Human resources or manpower is the most important resource in any industry, with Money and Machine as the other two. Without the former, any industry will have a harder time being fully functional. You must give this resource with utmost care and importance through a plausible benefit program from recruitment to retention, giving emphasis on workplace safety. Among these is the provision of Workers’ Compensation which your employer will pay. Now, let’s move on to discuss agribusiness workers’ compensation.
Workers’ Compensation Benefits for Agribusiness
Workers’ Compensation is a type of insurance policy that protects employees and recompenses them in case of work-related injuries or illnesses through medical care, lost wages, vocational rehabilitation, or disability benefits. This coverage also serves as life insurance compensating the dependents of workers killed on the job. The claims are normally on a no-fault basis. This is as long as the employee is not under the influence of drugs or alcohol.
This insurance has two parts. Part A covers the state insurance requirements. And, you can use this to fund the employees’ medical bills and other related expenses including lost wages. It has no policy limit, and the insurance provider pays all the benefits listed in the agreed policy.
Meanwhile, Part B covers claims that are beyond the amount in Part A. It includes 100% coverage for medical expenses, two-thirds of employees’ lost wages, a lump sum for a death benefit, disability, and disfigurement-related cases regardless of injury or death on the job. However, the employer may be responsible and may reimburse the insurer under the following circumstances:
- Employing workers who are in violation of the law.
- Non-compliance with safety or health regulation.
- Employee discrimination, discharge, or harassment
- Serious and willful misconduct could lead to fatal injuries even loss of lives
The serious and willful conduct could be enumerated further as:
- Intentionally providing an agriculture business worker with a dysfunctional or defective machine or tool to work with. Thereby, causing the injury.
- Forcing the worker to perform his job without the proper safety gear or equipment. Like the protective eyewear for welders and hard hats on a construction site
- Ignoring distress calls or signals in case of accidents at work. For example, workers pinned between objects or machines at work;
- Whitewashing accidents in the workplace; and
- Willfully disregarding required safety procedures to save money or finish the job quickly
The Program Beneficiaries (Workers’ Compensation) for Agribusiness
The worker’s compensation benefits are not absolute. And in some states, are prescribed only based on the size of the business operated and the employment type hired. In general, businesses operating under sole proprietorships and partnerships are not required to purchase
Workers’ Compensation insurance but the rules differ per state.
There are states that do not require employee coverage if they are paid by commission. Some may treat uninsured contractors or subcontractors as the contracting company’s employees. This is if an accident occurs while doing tasks for them. There are also some states which offer this coverage to full-time workers. And, those in specialized jobs, and in large farms. But, still dependent on the number of working hours, the ratio between full-time and part-time workers.
The Agribusiness and Workers Compensation
Farming or agriculture business is often considered to be one of the most dangerous industries to be employed in. Unfortunately, it is also one of the industries which allow employers to give little to no compensation coverage to its workers. For example, the migrant and seasonal farmworkers.
To date, only about 13 states in the country require employers to give this coverage to their agricultural/ farm workers. This includes Arizona, California, Colorado, Connecticut, Hawaii, Idaho, Massachusetts, Minnesota, Montana, New Hampshire, New Jersey, Ohio, and Oregon. The list also includes the territories of the District of Columbia, Puerto Rico, and the US Virgin Islands.
On the other hand, the following 15 states which also have agriculture/farming as one of their main industries are not required to provide workers’ compensation to their migrant or seasonal workers: Alabama, Arkansas, Delaware, Georgia, Indiana, Kansas, Kentucky, Mississippi, Missouri, Nebraska, Nevada, North Dakota, South Carolina, Tennessee, and Texas.
Current Conditions of Agricultural/Farm Workers In the past, most farmworkers are African-Americans working in plantations. At present, the industry has seen the rise of Latinos and other foreign workers. This already reached almost 2.4 million with the majority remaining undocumented.
Farm Workers Working Conditions
The exclusion of agricultural workers from getting minimum wages and overtime pay dates back to the early days of American History. This was when most farmworkers from the South were African-American working in plantation-like conditions. In the present day, we saw an influx of foreign workers particularly Latinos who continue to help this industry provide food security throughout the United States.
Farm work is one of the most hazardous occupations in the country. Workers are continuously exposed to dangerous chemicals like pesticides, and workload often involves backbreaking tasks at longer hours and is done most of the time under extreme weather conditions. However, since the time frame to employ these farmworkers are seasonal in nature, the tenure and compensation often given to them are often inadequate.
Could the Fair Labor Standards Act of (FLSA) 1938 not protect these workers against such under-compensation and regulations? In reality, this act has seen revisions and is considered one of the most important bases for employers in dealing with employees. In the 116th Congress (2019-2020), the FLSA was amended to H.R. 1080, or the Fairness for Farm Workers Act specifically for farm workers.
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More about Farmer Working Conditions
The provisions include requiring employers beginning in 2021 to give overtime pay to agricultural workers for services done in excess of their regular working hours at not less than one and one-half rate of the employee rate. For those who have fewer workers (25 or fewer), this will take effect in 2024. However, this does not apply to employees who are either parents, spouses, children, or relatives of the employers.
Another issue to take into consideration is the employment of foreign workers. Under the H-2A or the Temporary Foreign Agricultural Workers Program, employers have to hire foreign workers on a temporary or seasonal basis in anticipation of a possible labor shortage. There is no limit as to the number of workers they may hire as the number has seen a significant increase over the years from 86,000 in 2009 to almost 258,000 in 2019. However, they can only do so as long as they can prove that they have exhausted every means to hire US workers but are still not enough.
This program provides:
- Higher wages to compensate the workers compared to the local rate for a particular job, which should also be higher than the state or federal wage, within the agreed-upon collective bargaining agreement and should be within the Adverse Effect Wage Rate (AEWR)
- Use of the Interstate Employment Service System and private-market methods or positive-recruitment to ensure that US workers are indeed located and reached out first prior to the hiring of foreign workers
- Use of the “Fifty Percent Rule” which gives job preference to qualified and eligible US workers until the middle of the farming season. Many foreign workers often arrive in the early days of the season when the majority of the labor force is a requirement. Most of the time, however, most farms require fewer farmhands towards the end of the season.
- The “three-fourth minimum work guarantee”. This serves as protection from over-recruitment that would eventually lead to tapered wages and guarantees an income for migrant workers with at least three-fourths of the agreed 40 hours/week, except in Acts of God situations.
- Employers are required to pay for the workers’ subsistence and transportation to return home
- Provide housing facilities to workers that meet all possible humane and legal requirements
- Prohibits employers from charging workers recruitment fees, and
- Provide workers’ compensation insurance to cover occupational injuries even in states that do not require such protection from employers
More about the program in the compensation package
This program is a huge development in the compensation package not just for temporary or seasonal agricultural or farm workers, but also for US workers. For foreign workers, it serves as protection for them while they work in the US. Many of these workers had to pay huge recruitment fees just to reach the country. So even in the most unfavorable working conditions, most have no choice but to grin and bear it. They can only work with one employer for the duration of their work permit otherwise, they are left with no choice but to be sent home as soon as their job order is completed.
US workers who will work alongside the temporary foreign workers too may face discrimination as the latter are often given preference over them. This is primarily because of the more “dependent nature” of these foreign workers. These conditions may put both in a very vulnerable position that may lead to abuse and further discrimination later on.
In Conclusion about Agribusiness Workers’ Compensation
We hope you learned a lot regarding the agriculture business. Since the United States operates under the federal system, it is true that laws may vary from state to state. It is important to see the importance of the role of these workers in the agricultural industry in ensuring a continuous food supply for the country, especially in this time of public health emergency. They should be given adequate compensation and coverage — whether they are US workers or temporary foreign workers.
For your insurance needs, comments, or any inquiries, send us a message or call us here at Team AIS in Denver, CO. We’re here to help.