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.

About The Author

For decades, manufacturers, distributors and retailers at every link in the food chain have come to Shook, Hardy & Bacon to partner with a legal team that understands the issues they face in today's evolving food production industry. Shook attorneys work with some of the world's largest food, beverage and agribusiness companies to establish preventative measures, conduct internal audits, develop public relations strategies, and advance tort reform initiatives.

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