ALBANY — Labor costs for New York farmers would rise by 17% if the state adopts a 40-hour mandatory overtime threshold for laborers employed in the agricultural industry, a new report by Farm Credit East concludes.

The current threshold for overtime pay is 60 hours per week. A three-member state wage panel is expected to review the threshold over the next several weeks and decide if it should remain unchanged or be reduced to as low as 40 hours.

Farm Credit East is a large lending organization focused on agricultural businesses.

“A significant increase in labor costs would serve as a disincentive to growing the agricultural sector, and in some cases, if farms cease operations or shift to less labor-intensive crops, jobs could be lost both in production agriculture as well as related processing and marketing businesses which rely on farm output,” its report states.

Farm Credit cited a scarcity of available labor in casting doubt on the ability of farmers to adjust to a lowering of the 60-hour threshold by beefing up their workforce to avoid overtime costs.

“In addition, because many farm employers provide worker housing, hiring additional workers, if available, is also likely to require increased housing costs, which are not included in this analysis,” the study said.

It suggested the full cost of moving the threshold to 40 hours could push labor costs for farmers up by 42% when phased-in hikes to the state minimum wage are factored in. The minimum wage in upstate New York will go to $13.20 per hour at the end of the year.

The average hourly pay for farmworkers now is $16.69 per hour, according to the report, which cited government wage data for the agricultural sector.

Progressive groups such as the New York Civil Liberties Union and the Columbia County Sanctuary Movement are urging that the threshold be dropped to 40 hours, arguing farm workers should not be denied a right extended to other wage earners.

“The vast majority of farmers impacted by these exploitative overtime laws are immigrants,” said Ivy Hest, spokeswoman for the sanctuary group. “We need to think about the health, safety, and quality of life for those who provide such an essential role in society.”

In 2019, following a decades-long lobbying effort, New York farmworkers won the right to join labor unions, garner overtime pay after 60 hours of work and get 24 consecutive hours of rest every seven calendar days.

That legislation involved a compromise supported by the New York Farm Bureau that set the overtime threshold at 60 hours.

Steve Ammerman, spokesman for the Farm Bureau, said the threshold should remain where it is, given what he called the severe financial impacts farmers would face if it were lowered. He also noted the Farm Credit report found some farmworkers could end up losing income if their employers had to pay them overtime after 40 hours because additional hours would be withheld given the cost.

“This report will be hard for New York state to ignore,” he said of the Farm Credit findings.

Farmworkers were excluded from overtime rights as part of the Fair Labor Standards Act of 1938, which was hailed by the late President Franklin Roosevelt as the most important piece of New Deal legislation since the creation of Social Security benefits.

Lisa Zucker and Simon McCormack, both NYCLU staffers, wrote in a blog post that the measure was an “intentional and racist compromise” backed by Roosevelt to get Southern Democrats to back his New Deal measures.

“This Jim Crow policy is so baked into farmers’ business plans that they claim they can’t survive without it,” they said.

The Farm Credit report said the higher labor costs could “move some farms from positive net earnings into a loss situation” and nudge some farms to “transition out of agriculture, opening land up to non-farm development in some areas.”

The members of the Farm Laborers Wage Board are: Denis Hughes, former president of the state AFL-CIO, Brenda McDuffie, president of the Buffalo Urban League; and David Fisher, president of the New York Farm Bureau.

A date for the board’s meeting has yet to be announced by state Labor Commissioner Roberta Reardon.