Michigan’s new minimum wage law that passed in 2014 has left a lot of workers with more money in their pockets. It boosted the state minimum wage from $7.40 per hour up to the current rate of $8.50. By 2018, it’ll be up to $9.25. But the legislation also wiped away the amendments and rules that went along with the state’s old minimum wage law. Because of that, labor advocates are worried that a segment of Michigan’s farmworkers are now exempt from minimum wage laws.
A migrant family's low wages
The story of how this happened starts on a small asparagus farm in Hart, Michigan. Last summer, a family of six migrant workers – five adults and a child – spent a few months there picking stalks. This isn’t new work for the family.
"And the people who came up, they’ve been working on and off for this employer for many years," says Lucy Benz-Rogers, an attorney with Farmworker Legal Services, who’s assisting the farmworker family. “They drove all together up in a van, put together gas money to get themselves up here, as migrant families from Texas often do.”
When the harvesting season ended, the family sought out Farmworker Legal Services, who reviewed their pay stubs.
The family worked on a piece rate pay scale, a common practice for harvesters. It means the family wasn’t paid hourly, but instead was paid by the amount of asparagus they harvested.
The workers couldn’t talk about their case because it’s still ongoing and confidential. But Benz-Rogers says when she figured out how much money all that work that added up to, it was tiny.
“And in doing that calculation, they earned roughly $3.94 an hour, on average,” she says.
$3.94 an hour -- nearly three dollars less than the federal minimum wage and less than half of the state minimum wage. Benz-Rogers says for years, the state has said these low wages aren’t allowed.
She says Michigan has determined that even if a farmworker has been getting paid by piece rate, that rate still needs to add up to at least minimum wage. She explained this to the family, and they complained about it to Michigan’s Wage and Hour program, a program under the state's Department of Licensing and Regulatory Affairs.
They asked the agency to force the farm to pay them nearly $6,000 in back wages. And Farmworker Legal Services was surprised when it got back a ruling saying the agency didn’t have the “jurisdiction…to pursue minimum wage in this case.”
In plain English, that means the agency said it couldn’t do anything -- that under Michigan’s laws, this sub-$4.00 wage was legal. Benz-Rogers says she interpreted the agency’s conclusion this way:
“It would effectively mean the employer is not subject to any minimum wage law," she says.
Benz-Rogers says Farmworker Legal Services had never seen the state rule this way on an issue that had been seemingly settled for so many years.
Consequences of a new law
So, why, now was the state minimum wage law no longer being enforced for this family? Well, it all stems from a 2014 state law changing the state’s minimum wage.
The new law replaced the state’s original minimum wage law from 1964. In that first law, the state formed something called a “wage deviation board” for hand-harvesters. This board studied the market and created minimum rates that farmers had to pay their workers -- rates that needed to be roughly equal to the state minimum wage.
The board was ultimately dissolved about 20 years ago. But even without the board, the state’s Wage and Hour program continued to rule that farmworkers were protected by state minimum wage laws.
However, Jennifer Fields, the administrator of the state’s Wage and Hour Program, says that all changed when this 2014 minimum wage law was passed.
“The new (minimum wage law) Act 138 does not have any rules promulgated yet, so the Wage and Hour program and LARA are evaluating the issue to ensure we’re being efficient and fair in administrating these laws,” Fields says.
She says the new law kept the wording from the old law -- for the state to form a “wage deviation board.” However, Fields says the new law also eliminated decades of rules and interpretations that went along with this board.
Fields says this means that under the new law, the state needs to create another wage deviation board to decide on rates. And until that happens, farmworkers who get paid by piece rate won’t be guaranteed the state’s minimum wage.
Experts say the new ruling has two major effects. First, workers on smaller farms are exempt from both federal minimum wage and state minimum wage laws. Effectively, advocates say, farmers can pay these small farm workers whatever piece rate wage they want. Meanwhile, workers paid by piece-rate on large farms won’t be guaranteed the state minimum wage of $8.50 but instead the federal minimum wage of $7.25.
Daniel Inquilla, a managing attorney with Farmworker Legal Services, says this could set a dangerous precedent – one that could potentially leave thousands of farmworkers in the state vulnerable.
"So how long is this going to last?" Inquilla says. "[LARA] says they’re in the midst of producing these rules, but their rules are already affecting people."
Michigan Department of Civil Rights Director Augustin Arbulu says he’s troubled by the ruling. He says only six years ago, his department issued a recommendation to LARA to ensure the minimum wage for all farmworkers.
He says the new decision goes directly against that.
"We pay special attention to ensure that the rights of all of the protected class are not violated," Arbulu says. "And when you’re dealing with families who are poor, but especially are people of color, that does give us concern."
Another worry from those who work is farmworkers is the unintentional effect that the interpretation could have on farmers, too. If workers see no minimum wage in Michigan and a new $15 minimum wage in California, advocates say, why would workers come here?
But Craig Anderson with the Michigan Farm Bureau sees it differently. He says the vast majority of farms are paying more than the minimum wage. He also points to the thousands of jobs that farmers now offer as part of the Federal H-2A Visa Program, which pays at least $12.02 per hour.
Because other farms have to compete with these wages, he says, wages are only going up.
"The number of H-2A programs is in fact stimulating an overall increase in wages,” he says.
In terms of the scale of this decision, Anderson estimates that only about 200 to 300 farms across the state both employ workers and are small enough to fall outside both federal and state minimum wage rules.
Jennifer Fields with the Wage and Hour Program says this kind of minimum wage complaint isn’t common. She says this is the first case the agency has seen since the 2014 law went into effect.
However, what’s still unclear is when, or if, these holes in the minimum wage laws will be filled. Fields would only say that her agency is looking into the issue. But she wouldn’t say what actions the agency is planning to take or when it would be taking them.