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Farmers Hiring Help Must Follow Labor Laws
By: Chuck Schwartau, University of Minnesota Extension Hutchinson Leader
February 15, 2008
Farmers with hired help, including family members, must follow rules complying with state and federal labor regulations.
The paperwork may leave some farmers wondering if they really want to have employees, but that shouldn’t be the case. Many Minnesota farms are more profitable because they have the right employees performing in the right positions. Fear of regulations and the work of keeping up proper filings and reportings shouldn’t deter a farm from moving ahead with good employees. A basic knowledge of labor laws or willingness to contract with someone to help with human resources issues is a must.
Here are three examples of what employers need to do:
Employers are responsible for securing an employment identification number to file tax withholding reports and make social security deposits. Completing the form SS-4, Application for Employer Identification Number, will do the trick. Once the SS-4 is completed, the IRS will issue a number. The SS-4 is available online at www.irs.gov. The state of Minnesota has a companion application, Form ABR, Application for Business Registration, that’s also required. It’s available at www.taxes.state.mn.us.
Worker’s compensation insurance is not an option; it’s required of all employers. Workers compensation should be secured before the first employee is put on the payroll. This is an insurance policy, not a tax levied on the business. The state of Minnesota imposes stiff penalties for being uninsured —up to $1,000 per day per employee.
The I-9 form, Employment Eligibility Verification, must be completed for all employees of the business, not just those who may not be U.S. citizens. This includes paid family employees.
A 2005 survey showed 38 percent of Minnesota dairy farms have more than two full-time equivalent employees. Even if respondents included themselves and paid family members as employees, it’s a fair assumption that most of those farms are employing some non-family employees.
(Chuck Schwartau is a livestock educator with University of Minnesota Extension.)
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