The Ninth Circuit Court of Appeals has determined that the owner of peach and pear orchards in Oregon violated the law by crediting its seasonal workers’ housing costs toward their minimum wage and by paying them the day after their last workday. Bobadilla-German v. Bear Creek Orchards, Inc., Nos. 10-35205, 10-35268 (9th Cir., decided April 12, 2011).
The owner recruited several hundred seasonal farm workers in Arizona for the month-long harvest in 2004-2006 and offered them optional on-site housing and meals. The company charged $5-$7 a day for housing and deducted that amount from workers’ paychecks, crediting it toward their minimum wage. “In many instances, if housing costs were not credited toward the workers’ minimum wage, their wage would have been below the lawful minimum wage.” The workers generally received their final paychecks on the day following their last day of work.
A class of workers sued the company, alleging violations of federal and state minimum wage laws and violation of a state wage-and-hour law. Oregon law allows employers to deduct the “fair market value of lodging” provided by employers for the private benefit of employees. According to the Ninth Circuit, while the on-site housing was “optional,” no other housing was available close enough to the fields for the numbers of seasonal workers required, and housing the workers on site was a benefit to the employer in terms of ensuring that workers would start promptly in the morning and not face transportation issues. Under these circumstances, the court determined that the on-site housing was required by the employer and not a private benefit to the employees since it was “necessary in order for the employer to maintain an adequate work force at the times and locations the employer needs them.”
Because Oregon wage-and-hour laws require that seasonal workers receive compensation on the last day worked, the court also determined that the company violated the law by failing to pay some of the workers until the day after their last workday.