Emily Stone, Staff Attorney
Community Supported Agriculture (CSA) can be an effective way to connect producers with consumers. For both parties involved in a CSA operation there are multiple benefits. For the consumer, one benefit is the opportunity to connect with a local food supplier by financially supporting their operation or for some, to physically help around the farm. However, for producers who host CSA consumers on their property to help with farm tasks, questions about the legal duties owned to them arise. This article is the fourth in a series about CSA, and it will discuss labor concerns. To read the other articles in this series, click here.
Background on CSA
CSA is a farm structure where consumers sponsor a producer’s upcoming growing season by purchasing a membership in the farm, and in return, receive a share of the season’s harvest. Under this model, the consumer shares the burden of risk with the producer. Once farm products are harvested, members will receive a box of farm products on a periodic basis, either by traveling to the farm to pick up, meeting the CSA at a local distribution site, or delivery from the CSA to the consumer’s home. The contents of the CSA box will vary depending on factors like the time of year or the type of membership purchased by the consumer. Additionally, some CSAs offer different payment options to members. For example, a CSA might offer a work-share membership that allows a member to both pay for their share monetarily and through working a set number of hours on the farm.
Labor Laws Generally
Though CSA is a unique business model, it will be required to follow the same labor laws as a traditional farm. This means that if a CSA has employees, the CSA will still be required to obey all federal, state, and local labor laws that apply to their operation. The following paragraphs will look at a few of the federal labor laws a CSA operator should be aware of.
Fair Labor Standards Act
The Fair Labor Standards Act (FLSA) is the comprehensive federal statute that governs labor. Specifically, the FLSA sets minimum wages, requires overtime wages, restricts child labor, and mandates some record-keeping by employers. Though FLSA covers all employers engaged in interstate commerce, it includes certain exemptions for agricultural employers. Specifically, FLSA exempts agricultural employers from minimum wage and overtime requirements if that employer did not use more than “500 man-days” of agricultural labor during any calendar quarter of the preceding calendar year. A man-day is defined as any day where an employee performs at least one hour of agricultural labor. Additionally, under the FLSA, agricultural employers can hire children for agricultural labor below the general legal minimum age applicable to other industries. Children fourteen and older may be hired to work outside of school hours, children twelve to thirteen may be hired with a parent’s permission, and children under twelve may be hired on their parent’s farm or with a parent’s permission on a farm that falls below the 500-man-day requirement. The standards set in FLSA are minimum standards employers must follow. However, individual states might provide greater protection for agricultural workers that, under the FLSA, employers are required to comply with. For example, the federal minimum wage is $7.25 per hour and excludes an exception for agricultural workers under the 500-man-day threshold; however, Colorado’s basic minimum wage rate is $14.42 per hour and includes all agricultural employees, without a 500 man-day exception. This means that even if a farming operation in Colorado falls under the 500 man-day FLSA exception, they will still be required to pay their employees the state minimum wage rate of $14.42.
It is important that a CSA operator understands the requirements of the FLSA and the requirements of the specific state and locality where the CSA is located. Though the 500 man-day exception might preclude a small CSA operation from complying with FLSA minimum wage and overtime requirements, that state or locality could have stricter minimum wage requirements. Another concern for CSAs revolves around whether their laborers are categorized as employees. This article will discuss this topic in further detail, but it is important to note that a farm laborer might be considered an employee under the FLSA and be subject to FLSA, state, or local labor law protections even if the CSA operator does not consider them an employee.
Migrant and Seasonal Agricultural Worker Protection Act
Another important agricultural labor statute that CSA operators should be aware of is the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). MSPA covers workers engaged in seasonal or temporary agricultural employment and establishes wage and working condition requirements for those workers. MSPA requires the registration of farm labor contractors (FLC). FLC are defined under the statute as any person other than the agricultural employers, their employees, or agricultural associations that recruit, solicit, hire, employ, furnish, or transport any migrant or seasonal agricultural worker for money or other valuable considerations. MSPA requires employers to disclose the terms of employment, obtain certain licenses from the United States Department of Labor (DOL), and comply with federal housing laws. Additionally, there are requirements about information an employer or labor contractor is mandated to supply to workers when they are recruited. The MSPA will exempt farm operators if they qualify for the 500-man day exemption under the FLSA.
Since CSAs are typically smaller and created to serve their local food system, most CSA operations will not have a harvest quantity that requires contractual, migrant workers to be brought in. But because of the diverse assortment of fruits and vegetables CSAs typically grow, a CSA operation might require a large number of workers to be brought in to assist with harvest. These workers would fall under the category of “seasonal workers,” and would be protected by the MSPA. However, because the 500-man day exemption applies to the MSPA, if a CSA operation remains under that threshold, they would be exempt from the MSPA. For example, Farmer Fran owns a CSA operation that grows many acres of Strawberries. Because Fran’s operation has so many Strawberries that need to be picked at the same time, Fran must bring in part-time employees during the harvest process. The part-time Strawberries-pickers would be considered seasonal employees under MSPA; however, Fran’s operation remains under the 500 man-day threshold and is exempt from the MSPA.
Occupational Safety and Health Act
The Occupational Safety and Health Act (OSHA) assures safe and healthy working conditions through setting and enforcing workplace standards, and providing training, outreach, education, and assistance. Under OSHA, an employer must provide employment and a workplace free from recognized hazards that could cause death or serious injury. This means that a farmer has a legal responsibility to ensure safe and healthy working conditions for employees. Traditionally for agriculture, OSHA covers the areas of temporary labor camps, tractor roll-over protection, guarding of farm field equipment, storage of anhydrous ammonia, field sanitation, hazard communication, cadmium usage, logging operations, and grain handling facilities. There are two exemptions that remove agriculture employers from coverage under OSHA. First, immediate family members of the farm employer are not considered employees and not covered. Second, language in Department of Labor appropriations bills have repeatedly excluded agricultural workers in operations with ten or fewer employees, excluding family members, within the last twelve months unless a temporary labor camp was maintained during the same period. Because of the smaller, localized nature of CSAs, it is likely that most CSA operations will fall under the second exception and the requirements of OSHA will not apply. However, as this article will later discuss, a CSA operation will need to take notice of who might be considered an employee. For example, if a CSA operation has fewer than 10 full-time employees, but has 20 members enrolled in a work-share program, the work-share members might qualify as employees and trigger OSHA requirements for the CSA. As mentioned earlier, this article will discuss the categorization of employees later.
There are federal statutes other than these three that apply to agricultural labor, but the exceptions in the three discussed make them important for agriculture employers to take note of. Additionally, there are state and local laws that a CSA operator may need to comply with. To learn more about agricultural labor, click here to visit NALC’s Labor Reading Room.
Workers’ Compensation
Another labor consideration that a CSA producer should be aware of is workers’ compensation. Workers’ compensation is insurance that provides cash benefits and/or medical care for workers who are injured or become ill as a direct result of their job. A workers’ compensation program might also provide benefits to dependents if a worker dies due to a work-related injury or illness. There are workers’ compensation programs at the state and federal levels. The DOL handles federal workers’ compensation through the Office of Workers’ Compensation Programs. State level programs will handle claims for employees of private organizations and state/local governments. However, the requirements for workers’ compensation vary from state to state with some states excluding certain employees. For example, only 14 states require employers to carry workers’ compensation for all agricultural workers without exception, while 21 have limited coverage for agricultural workers and 15 do not require employers to carry any workers’ compensation for agricultural workers. It is important for producers operating a CSA to know the workers’ compensation requirements in their state. To learn more about workers’ compensation in agriculture, click here to read NALC article “Workers’ Compensation for Agricultural Workers.”
Laborer Status
An important labor consideration for CSA is the relationship between a CSA operator and the people who come into the operation to provide labor. The status of a person providing labor on a CSA operation determines whether they could be eligible for workers’ compensation, or if their participation in farm tasks triggers compliance with certain federal labor law requirements. The status of workers is especially an important factor when a CSA has different categories of people working on the operation. Categories of workers on the CSA could include the farmer’s family members, volunteers, interns, work-share members, or employees. The determination of the producer/laborer relationship is also important because it determines what obligation is owed to the laborer.
Volunteers
A factor that is especially important in the determination of the producer/laborer relationship is whether the CSA is a nonprofit or for-profit organization. A nonprofit organization is a legal entity that serves the public good instead of generating profit for its owners or shareholders. In a nonprofit, income generated by the organization is reinvested back into the organization rather than distributed to the shareholders. Most notably, a non-profit is eligible for tax-exempt status from the federal government. Depending on the state where it is located, there might be different requirements or fees associated with forming a nonprofit. Click here to read the National Council of Nonprofits guide on forming a nonprofit.
The distinction between a nonprofit and a for-profit organization is important for CSAs in a labor context because a for-profit organization is not allowed to have volunteers. Therefore, the legality of a CSA having volunteers will depend on its status as either a nonprofit or a for-profit organization. If a for-profit organization has “volunteers” the volunteers will be considered employees. This means that all applicable federal and state employment laws must be followed for these workers, such as minimum wage or workers’ compensation. If a for-profit CSA chooses to operate with volunteers, it is taking on a level of risk if it fails to comply with applicable employment laws.
If a for-profit CSA chooses to use volunteers in its operation, there could be fines or other legal repercussions for violating both federal and state law. Employers who violate the federal minimum wage requirement could be subject to a civil money penalty of up to $1,000 for each such violation. Further, if a for-profit business is found to have volunteers, every instance where it did not comply with the FLSA standards for employees would be a violation of the FLSA. Though the CSA might still be under the 500-man day threshold, and therefore not required to pay minimum wage or overtime, there is still a violation because a for-profit business cannot benefit financially from a laborers work without providing compensation.
For many CSAs, volunteers are the lifeblood of their operation. This is especially true if the CSA is nonprofit. Many CSAs are nonprofits that operate with altruistic goals like encouraging sustainable agricultural practices, promoting local food systems, or growing for food insecure members of their community. The biggest lesson for a nonprofit operating with volunteers is that a nonprofit may not use unpaid volunteers to compete at an unfair advantage with other farms. Nonprofit farm volunteers may not work full time and may not displace regular employed workers. Volunteers must offer work without pressure or coercion, and do not expect compensation. Volunteers do not offer the nonprofit an unfair advantage in the marketplace, and their work is nonessential to the organization’s operation. To learn more about non-profits and the FLSA, click here to read DOL factsheet “Non-Profit Organizations and the Fair Labor Standards Act (FLSA).”
Interns
Since a for-profit business cannot legally have volunteers, some try to have unpaid labor referred to as “interns.” However, it is a misconception that employers do not have to compensate anyone they call an “intern.” The Department of Labor (DOL) has published guides outlining the “primary beneficiary test” used by courts to determine whether an intern is an employee under the FLSA. This test primarily looks at the economic reality of the intern/employer relationship through evaluating these seven factors: the extent to which the intern and employer understand that there is no expectation of compensation; the extent to which the internship provides training that would be similar to that which would be given in an educational environment; the extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit; the extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar, the extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning, the extent to which the intern’s work complements, rather than displaces the work of paid employees; and the extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at its conclusion. Because of the academic requirements of this test, it is unlikely that a court would recognize the categorization of a CSA member volunteering their time on the farm as an intern. Therefore, a for-profit CSA should be cautious of using this to work around the volunteer prohibition.
Work-share Members
A work-share member is a member of a CSA operation who works on the farm for a set amount of time in exchange for membership in the operation. While this could be structured differently depending on the CSA – most operations allow the work to count as payment for part of the membership and pay monetarily for the other part. A work-share member is distinguished from a volunteer and an intern because a work-share member is receiving compensation for their work. Because of this, a work-share member will likely be considered an employee under the FLSA. However, their work is in compliance with the FLSA because they are being compensated through the share of farm products they receive. It is important for a CSA operator to understand that the presence of a work-share member might trigger compliance with other federal, state, or local labor laws. For example, a CSA with only three full-time employees, but 20 work-share members would reach over the 10-employee threshold of OHSA and trigger compliance with OHSA requirements.
The status of a person providing labor to a CSA operation is also important because it has liability implications. For example, if part of the work-share member’s task is to help deliver boxes to other members, and they get into an accident on the delivery route, the producer might be legally responsible for any damage the member caused. This is the legal principle called vicarious liability, and it is discussed in depth in a previous article in this series.
Conclusion
CSA is a great opportunity for producers and consumers to connect. Consumers can purchase a membership to financially sponsor the producer’s upcoming growing season and might have opportunities to participate in the farm work either through work requirements, volunteer hours, or a work-share membership. If these opportunities are provided through the CSA, the producer will need to make careful considerations about the legal implications of inviting members to participate.