Earlier this month, California Gov. Jerry Brown signed a bill that will make farmworkers in the nation’s largest agricultural state entitled to the same overtime pay as most other hourly workers.
So how will this new law affect greenhouse growers? We asked some of California’s most prominent greenhouse growing operations their thoughts. Here’s what they had to say:
“We Either Automate Or Disintegrate”
Eduard Van Wingerden, CEO of Ever-Bloom Inc., says his company was already committed to automating its facility because of the $15 minimum wage that will be implemented over the next four years. The passing of AB 1066 will push Ever-Bloom to move even faster to accomplish these changes.
“We have purchased a ‘pipe/rail’ growing system, that will make all manual spraying obsolete, a robot that will spray all of our greenhouses. The pipe/rail system also allows for harvesting carts, planting carts, and maintenance equipment to more effectively and efficiently do the day-to-day jobs. We will purchase automated packing equipment that will eliminate about eight of our current 20 packers. We expect the ROI to be right around five years.
We currently have 50 employees, but within four years we expect to employ around 30 people or less, working eight-hour days with some overtime hours on Saturday. Nonetheless, this means that between the minimum wage going up 50% plus overtime after eight hours, our payroll will be higher four years from now with 30 employees than it is today with 50.
We currently provide our employees with health insurance, five paid holidays, five paid sick days, paid vacations from one to four weeks (depending on length of employment), a 401K plan, yearly bonuses, and affordable housing. Depending on how these new laws affect our bottom line, these benefits will be modified.
We do not have a choice, we either automate or disintegrate.”
Some Might Consider Cutting Labor-Intensive Crops
Janet Kister, owner of Sunlet Nursery, says that between now and 2019, when the new overtime law takes effect (on top of the yearly increase in minimum wage), the company plans to institute as many labor-saving measures as it can, including evaluating labor-intensive crops to reduce numbers or possibly eliminate them, as well as implementing efficiency standards and automating wherever feasible.
“I expect we will see an increase in the various types of mechanization offered over the next several years as California operators look to reduce their labor,” Kister says. “Once the law takes effect, we will be adjusting work schedules and cutting hours as necessary to hold the overtime hours to a minimum. Each year, we will evaluate these costs against the revenue we can receive for our plants to see what more will be needed to do for the following year.”
If you are a grower in California, how will this new law affect you? Voice your thoughts in the comment box below.