Should Your Farm Be a Licensed Farm Labor Contractor? Don’t Be So Sure.


Saalfeld Griggs Employment Law & Litigation Practice Groups

Most farms would not consider themselves to be farm labor contractors, and for good reason. You likely do not regularly lease out workers. While you recruit employees, they work for your farm on your land (whether owned or leased), and harvest and process your crops. You are not making money by leasing these workers to other farms. But does that matter?  Maybe not, according to BOLI.

Do You Have Multiple Entities?

Consider most modern farms with multiple crops. Many farms have a separate LLC or company set up for different crops. There are plenty of good reasons to set up separate entities for liability or tax reasons.

In setting up these entities, most farms then choose one that will have payroll for all entities. Most of the time, the subsidiary or sibling entities then reimburse the entity that runs payroll for the labor used.

The problem with this scenario is that BOLI considers the entity with payroll to be “leasing” those workers. As a farm labor leasing company, BOLI’s position is that these entities should be licensed farm labor contractors.

But wait, you say, the “leasing” entity isn’t making any money, and the entities are all owned by the same (or close to the same) people. Isn’t requiring the leasing entity to be a farm labor contractor outside of the purpose of the farm labor contractor statutes? Absolutely. Shouldn’t that count for something with BOLI? It should, but it doesn’t. BOLI has told me that it has no leeway in interpreting the statutes and that as they stand, they have to enforce them this way.

One solution is to look into setting up a payroll for each of the entities. That said, many farms will object because setting up separate payroll is cumbersome and creates a time-tracking nightmare.

Are You Sending Your Workers to Another Farmer’s Field?

Farmers are generally neighborly.  They tend to help other farmers by sending workers over to help or often swap labor.  That’s especially true these days as labor is harder to come by, but farmers need to be careful. BOLI’s Farm Labor Contracting Handbook says that you need to be a farm labor contractor “if you send your seasonal labor crew to a neighbor’s farm and require such workers to perform labor on your neighbor’s farm as a condition of employment with you.”

Again, BOLI has no wiggle-room on these issues. Once you start telling employees to go work in someone else’s field, you have “recruited” them to go work for another farmer and you are required to be a licensed farm labor contractor.

What’s the Big Deal About Being a Farm Labor Contractor?

Call us and no doubt the first thing that we will tell you is that you do not want to become a farm labor contractor.  Doing so will mean that you add a host of liability and regulatory complexity to your farm (as if farms aren’t regulated enough…).  Among those new challenges you would face would be:

  • Providing each employee a statement of worker rights;
  • Providing each employee a written agreement on terms and conditions of employment;
  • Carry your licensed with you at all times;
  • A bond requirement to ensure that employees are paid appropriately;
  • Promptly pay employees;
  • Comply with field sanitation and housing health, safety or habitability requirements;
  • Send BOLI certified copies of payroll; and
  • Payment of travel, food and lodging expenses in certain circumstances.

Penalties for failing to comply with the law include penalties of up to $2,000 per violation.  If you want to know more about all the “fun” that you could be having, take a look at BOLI’s Farm Labor Contractor Handbook click here.


Unfortunately, there are no quick or easy solutions to get around these issues.  While the long-term goal is to create a legislative fix for these issues, for immediate help, please contact David Briggs at or 503-399-1070.