Legal Glossary for On-Farm Labor
Legal terms, forms, and acts often referenced in tax and legal forms pertaining to on-farm labor.
Agricultural association(s): Under the Fair Labor Standards Act, a nonprofit or cooperative association of producers, growers, or ranchers incorporated or qualified under applicable state laws to recruit, solicit, hire, employ, furnish, or transport migrant agricultural workers or seasonal agricultural workers.
Agricultural employer(s): Under the Fair Labor Standards Act, a person who owns or operates a farm, ranch, processing establishment, cannery, gin, packing shed, or nursery, or who produces or conditions seed, and who either recruits, solicits, hires, employs, furnishes, or transports any migrant agricultural worker or seasonal agricultural worker.
Agricultural employment: (1) Any service or activity defined as agricultural employment in the Fair Labor Standards Act and in the Internal Revenue Code of 1954. (2) The handling, planting, drying, packing, packaging, processing, freezing, or grading prior to delivery for storage of any agricultural or horticultural commodity in its unmanufactured state. This includes forestry and Christmas tree production.
Agricultural labor(er)(ers): Under provisions of the Fair Labor Standards Act, any employee engaged in cultivating the soil, growing or harvesting of crops, or raising livestock, bees, fur-bearing animals, or poultry. The definition does not include forestry or Christmas tree operations (including nurseries that produce seedlings for forestry or Christmas tree farms).
Custom hire; custom work: Specific farm operations performed under contract between the producer and the contractor. The contractor furnishes labor, equipment, and materials to perform the agricultural operation. Planting, plowing, and custom harvesting of grain, fiber, and forage; spraying and picking of fruit; shearing of sheep; and the application of fertilizer and chemicals are examples.
Domestic farm labor: Typically, year-round farm labor or labor provided during the growing season by individuals who receive a substantial portion of their income from the production, catching, netting, handling, planting, drying, packing, grading, storing, delivering to storage, transporting to market, processing, or handling of agricultural or aquacultural products.
Factor of production: A resource that can be used in the production of economically useful commodities. Examples include labor, farm equipment, and land.
Fair Labor Standards Act of 1938 (FLSA) (29 U.S.C. §§ 201 et seq.): As amended, the Act establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector, and in federal, state, and local governments. In farm work involving child labor, permissible jobs and hours of work, by age, are as follows: (a) youths 16 years and older may perform any job, whether hazardous or not, for unlimited hours; (b) youths 14 and 15 years old may perform any nonhazardous farm job outside of school hours; (c) youths 12 and 13 years old may work outside of school hours in nonhazardous jobs, either with a parent’s written consent or on the same farm as the parent(s); (d) youths under 12 years old may perform jobs on farms owned or operated by parent(s), or with a parent’s written consent, outside of school hours in nonhazardous jobs on farms not covered by minimum wage requirements. Minors of any age may be employed by their parents at any time in any occupation on a farm owned or operated by their parents. The Act contains many exemptions for agricultural laborers from the overtime pay, minimum wage, and training wage provision.
Family farm(s): (1) A farm for which a family provides most of the labor and management decisions. The land may be owned, partly owned, or rented. Most family farms would have annual sales between $40,000 and $300,000. (2) An agricultural business that (a) produces agricultural commodities for sale in such quantities so as to be recognized as a farm rather than a rural residence; (b) produces enough income (including off-farm employment) to pay family and farm operating expenses, to pay debts, and to maintain the property; (c) is managed by the operator; (d) has a substantial amount of labor provided by the operator and family; and (e) may use seasonal labor during peak periods and a reasonable amount of full-time hired labor. (3) According to the Economic Research Service, farms organized as proprietorships, partnerships, and family corporations. Family farms exclude farms organized as nonfamily corporations or cooperatives, as well as farms with hired managers. Family farms are closely held (legally controlled) by their operator and the operator’s household. (4) Farms using less than 1.5 person-years of hired labor and with no hired manager. (5) Farms with less than 1.5 to 2.0 family workers and the same or fewer number of hired workers; self-managed. (6) Farms where agricultural production is either the primary occupation of the operator (or is an important contributor to family income); that provide at least one-half-time employment for an operator, family member, or a hired laborer; and that are operated by no more than three extended families.
Farm labor contracting activity: The recruiting, soliciting, hiring, employing, furnishing, or transporting of any migrant agricultural worker or seasonal agricultural worker.
Farm labor housing loans and grants: Commonly known as Sections 514 and 516, Rural Housing Service grants are available for housing for migrant, seasonal, and year-round farm laborers. With grants of up to 90 percent of development costs, the USDA assists nonprofit and public groups to develop affordable migrant housing complexes, including essential support facilities such as day cares, laundries, and small medical clinics. In the off-season, migrant facilities can be made available for the homeless. Year-round housing can also be provided through local sponsors for affordable family units. Loan terms are one percent interest for up to 33 years. The farm labor housing program is the only exception to the RHS rural service area. Funds may be used in urban areas for nearby farm labor.
Farm labor(ers): Includes services in connection with cultivating the soil, raising, or harvesting any agricultural or aquacultural commodity.
Farm Link: A program that matches retiring producers who want to keep their land in agriculture with beginning producers who want to buy a farm. Farm Link programs are designed to facilitate farm transfers, usually between producers who are not related to each other. Also Land Link.
FLSA: Fair Labor Standards Act of 1938.
H-2A Program: Allows farmers to bring nonimmigrant foreign workers into the U.S to work seasonal or temporary agricultural jobs. Farmers have to submit a petition to participate in the program, and must be able to demonstrate that they have attempted to fill the jobs with U.S workers without success, and that the employment of alien workers will not have negative impacts on U.S workers. The H-2A program is regulated with respect to wages, housing, transportation, and other requirements. These regulations are enforced by the US Department of Labor. For more information on the H-2A program, click here.
Input(s): An item used in the production of food or other agricultural products such as seed, fertilizer, chemicals (pesticides), animal feed, drugs, machinery, fuel, labor, and land.
I-9: A form documenting a worker’s eligibility to be employed in the U.S. The form asks for verification of employee eligibility via specific forms of identification, such as a social security card, valid driver’s license, or passport. Make copies of two forms of identification for each worker, have them complete the form, and then keep the ID records and the I-9 on file. You do not need to file the I-9 with the government unless employee eligibility is ever called into question.
Joint (farming) operation; joint venture: A farming operation in which two or more producers work together sharing, equally or unequally, land, labor, equipment, expenses, and income.
Microenterprise: Under the rural electronic commerce extension program, a commercial enterprise that has five or fewer employees, one or more of whom own the enterprise.
Migrant and Seasonal Agricultural Worker Protection Act (MSPA) (P.L. 97-470) (29 U.S.C. §§ 1801, et seq.): Signed into law January 14, 1983, and amended in 1986 and 1995. An Act designed to provide migrant agricultural workers and seasonal agricultural workers with protections concerning pay, working conditions, and work-related conditions; to require farm labor contractors to register with the U.S. Department of Labor; and to assure necessary protections for farmworkers, agricultural associations, and agricultural employers.
Migrant farmworker(s): A person who travels across state or county boundaries to do agricultural work of a seasonal or other temporary nature, and who is required to be absent overnight from his or her permanent place of residence. Exceptions are immediate family members of an agricultural employer or a farm labor contractor and temporary foreign workers.
MSPA: Migrant and Seasonal Agricultural Worker Protection Act.
Net income: A measurement of the net return to unpaid labor, management, and equity capital. The primary difference between cash and accrual net income is that accrual income includes adjustments for changes in inventory and changes in accrual items such as prepaid expenses, accounts payable, and accounts receivable. Accrual net income more accurately reflects the profitability of a business over an accounting period.
Non-farm income: Includes all income from non-farm sources received by farm operator households. This excludes money earned from working for other producers.
Off-farm; off-farm income: Includes wages and salaries from working for other producers, plus non-farm income for all owner/farm operator families (whether or not they live on a farm).
Primary agriculture: Under the Fair Labor Standards Act, farming and all its branches such as cultivation and tillage of the soil; dairying; the production, cultivation, growing, and harvesting of any agricultural commodity or horticultural commodity; and the raising of livestock, bees, fur-bearing animals, or poultry. See Secondary agriculture.
Rural development: Under 7 U.S.C. § 2666, the planning, financing, and development of facilities and services in rural areas that contribute to making those areas desirable places in which to live and make private and business investments; the planning, development, and expansion of business and industry in rural areas to provide increased employment and income; the planning, development, conservation, and use of land, water, and other natural resources of rural areas to maintain or improve the quality of the environment for people and business in rural areas; and the building or improvement of institutional, organizational, and leadership capacities of rural citizens and leaders to define and resolve their own community problems.
Rural Business Opportunity grants (RBOG): Rural Business-Cooperative Service grants, not to exceed $1.5 million annually, provided to public bodies and private nonprofit community development corporations to identify local rural business opportunities; provide technical assistance to rural entrepreneurs; establish business support centers; conduct economic development and planning, and leadership development; and establish training, technology, and trade centers that will utilize interactive technology. Authority for the grants was extended through FY2007 in the Farm Security and Rural Investment Act of 2002 (Sec. 6003).
S & D: Special and differential treatment.
Seasonal agricultural worker(s): A person employed in agricultural work of a seasonal or other temporary nature who is not required to be absent overnight from his or her permanent place of residence. Such a worker is covered by the Migrant and Seasonal Agricultural Worker Protection Act when the worker is performing field work or when the worker is employed in a packing or processing operation and is transported by day haul. Exceptions are immediate family members of an agricultural employer or a farm labor contractor and temporary H-2A foreign workers.
Secondary agriculture: Under the Fair Labor Standards Act, any activities or practices performed by a farmer (including employees of a farmer) or on a farm as an incident to or in conjunction with such farming operations. These activities include preparing commodities for market and delivering commodities to storage, to market, or to a carrier for transporting to market.
Small farms policy (USDA): It is the policy of the USDA to (a) develop and support research, development, regulatory, and outreach programs and initiatives that focus on the special needs of small farms, especially those programs that help small farms develop alternative enterprises, value-added products, and collaborative marketing efforts, including cooperatives, that enhance stewardship of biological, natural, human, and community resources; (b) make special efforts to meet the credit needs of small, under-served, minority, women, and beginning farmers and ranchers; (c) consider the special needs of and specific effects on small farms when developing and implementing marketing, incentive, and regulatory programs and processes; (d) develop and foster marketing, development, credit, and outreach programs that improve the competitiveness of small farms and give priority to farmer-owned and farm-based businesses, especially those that foster local and regional competition in production, processing, and distribution of food, fiber, and wood products that connect small farms and consumers at the local and regional levels; (e) foster collaboration among public and private sector agencies, programs, and institutions, including farm and community-based organizations, to meet the financial, educational, and technological needs of small farms, including developing small farms networks, joint enterprises, and mentoring systems; (f) encourage and emphasize educational, outreach, marketing regulatory, credit, and other programs that will help ensure new generations of small farmers can gain access to the resources they need; and (g) encourage all USDA agencies, the land grant institutions, and collaborating public and private sector institutions to emphasize sustainable agriculture, sustainable forestry, and agroforestry as profitable, environmentally sound, and socially desirable strategies for small farms.
Variable costs: (1) The portion of total cash production costs used for inputs needed to produce a specific yield of a specific crop. Variable costs typically include fertilizers, seed, pesticides, hired labor, fuel, repairs, and animal feed and drugs. (2) Costs that vary in the aggregate with a change in output of a farm. In the short run, there are both fixed and variable costs; in the long run, all costs are variable.
W-2: The form documenting the total wages and tax withholdings that you paid for each employee. It is the form farmers will complete at the end of the year, providing a copy to the employee and a copy to the IRS and the Social Security Administration.
W-4: A form workers use to claim their total withholdings, and will be used by the farmer to inform tax, Social Security, and Medicare withholdings from each employee paycheck. The form should be completed by each employee at the start of employment, a copy should be filed on the farm, and a copy should be filed with the IRS. Form NC-4 serves the same purpose but is for the state of North Carolina, and should be filed on each employee in addition to their Federal form W-4.
Worker protection standards (WPD): Environmental Protection Agency standards for agricultural employers requiring them to maintain daily records of all chemicals applied to farm fields, including brand name and active ingredients and the method and rate of application. The employer must provide training and protective clothing for workers if they apply farm chemicals. The worker must also know what to do in an emergency, and the name, telephone number, and address of the nearest emergency medical facility. Workers must be restricted from entering treated farm fields for a prescribed period of time, and treated fields must be posted.
WPD: Worker protection standards.
Young, beginning, and small (YBS): A Farm Credit System initiative to encourage newer and younger producers to enter farming and ranching and to provide increased credit opportunities for small farmers. The goals of this initiative are to be balanced with the requirement to minimize undue credit risks. See Beginning; beginning farmer(s) and rancher(s) (qualified), Small (farmer and rancher), and Young; young farmer(s).
Young; young farmer(s): Under the Farm Credit System’s YBS initiative, a young, beginning, and small farmer, rancher, and producer or harvester of aquatic products who is under the age of 35.
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