Foothill Farming
University of California
Foothill Farming

Everything You Want to Know About Labor but Are Afraid to Ask

Do you have questions about hiring farm employees? Are you considering making the jump from farmer to owner-operator? We have compiled a few key questions you might want to ask yourself if you answered “yes” to either of those two questions. 

Have you completed a cash flow analysis?

Cash flow is not profitability, it is the statement of incoming dollars and outgoing dollars at different times of the year, which results in a cash flow statement. Analyzing your cash flow will help determine if you are able to pay your employees throughout the year, seasonally, or if a budget needs to be made to ensure cash is available when needed.

Have you calculated the full cost of employees you want to hire?

The minimum hourly wage has increased but that still doesn't account for the myriad of costs attached to hiring an employee. Fulfilling legal requirements for worker's comp, insurance, and other costs can derail your budget; causing not only financial hardship for the farm but also your employees. It is always a good idea to consult with employment experts to find out what exactly it will cost to hire your prospective employee.

Do you understand the legal requirements for becoming an employer?

First, you will need an employer identification number for tax and legal purposes. Laws and requirements are constantly changing so consulting an expert is recommended.

Are you prepared, or have you identified a person who is responsible, for handling payroll, taxes, workers comp and other related paperwork and payments?

Handling payroll and other employee needs should be the responsibility of a single person in your operation. While employees can report their hours and submit forms, a trained individual needs to be responsible for making clerical decisions and correcting common mistakes to avoid headaches later on. If the owner is not able to perform these duties, someone else must. However, that person does not need to be an expert in all of these areas as long as they have qualified advisers in place to help them with tax, insurance, and regulatory decisions.

Get your labor questions answered by Bryan Little, from the Farm Employers Labor Service, who will be our guest speaker at the Farmer-to-Farmer breakfast on March 14th, 2019 at Happy Apple Kitchen. Sign-up now at https://ucanr.edu/survey/survey.cfm?surveynumber=26870 . Put it on your calendar today!

 

If you use the labor readiness self-assessment tool listed below, part of your results will include a capture graph like this and a detailed interpretation of each labor-related area and how you can improve.

Additional labor related resources:

  • Labor Readiness Self-Assessment Tool - University of Vermont

Answer a list of 21 questions and a personalized report will be generated letting you know what areas to work on. http://www.uvm.edu/aglabor/dashboard/node/add/readiness-assessment

  • FELS –Farm Employers Labor Service - a division of the California Farm Bureau Federation

“FELS strengthens the working relationship between farmers and field workers and helps farmers comply with labor and employment laws” https://www.fels.net/1/30-labor/605-vineyard-worker-fatality-highlights-importance-of-machinery-safety-training.html

  • FELS Personnel & Labor Audit Checklist

Use this checklist to ensure you are up to date with requirements regarding overtime, minimum-wage, posters, etc. https://www.fels.net/1/images/Audit-Checklist-May-2018-with-FELS-letterhead2.pdf

  • Understanding Cash Flow Analysis - Iowa State University

This page has links to cash flow budget sheets, cash flow decision maker tools, etc.  https://www.extension.iastate.edu/agdm/wholefarm/html/c3-14.html

Posted on Friday, February 22, 2019 at 10:43 AM
 
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