What defines a family farm for agencies who regulate labor? Do labor agencies make provisions for family members in the regulations? Who is considered family in the eyes of regulatory agencies? These questions pose a challenge for farm managers who employ family members. Since there are several agencies who have a hand in regulating labor, the answers to these questions are not always simple or consistent.

The current federal minimum wage for all workers is $5.15 per hour. Employers may pay a youth opportunity wage of not less than $4.25 per hour to any employee under the age of 20 during the first 90 consecutive calendar days of employment.

Small Farms are exempt from the federal minimum wage provisions if they did not hire more than 500 man-days of agricultural labor during any calendar quarter in the preceding calendar year. A man-day is any day in which an employee performs any agricultural labor for one hour or more. If an employer owns more than one farm, the aggregate number of man-days used on all farms is used to determine whether minimum wage must be paid. For example, if you have less than 6 employees on your farm working 6 days a week, you will never go over the 500 man-days threshold.

Allowances may be claimed for non-cash benefits like board, lodging, or other benefits customarily provided as compensation to the employee. For federal purposes the allowance is valued at reasonable cost or farm market value as determined by the Wage and Hour Division of the U.S. Department of Labor on a case by case basis.

The New York State Farm Minimum Wage Rate is $6.00 per hour with certain exemptions effective January 1, 2005. On January 1, 2006 it will increase to $6.75 per hour and again on January 1, 2007 to $7.15. Employers must post a summary of the wage order in a conspicuous place in their establishment. A copy of the general work agreement must also be posted. The poster is available from the New York State Department of Labor: http://www.labor.state.ny.us/

Then click on “New Minimum Wage Info” and then “Minimum Wage.” A sample work agreement is included in this fact sheet.

Exemption: This rate does not apply to members of the employer’s immediate family and minors under 17 years of age employed as hand harvest workers on the same farm as their parents or guardians and who are paid on a piece rate basis at the same rate as employees over 17.

Small Farm Provisions: This standard applies to any employer of agricultural workers whose aggregate cash payroll was $3,000 or more during the previous calendar year. Workers supplied by a farm labor contractor are included and the farmer who uses the services of a contractor is responsible for complying with the law.

Youth Rate: The minimum rate for workers on farms under 18 years of age is lower than for adults, see Table 1: Minimum Wage Requirements for New York State Farms. The state youth rate exists only for workers covered under the state minimum wage standard for farm workers. To pay this lower rate, an employer must obtain a Youth Rate Certificate from the New York State Commissioner of Labor. The one-page application is available from regional NYS Department of Labor offices.

The state youth rate certificate allows the employer to employ any number of young workers. Youth under the age of 16 must provide a farm work permit. These permits can be obtained by the employee from their local school district. The employer is responsible for checking to be certain the employee has their farm work permit.

TABLE 1Minimum Wage Requirements for New York State Farms (Rate per Hour unless Otherwise Indicated)
Farm Minimum Wage¹	January 1, 2005 $6.00
	January 1, 2006 $6.75
	January 1, 2007 $7.15
Youth aged 16 and 17 (certificate needed)
Harvesting
First Harvest Season	$3.60
Second Harvest Season	$3.80
After 2^nd Harvest Season	Farm Minimum Wage
Non-harvesting
First 300 Hours	$3.60
Second 300 Hours	$3.80
More than 600 Hours	Farm Minimum Wage
Youth under 16 (farm work permit required)	$3.20
1. The state general minimum wage for nonagricultural workers is the same.

TABLE 2 Minimum Wage Allowances for New York Sate
Meals²	$1.70
Lodging (dormitory style) and Utilities³
Single occupancy (per week)	$18.95
Multiple occupancy (per employee per week)	$12.65
House or Apartment and Utilities⁴
Individual employee (per day)	$5.00
Employee whose family resides with employee (per employee per day)	$8.00
Payment in kind (milk, eggs, meat, etc.) acceptable to the employee	Cost or farm market value
2. No allowance for meals may be considered part of the minimum wage if a seasonal migrant employee earns less than $254 in a two-week period other than by reason of a voluntary absence. 3. This allowance cannot be used for migrant workers. 4. This allowance cannot be used for migrant workers. When a house or apartment and utilities are provided by the employer (no lodging allowance is permitted if utilities are not provided), a fair and reasonable value of comparable facilities in the area or the rates listed.

Allowances are provided by the state for meals, lodging, services, and facilities furnished by an employer to the employee. The state specified values allowed are listed in Table 2: Minimum Wage Allowances for New York State Farms. These values represent the minimum requirements and are not intended to represent the actual value of the item furnished. Payment-in-kind (milk, meat, and the like) acceptable to the employee may be considered at current farm market value.

Federal and New York Minimum Wage Standards Employers are responsible for being in compliance with both the Federal and New York State Minimum Wage rules.

Social Security Taxes (FICA & Medicare) Children age 17 years of age and younger are not considered employees if they work for their parents but should be employees if they work for anyone else, including a farm corporation, estate, or partnership, unless the only partners are the child’s parents. Therefore, no withholding of social security or medicare tax is required for children under the age of 18 working directly for their parents. Once the child reaches the age of 18, social security and medicare taxes are required to be withheld.

If you employ your spouse or your parent in your farm business, their wages are subject to social security and medicare taxes.

A single dependent child employed on a farm must file an income tax return if he or she had any unearned income and the total of unearned and earned income was over $800 in 2004. If the dependent child had no unearned income, a return must be filed if his or her earned income was over the standard deduction $4,850 in 2004. These values are adjusted each year by the Internal Revenue Service. Unearned income includes interest, dividends, and trust income. The child who earns less than these amounts may claim an exemption from withholding when they complete their Form W-4, Employee’s Withholding Allowance Certificate.

Spouses and parents are both subject to federal income tax withholding unless they file a Form W-4 claiming exemption from withholding.

Children, spouses, and parents of farm owners are all exempt from FUTA when employed by a sole proprietor. Small farms are exempt from FUTA until they grow to where they (1) pay cash remuneration of $20,000 or more to agricultural laborers in any calendar quarter of that year or the preceding calendar year, or (2) pay 10 or more persons for at least one day in each of 20 different weeks during that year or the preceding calendar year.

The spouse or child (under 21) of a sole proprietor is exempt from NYS Unemployment Tax. Small farms are exempt from NY Unemployment Insurance Tax until they meet the federal thresholds described above.

Farmers in New York State must purchase workers’ compensation insurance if their cash wage payments to farm employees totaled $1,200 or more in the previous calendar year. Insurance must be purchased from a private carrier or the State Insurance Fund for 12 months beginning April 1st. The $1,200 annual payroll applies to only four farm classifications: general farms including dairy farms (0006), fruit farms (0007), vegetable or berry farms (0031), and poultry farms (0034).

An employer who is not required to provide workers’ compensation coverage may elect to voluntarily do so. If this election is made, specific provisions apply regarding whether employees can be asked to contribute to the program and with respect to notification of employees if coverage is to be discontinued. Employers who choose not to provide coverage should be sure to check with their insurance company to determine whether their liability policy specifically excludes employee injuries or work related claims.

An employer’s spouse employed on a farm is considered an employee for purposes of determining workers’ compensation coverage. An employer’s child under the age of 18 is considered an employee only if his or her services are provided under an express contract for hire.

An express contract for hire is a legal term used to distinguish a situation in which a person is a hired worker from a situation in which a person does an occasional chore or odd job for pay. The farmer’s 16-year-old son who works as an employee, whether full-time during school vacations or part-time during the school year, is considered an employee, for example; whereas children who help out occasionally in the barn or performs tasks for which they are paid by the job are usually considered casual laborers.

To determine which situation applies to your child, ask yourself the following three questions:

3.Do I have an understanding, or agreement, with this child (even an oral one) that states what tasks will be performed for compensation?

If the answers to all three questions are yes, the services are clearly being performed under an express contract for hire and workers’ compensation laws apply.

Children 18 and over who work on the family farm are automatically considered employees, even if they are students. Their wages are included in determining whether workers’ compensation coverage is necessary.

Employers of youthful workers or employers of minors can incur additional liability if a worker under 18 years of age has a work related injury and the employer is uninsured for workers’ compensation in violation of the law. The worker receives two times the workers’ compensation award and the employer is liable for all medical awards as well as penalties. Failure to have appropriate workers’ compensation coverage when employing young workers is a risk that can financially ruin a business if a major injury occurs.

Employers are required to verify that people they hire can legally work in the United States. Form I-9, Employee Eligiblity Verification, from the U.S. Citizenship and Immigration Services must be filled out in part by the employee and in part by the employer when a new employee is hired. The employer must physically examine and record the documents they use to verify the identity and eligibility to work of each individual they employ. Family members or neighbors are not excluded from this requirement. Both the form and instructions are available on the US Citizenship and Immigration website: http://uscis.gov/graphics/formsfee/forms/i-9.htm

Employers have 20 calendar days from the hiring date to report newly hired or rehired employees who will be employed in New York State. Specific information about each person hired including name, address, social security number must be reported along with the name, address and employer identification number of the employer. A complete and legible copy of the employees Form W-4, with the employer information also completed, can be used. No exemption is given for family employees.

New hires are reported by mailing the information to NYS Tax Department New Hire Notification, P.O. Box 15119, Albany, NY 12212-5119 or faxing 518-869-3318.

What does all this mean to the family farm employer? New York State Department of Labor periodically and randomly conducts inspections of farms to determine if they are in compliance with wage regulations. In many instances, particularly for very small farm businesses, there are some special provisions for family members employed on the farm. However, these exemptions vary by the agency that administers any given aspect of the labor law. These agencies want to work with employers to help them to comply with the regulations. The best place to learn whether a specific rule applies to your situation or not, is to contact the agency responsible for that section of the law and ask.

Thank you to the following individuals who reviewed draft versions of this fact sheet: