of the overtime law just went into effect, it is still too early to determine the full impact of the law on dairy farms in her state.

North of the Columbia River, however, is a different story. Washington state is ahead of Oregon on its overtime pay timeline. Dairy employees there have been entitled overtime pay after working 40 hours per workweek since November 2020.

Jay Gordon, policy director for the Washington Dairy Federation, said farmers have adapted by investing in robots and more efficient field equipment.

Some, however, have chosen to leave the industry or state due to a combination of factors including the increasing minimum wage, the overtime pay law and high input costs.

“We’ve seen a higher-than-usual exodus from the business,” said Gordon. “This last year, we had a lot of ‘going out of business’ notices come across our desk as a federation. I don’t want to put all of this on overtime, but overtime is part of it.”

One trend Kerr said she has observed is more investments being made by dairy farmers in automation.

Brandon Hazenberg, who runs a large dairy in St. Paul, plans to further invest in technology. For example, he has invested in automatic greasing and lubing systems and sprayers.

“We’ll continue to explore every avenue to automate,” he said.

After the overtime pay law passed last spring, Bobbi Harrold Frost, a dairy farmer in Creswell, started looking for ways to make efficiencies in the field to save on labor costs.

She invested about $100,000 in a cow activity monitoring system. The system uses collars to track cows’ behavior — such as how much time each cow spends eating, walking and chewing cud. The system delivers data to Frost’s smartphone and allows her to quickly pick up on problems like sickness or mastitis.

Although Frost’s farm is relatively small — she has 10 employees and milks about 450 cows at a time — monitoring cows without technology would normally take a herdsman two to three hours per day. Using the monitoring system saves a significant amount of labor.

Her next step is to consider how to bring in more technology for milking. Although she would like to upgrade her 20-year-old parlor, doing so will be costly.

“Labor-saving automation is our biggest priority moving forward,” she said.

Joe Jenck, a dairyman in the Tillamook area, said the overtime law will create additional administrative work for his farm, which has five full-time workers and about 350 cows.

Jenck said he has always paid his dairy employees on a salaried rather than hourly basis. His average employee works about 55 hours per week and makes around $4,420 per month. Jenck does not have a bookkeeper to track employees’ hours, so paying a consistent salary has been easier than calculating hours.

Because the first phase of Oregon’s overtime law has taken effect, Jenck will now have to buy time card technology and start tracking his workers’ hours.

“This is just another layer of bureaucracy that we as a small farm have to deal with,” he said.