Farmworkers tax credit could double

Legislation has been introduced to double the state’s Farm Workforce Retention Credit from $600 to $1,200 next year — with a total price tag to state taxpayers of $50 million a year.

A.3886 was introduced by Assemblywoman Donna Lupardo, D-Binghamton, with several co-sponsors. The credit would increase from $600 in 2020 to $800 in 2021 before increasing to $1,200 in 2022. The legislation also makes the tax credit permanent. Companion legislation, S.3502, has been sponsored by Sen. Michelle Hinchey, D-Kingston.

Farms across New York are contending with a 23.5% in total production costs since 2007 due to increased labor costs. According to 2017 USDA ERS data, farm labor expense in New York was about 13.2% of the value of agricultural receipts, compared to the national average of 9.5%. A recent Farm Credit East report estimates that labor costs will increase by $299 million.

“New York farmers faced a number of challenges in recent years including a rising minimum wage, a tightening labor market, and upcoming changes to overtime pay,” Lupardo wrote in her legislative memorandum. “These costs place New York farmers at a competitive disadvantage. As producers of commodities farms have a limited ability to increases prices in national and international market. In an effort to provide relief for farm employers, this legislation seeks to increase a valuable tax credit for farmers. As markets continue to fluctuate and labor costs continue to rise it is important to provide farm employers with certainty. This legislation provides an added measure of certainty by extending the farm workforce retention credit permanently and increasing its value.”

The Farm Workers Fair Labor Practices Act, passed in 2019, granted year-round and seasonal farm employees many of the same labor rights and benefits as workers in other industries including collective bargaining, housing protections, enhanced worker’s compensation protection and overtime pay of one and a half times an employee’s regular wages after 60 hours of work per week and/or if they choose to work on a designated day of rest.

The overtime hours were set in the legislation with the provision they be revisited by a three-member panel within a year. The panel can only lower the threshold or keep it the same — they cannot by law increase the number of hours required for overtime. The wage board decided in January to keep farmworker overtime rules the same in 2021 as they were in 2020.

Moving forward, the New York Farm Bureau is asking the state to look at economic data for at least the next three years to understand the impacts of the farm labor law on farms and employees while asking the state to remove the automatic overtime requirement if an employee chooses to work on their voluntarily day of rest, even if they have not worked enough hours to meet the overtime threshold.

The New York Farm Bureau said in a statement that it approved of Gov. Andrew Cuomo’s decision to keep the Farm Workforce Retention Credit at its previous $600 level in the proposed 2021-22 state budget.

“As we take a deep dive into the budget, we are pleased that Governor Cuomo has also extended the farm workforce retention tax credit of $600 per employee,” the bureau said. “Its purpose was to ease the burden of climbing minimum wage rates on the fragile farm economy.”


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