What Jobs Are Exempt From Minimum Wage Criteria?
Updated: Jul 17, 2020
By Kim Pardoe Manuelides
Editor’s Note: This post originally appeared in the August 26, 2014 Issue of The Delmarva Farmer. Today we attempt a guest post from a local attorney, Kim Manuelides, covering an important issue to diversified farm operations, paying minimum wage and overtime. We would like to thank Kim for allowing us to repost this column.
This post should not be relied upon as legal advice.
Those who are employed in agriculture are generally thought to be exempt from Maryland’s Wage Payment and Collection Law and such workers therefore are not required to be paid the state’s minimum wage or overtime.
Further, many activities that are closely connected to farming operations, such as canning, freezing, packing or first processing of perishable or seasonal fresh fruits, vegetables, horticultural commodities, poultry or seafood, are also exempt.
As more farm families seek to diversify their operations and engage in other income producing activities, it is important to understand what activities are and what activities are not exempt by the act.
A recent decision by Maryland’s highest court highlights the risk of making the wrong legal call with respect to a covered employee.
In a case known as Muriel Peters v. Early Healthcare Giver, Inc., a home healthcare worker sued her former employer for violation of the state Wage Payment and Collection Law, maintaining that she should have been paid overtime during her employment.
The employer claimed that it thought the worker was exempt from the state overtime requirements because of the nature of the healthcare worker’s employment fell within a federal statutory exemption.
The trial court and later the appellate courts disagreed. Not only was the federal exemption insufficient to overcome the Maryland overtime law, but the employer’s belief that the exemption applied was not enough to avoid the penalty provisions of the act.
As a result, the employer may not have to pay the former employee, not simply the overtime that it failed to pay her during her employment, but up to three times the amount that it failed to pay her.
Virginia and Delaware both exempt farm and agricultural laborers generally from their minimum wage and overtime statutes.
Maryland’s law, however, is more restrictive.
A close look at the Maryland agriculture exemption shows that it applies to three general categories.
The first is for small farms, those who used no more than 500 agricultural-worker days during each quarter of the preceding calendar year.
An agricultural worker day is any day in which a worker is employed in agriculture for at least one hour.
The second exemption is for those who are engaged in the range production of livestock.
The third is for those who are employed as hand-harvest laborers paid on a piece-rate basis in a region that has customarily paid on that basis.
The third exemption is further limited to those who either commute daily to the farm and were employed in agriculture less than 13 weeks or to those who are under the age of 17 and are working on their family’s farm.
Children and other immediate family members of the employer are also exempt from the Maryland Wage Payment and Collection Law, which effectively excludes most family farms from the operation of the statute, unless they employ non-family members.
In order to qualify as an immediate family member, the person must be the employer’s parent, spouse, child, brother, sister, grandchild, or grandparent and must reside with the employer.
“Immediate family” does not include anyone living outside the employer’s household, except the employer’s parent, spouse, or child.
Those family farms hiring non-family members must either fall within one of the other three exempt categories or pay the state’s minimum wage and pay overtime.
As family farms become increasingly diversified in their operations it will be critical to keep these distinctions in mind.
Simply because Delaware and Virginia’s agricultural exemption is more broad than Maryland’s does not mean that diversifying operations in those states will retain full statutory exemption for their non-agriculture operations.
Under these statutes employers are required to maintain records of their employees hours and the compensation that was paid for those hours.
Failing to maintain proper records and failure to pay the proper wages may lead to employer facing considerable liability to both the employee and the state.
Be certain of your operation’s status before you receive notice that a claim has been brought against you, and if you decide to modify your business operation, revisit your exempt/non-exempt status with an attorney.
(Editor’s note: Kim (Pardoe) Manuelides is a partner in the law firm of Saul Ewing, LLP, who focuses her practice on solving legal issues and concerns of the agricultural community.)