Burlington, WA – Sakuma Bros. Farms, like many large-scale farms, make most of their profit by minimizing the cost of labor. In order to do so, the industry advances two particular myths around piece-rates.
- That piece-rates are an incentive for farm workers to make more money
- That migrant farm workers who receive poor wages and treatment are free to change jobs at will.
The reality is that most piece-rates are determined heavily in the favor of the employer depending upon the quantity or quality that the employer desires for a particular harvest. The reality is that piece-rates in the industry of agriculture lead to an increased dependency upon child labor due to the incentive to maximize production that is often paid to the head of the family. The reality is that farm workers stress their bodies in order to meet onerous production standards. The reality is that migrant farm workers often enter debt agreements with formal and informal labor contractors to cover the cost of their travel over long distances to work for a specific grower, making them beholden to that grower and contractor until their debt is paid off.
It is in these difficult working conditions that wage theft is facilitated, and it becomes clear that without piece-rates it would be difficult to steal wages in the harvest labor market.
Interfaith Worker Justice defines wage theft as “the illegal underpayment or non-payment of workers’ wages.”
Seattle’s municipal code holds that a person is guilty of theft if:
- He or she steals the property of another; or
- By deception or by other means to avoid payment for services, he or she intentionally obtains services which he or she knows to be available only for compensation; or
- Having control over the disposition of services of others to which he or she is not entitled, he or she knowingly diverts those services to his or her own benefit or to the benefit of another not entitled thereto; or
- He or she knowingly secures the performance of services by agreeing to provide compensation and, after the services are rendered, fails to make full and complete payment, with intent to avoid payment for services.
Just two hours north of Seattle in Burlington, Washington it was only after the farm workers self-organized into an independent union where the negotiation committee compared multiple farm worker’s pay-stubs that they were able to see that other farm workers were being systematically shorted wages on their paycheck. It is important to note that many farm workers did not speak Spanish or English, even less so could they read.
The removal of white teenagers from “checker” positions after their first 7 day strike in July 2013 was a first step towards the resolution of an emerging wage and hour dispute. In doing so, the Sakuma executives made it appear that any discrepancies in pay were due to the individual human error of these teenagers and not the corporation.
Familias Unidas por la Justicia insisted that it was not just human error, their list of demands stated that they wanted the new biometric scales replaced with the traditional scale and punch card system of documentation, because they believed that they were being systematically shorted on the pounds of berries they produced and were not provided a physical piece of evidence that they could use to settle their accounts because their production record was in electronic format.
On July 31, 2013 after a second strike and a series of negotiations with retired federal mediator Richard Ahern, Familias Unidas por la Justicia was able to negotiate for over $5,000 in back pay to about 30 minors who had worked the strawberry season and had been shorted pay. Sakuma executives insisted that the wage theft had resulted because of a “computer glitch”.
Because the wage and hour dispute for the larger class of workers was not settled, and negotiations were terminated as soon as the farm received H-2A workers from Mexico limiting the impact of farm worker strikes. Two members of Familias Unidas por la Justicia filed a lawsuit on October 24, 2013. The farm workers accused Sakuma Bros. Farms, Inc of engaging in a systematic scheme of wage and hour violations. Included in the lawsuit were allegations that Sakuma Bros. Farms failed to provide rest breaks, failed to keep accurate records of the actual hours worked, failed to provide pay statements with accurate statements of the actual hours worked, and failed to comply with agreed-upon working arrangements.
On June 11, 2014 the attorneys for both parties reached an $850,000 settlement on the wage and hour lawsuit. The settlement, which has to be approved by a federal judge, included the following stipulations for Sakuma Bros Farms.
- Accurately track all hours worked by berry pickers
- Accurately round the amount of hours worked
- Provide clear pay statements that delineate piece rates and amounts of berries picked
- Ensure that workers are given 30 minute breaks where they can leave the fields
- Upon request from any piece-rate berry picker, provide the worker with documentation of his or her clock-in and clock-out time and quantity of berries picked
- Guarantee that it will not retaliate against any worker participating in the lawsuit.
The original demand was to raise their piece-rate from 30 cents to 70 cents in order for the workers to collectively bargain for a more reasonable piece-rate. This demand was not met, but a compromise was established on July 25, 2013. On this day, Ryan Sakuma provided the workers with a new company policy memorandum.
Prior to this policy change, Familias Unidas por la Justicia had demonstrated that the piece-rates determined solely by the harvest manager resulted in a production speed up where workers produced less than minimum wage in an 8 hour work day. Farm workers also held that the process was not transparent.
The new company policy for determining blueberry piece-rates required the following:
- Each time the workers entered a new field a new piece-rate would be determined by a test pick.
- A minimum of 3 berry pickers on the crew would also participate in the test pick with the harvest supervisor.
- One picker would be a fast picker
- One Picker would be an average picker
- One picker would be a slow picker (picking at the speed equivalent to minimum wage)
- Based on the test pick the supervisor would recommend a piece-rate to the processing plant and sales manager and commercial manager.
- A piece-rate, based on the test pick, processing costs, and market value will be set and given to the harvest manager by Ryan Sakuma
- The piece-rate will be announced to all workers by the supervisor by the latest the night before picking is to begin.
Familias Unidas por la Justicia made a good faith effort to try the new, more transparent process for establishing piece-rates in the blueberry harvest because they had negotiated for their wages to be higher than minimum wage at $12.00 per hour. Just over a week later, Sakuma executives used local clergy as false witnesses that the labor dispute had been completely resolved and on August 4, 2013 80 guest workers arrived at Sakuma Brothers Farms. A week later, on August 14, 2013 Ryan Sakuma revoked the new company policy on setting piece-rates and told the farm workers they could accept his piece-rate or leave on the same day that John Sakuma signed a written agreement that there would be no reprisals or retaliations against the farm workers who went on strike.
A Case Study on the Economy of Piece-Rates
Market Prices v. Piece-Rates
- The minimum wage in WA was $9.19 in 2013, or $72.53/day for 8 hours, including an unpaid 30-minute lunch and a paid 10-minute break for every 4 hours worked.
Piece Rates: A skilled (fast) labor camp 2 picker was only able to make 11 flats in 8 hours at a piece rate of $3.75 = $41.25/day without taking any breaks during the 2013 blueberry harvest at Sakuma Bros Farms. On this day, the fastest farm worker produced the equivalent of $5.16 per hour.
Market Price: for the same blueberry flat was $9.98 (Seattle Grocer).
11 flats at $9.98 = $109.78
The berry industry made a net profit of $68.53 from the sale of his 11 flats. Or the equivalent of $13.72 per hour. The farm, sales and the market made $8.56 per hour in profit from this worker producing berries. Overall, this worker was legally paid $4.03 per hour less than the equivalent of minimum wage.
Had the worker been paid the minimum wage the net profit would have been $37.25 for the 11 flats. That’s a 50% profit increase by paying piece rates instead of by the hour.
Lower Piece-Rates = Production Speed up
The Profitability of Piece Rates + Wage Theft
REALITY CHECK: A skilled picker earned $41.25/day and produced 11 flats.
- Sakuma Bros Farms kept an additional $32.27 from the flats by not paying the picker by the hour.
- Because the pickers did not take two legally mandated 10 minute breaks and (10 minute) prep time is not paid for they work an average of 30 minutes a day which is $9.19 X .5 = $4.60 in stolen wages.
On top of the $32.27 Sakuma (legally) under-payed the picker by imposing piece rates, the firm also (illegally) stole $4.60 from this worker for a total of = $36.87 per day.
There were 350 pickers, some of whom produced far below this skilled picker’s quota. Sakuma Bros Farm has the structural capacity to underpay workers by an average of $36.87 X 350 = $12,904.50 per day
The 2014 Sakuma H-2A Application and Piece-Rates
On May 21, 2014 in San Francisco, CA an Administrative Law Judge of the U.S. Department of Labor ruled to deny the Sakuma Brothers Farms and Washington Farm Labor Association’s application for H-2A workers on May 12, 2014.
The ruling found that the Sakuma Brothers Farms and Washington Farm Labor Association’s application was deficient in regards to three violations to Washington State and Federal Regulations. The first deficiency was that Sakuma Brothers Farm had eliminated family housing which violated Washington State housing discrimination laws; the second was that it had eliminated hiring youth for the harvest season in violation of Washington State laws against discrimination at the workplace; and the third ruling was that the productivity standards (piece rate wages) were unfair and onerous.
The farm had set piece rates at,
On May 20, 2014 after an appeal by Washington Farm Labor Association on behalf of Sakuma Brothers Farms, a Federal Administrative Judge overturned this ruling, allowing the H-2A application to be processed so long as the ordered remediations were made.
Exploitative Rates of Pay:
In the original language of the Sakuma Brothers Farms H-2A application, the farm had a clause that stated the following:
Workers paid on an hourly basis who fail to perform their duties in a timely and proficient manner will be coached/instructed regarding how to pick faster and more efficiently, and will be provided additional training and up to three warnings to work more efficiently. Upon issuance of the third (3rd) warning the worker may be terminated, or may be offered fewer hours to work, but not below the three quarter (3/4) guarantee specified herein. The Employer will provide a 2-day training session “break-in-period” to reach the production standards cited herein. AR at P50.
After the farm was given a Notice of Deficiency (NOD) the grower changed the language to the following:
[W]orkers who do not produce a sufficient number of piece rate units to [sic] during a pay period will instead be paid on an hourly basis for the pay period. The Employer will provide a 2-day training session and workers will be allowed 4 days after the 2-day training session “break-in-period” to reach the production standards cited herein.
PRODUCTION STANDARDS: After completion of the training (2 days) and break-in-period (4-days), workers will be expected to work at a normal productive workman-like pace and keep up with the rest of the crew at a level of 90% of the average crew pace at the time that work is performed. If workers fail to keep up with the average crew after the above-referenced break-in-period, workers will be notified and can be terminated for failure to meet production standards in accordance with Employer’s progressive discipline policy. AR at P27.
The Certifying Officer (CO) stated regarding the deficiency:
If the employer who pays by the piece rate requires one or more minimum productivity standards for workers as a condition of job retention, such standards must be specified in the job offer and be no more than those required by the employer in 1977. Unless the OFLC Administrator approves a higher minimum, or, if the employer first applied for H-2A temporary labor certification after 1977, such standards must be no more than those normally required (at the time of the first Application for Temporary Employment Certification) by other employers for the activity in the area of intended employment. AR at P13.
Based upon the language presented by the application, the Certifying Officer (CO) believed that Washington Farm Labor Association and Sakuma Brothers Farms [Employers] were:
seeking to use a production standard that became more demanding with any increase in the AEWR Adverse Effect Wage Rate, which was an increase in expected productivity that offset the gains from a higher hourly wage, and was the type of conduct that the preamble to H-2A specifically seeks to prevent. The CO required Employer to remove the production standard, or provide a modified production standard that was specific, quantifiable, and consistent year-to-year. In addition, Employer had to remove any language that tied production standards to a minimum wage. AR at P13.
There was no evidence of applications prior to 1977, so the post-1977 rule applied. Also should the other deficiencies be resolved that the DOL “conduct a survey if required, or for a determination if it is normally required by other employers in the area of intended employment.” (17).
To this WAFLA and Sakuma Bros Farms appealed that the language they submitted complied in unbinding the wage and productivity standards. Further, the employer argued that the same language was approved in their application that they submitted the year before, though the AEWR declined. They argued that this made the standard less demanding in 2014 than 2013. Further that in Washington State there is no prevailing practice on strawberries, blueberry, blackberry, or raspberry harvests. AR at P27.
The court found that Washington Farm Labor Association and Sakuma Brothers Farms had not met its burden on this standard. The judge agreed with the interpretation of the Certifying Officer, ruling, “the standard in the H-2A application is impermissible” (17). The judge also found that WAFLA and Sakuma Brothers Farms had not demonstrated that its standard is “no more than those normally required…by other employers for the activity in the area of intended employment.” As required by regulation 20 C.F.R. § 655.122(I)(2)(iii). The judge ruled that the matter would be remanded to a survey for the determination of whether this proposed standard is normal in the berry industry.
Grower Lobby Campaigns to Defund Wage and Hour Enforcement Agencies
On June 5, 2014 a governor appointed Farm Work Group consisting of five grower advocates and five farm worker advocates convened in Ellensburg, Washington in where they learned the role of state agencies and discussed the issues of wage theft, pesticides, and retaliation.
As the daylong meeting progressed, it became clear that the grower lobby supported the legislative trend where certain state agencies involved in the enforcement of state laws were being underfunded and cut.
LnI – Labor and Industries is responsible the enforcement of state wage and hour laws. Their department is understaffed and underfunded.
ESD – The Employment Security Department is responsible for the oversight of H-2A applications and surveys growers to determine prevailing wages. The agency was accused of illegal activity by the grower lobbyist Scot Dilley during a special hearing in 2013. The department reported that they had the authority to consult legal opinions, however that due to recent budget cuts, they planned to discontinue monthly surveys during harvest.
DOH – The Department of Health was once responsible for keeping a record of pesticide related illnesses reported in Washington State from 2000 to 2010. The budget for this practice was cut by legislative order.
DOL – The Department of Labor is the federal agency responsible for enforcing federal wage and hour laws. The grower lobby has repeatedly attacked the Department of Labor for enforcing labor laws.
WSDA – The Washington State Department of Agriculture, which is no longer an enforcement agency due to legislative restructuring at the request of the agricultural industry lobby, is the special interest groups gem and ideal model of a state agency. The agency currently focuses on conducting market research and development for the industry and provides education and outreach that attempts to place the responsibility for worker safety upon individual workers as opposed to the growers.
It became clear in this meeting that there were implications that Mike Gempler and Scott Dilley were key lobbyists in influencing state and federal legislators to defund enforcement agencies and to restructure state resources for the benefit of the agricultural industries largest growers.
The most recent endeavor was to defend the mis-use of the H-2A program to import labor when there was no immediate emergency or crisis; they based this upon the desire to move away from undocumented labor.
The second legislative endeavor that the grower lobby advanced at this meeting was an attempt to reallocate state resources dedicated to housing the public towards grower efforts to house anticipated W-visa workers should Comprehensive Immigration Reform proposed in S-744 be passed by congress.
The Bottom Line
Profit is the driving factor in the agricultural industries choice to use piece-rates, and to influence oversight of state and federal regulations of wages. The case study above demonstrates that combined with illegal wage theft, one large berry growing corporation was capable of systematically increasing their earning potential by at least $12,904.50 per day during harvest.
We all know that wage theft is illegal. But even without wage theft, the corporation is able to increase their earning potential by $11,294.50 per day during the fresh market blueberry harvest of 2013 because they payed by piece-rate. This profit comes at the cost of workers ability to sustain themselves. A loss of $4.03 per hour adds up to $655.80 per month (160 hours), almost the equivalent of rent for a farm worker.