Agricultural Employment Guidelines
Ken Barnett, Extension Educator, Center for Dairy Profitability
I. Summary of Wisconsin Minimum Wage*
1. Minimum Rates – Agricultural employment (Effective 7/24/09)
a) Adults – 18 years $7.25/hr
b) Minors 17 years of age and under $7.25/hr
For State & Federal provisions on opportunity wage, contact Wisconsin Department of Workforce Development (DWD). See address below.
2. Allowance for Board & Lodging*: Where meals or lodging (or both) are furnished by the agricultural employer (and accepted/received by the employee), a deduction from the employees cash wages may be made, but cannot exceed the following amounts (Effective 7/24/09):
a) Lodging – Adults and Minors: $58.00 per week (7 days) or $8.30 per day
b) Meals (3/day) – Adults and Minors: $87.00 per week (7 days) or $4.15 per meal
* Source: WI DWD – Equal Rights Division, P.O. Box 8928, Madison, WI 53708, Phone: (608) 266-6860, www.dwd.state.wi.us/er
II. Social Security (SS) and Medicare (MD)
Toll Free Number: 1-800-772-1213, www.ssa.gov
1. Deduction Rates for Employees:
2013 -6.2% SS up to $113,700; 1.45% MD on all earnings.
2. General Guidelines (Effective – January 1994):
a) Each employee (and all dependents claimed) must have SS number. Use Form SS-5 to apply for SS number.
b) An Employer Identification Number (EIN) is required. Use Form SS-4.
c) Deduction is made for all employees if you pay out $2500 or more per year in agricultural wages. If less than $2500, then deduct SS and MD from the cash wages of each employee paid $150 or more per year.
d) Employer deducts SS & MD from cash portion of wage (not room & board). The amount is matched by the employer and deposited regularly at your local bank or sent in with income tax payments (See IRS Publ. 51, Circ. A: Agricultural Employer’s Tax Guide).
e) Deduct SS & MD on wages paid to spouse and children 18 and over. You should withhold on all wage earners if incorporated.
3. Rate for self-employed is 15.3% (12.4% SS up to $113,700 plus 2.9% MD on all earnings) in 2013. One-half is deductible as a business expense.
III. Income Tax Withholding www.irs.ustreas.gov
Beginning 1/1/90, you must withhold Federal income tax on all cash wages paid that are subject to SS and MD taxes. Employee must provide Form W-4 (See IRS Publ. 51, Circ. A: Agricultural Employer’s Tax Guide and IRS Publ. 15, Circ. E: Employers Tax Guide for tax tables). IRS form 1099-Misc. must be prepared on payments of $600 or more for services performed by or rents paid to persons not treated as employees.
NOTE: Exemption is possible if no tax liability is foreseen. See Line 6 of Form W-4.
IV. Records Required
Employer must keep the following records under the Wisconsin minimum wage law for at least three years for each employee:
1. Name and address
2. Date of birth
3. Dates employment began and ended
4. Time work began and ended each day
5. Time each meal period began and ended (if meal time is deducted from work time and only if work activity does not cease on a regularly scheduled basis)
6. Total hours worked daily and weekly
7. Rate of pay and wages paid for each payroll period
8. Amount and reason for each deduction from wages
9. Output of employee, if paid on other than a time basis
Putting the information from items 6 to 8 on each paycheck or pay envelope will be appreciated by your employee(s).
If the federal minimum wage applies, there are additional records that one is required to keep.
NOTES: Employee records shall be made available for inspection by a duly authorized deputy of the Wisconsin DWD. You must provide the employee a W-2 statement for all compensation (cash and non-cash or benefits paid) by January 31 (or within 30 days of IV. Records Required (Cont.) termination of employment). Summarize and submit all W-2’s on Form W-3 by the last day of February.
V. Federal Minimum Wage *
Effective 7/24/09 $7.25/hour
For agriculture, the federal minimum wage rate applies only if you hire 500 worker days in any calendar quarter of the previous calendar year. A worker day is defined as any day during which an employee performs agricultural work for at least one hour. * Ref:Federal Wage/Hour Division, 212 E. Washington Ave., Madison, WI 53703, Phone: (608) 264-5221, http://www.dol.gov/whd
VI. Wisconsin Worker’s Compensation Law*
1. If you are a farmer, you must provide Worker’s Compensation insurance if you employ six or more employees (full-time or part-time) at one or more locations working on the same day for 20 days (consecutive or non-consecutive) during a calendar year. On each of the 20 days, it can be the same six employees or six different people. After the 20th day, farmers have 10 days to obtain insurance.
2. Family members (parents, spouse, children, brothers, sisters, in-laws) are not deemed to be employees for this purpose.
3. Family farm corporations with all shareholders related (as in 2 above) are exempt, until “outside labor” meets the 6 and 20 stated in 1 above.
* Ref: DWD Division of Worker’s Compensation, P.O. Box 7901, Madison, WI 53707, Phone: (608) 266-1340, www.dwd.state.wi.us/wc/default.htm
VII. Federal Child Labor Law
1. Restricts jobs which minors (under age 16) can perform, except:
a) Minors employed on farm owned/operated by parent/guardian
b) Minors (14-15) who have successfully completed a training program in tractor/machinery operation
2. Prohibits employment of children under age 16 during school hours, with the following exceptions:
a) Minors working on farms owned/operated by parent/guardian and
b) Minors (12-13 yrs.) working for others than parent/guardian only with written consent of parent/guardian, and
c) Minors under 12 with above written consent if employed on farm exempt from Federal minimum wage.
NOTES: A meal period of no less than 30 minutes is required for minors after 6 consecutive hours of employment (or consistent with regular meal-time hours). A “break time” is optional. However, if given, it is considered work time if breaks are less than 30 minutes. For more information on the maximum hours of work per day and days per week, and permitted time of day which minors can work, see “Employment of Minors Guide” (ERD-4758-P). See address and phone number listed under Section I.
VIII. Wisconsin Act 455
Effective May 1, 1996, no person may direct or permit a child under the age of 16 years to operate a farm tractor or self-propelled implement of husbandry on a public road unless the child has been certified as successfully completing a Tractor and Machinery Certification Course. This law does not apply to the operation of a farm tractor or self-propelled implement of husbandry that is crossing perpendicular to the direction of the road. This law applies to both family and non-family members. Penalties for VIII. Wisconsin Act 455 (Cont.) failure to comply with this law took effect starting July 1, 1997. For further information, contact the UW Center for Agricultural Safety and Health at fyi.extension.wisc.edu/agsafety/.
IX. Federal Unemployment Tax Act
These provisions apply only to agricultural employers who:
1. Pay cash wages for agricultural labor of $20,000 or more in a quarter in any calendar year,
2. Employ 10 or more workers in agricultural labor at for some part of a day in 20 or more weeks of any calendar year.
X. Citizenship and Immigration Services (CIS)*
Effective June 1, 1987, you may hire only U.S. citizens or aliens authorized to work in the U.S.
1. New employees (citizens and noncitizens) must complete and sign Form I-9 to certify their eligibility.
2. Retain Form I-9 for 3 years (or for 1 year past end of employment, whichever is longer).
3. CIS or DWD officers may request you to provide Form I-9 for review. The form must also be available for inspection by authorized U.S. Government officials from
the Department of Homeland Security, Department of Labor, or Department of Justice.
*Ref: U.S. Citizenship and Immigration Services, 310 East Knapp Street, Milwaukee, WI 53202, Phone: (800) 375-5283, www.uscis.gov/portal/site/uscis
DWD Division of Worker’s Compensation, P.O. Box 7901, Madison, WI 53707, Phone: (608) 266-1340, www.dwd.state.wi.us/wc/default.htm