Workers comp ruling under fire
By ALTA LECOMPTE
Las Cruces Bulletin
Advocates for the agriculture industry are urging state legislators to fight a recent New Mexico Supreme Court decision requiring farmers and ranchers to provide workers compensation insurance for their workers.
Whether the lawmakers can or will do anything to mitigate the impact of the ruling on small farmers and ranchers remains to be seen.
The legislature’s interim Economic and Rural Development Committee heard from both the Workers Compensation Administration (WCA) and opponents of the change at an Aug. 3 meeting held in Las Cruces.
The mandate to insure workers applies to agricultural businesses with three or more paid employees, the court stated in its June 30 opinion. The ruling struck down the long-standing exemption of agricultural workers from workers comp insurance coverage.
Legislators voice concerns
“From what Rep. Hall said, the final mandate has not come down yet, but it looks like the Supreme Court is saying the provision covers agricultural workers,” said committee chair Rick Little, a Republican representing Doña Ana and Otero counties. “We’re going to see what comes down. If it stays like it is, things are going to be tough (for small farmers).”
Little, who owns R. Little Enterprises in Chaparral, said as a small business owner, he is concerned about the impact on
SEE RULING, PAGE 27 “I wanted to debunk claims by the Center for Law and Poverty that the agricultural industry is this grand, profit making, gentleman’s industry,”
— Zach Riley, director of governmental affairs for the New Mexico Farm & Livestock Bureau RULING
CONTINUED FROM 25
New Mexico’s farmers.
“I think we’re going to have to take a look at it in the legislative session and see where we can find some common ground,” said Senate Pro Tem Mary Kay Papen, a Democrat representing Doña Ana County and an advisory member of the interim committee.
“I think it’s important that we look at our agriculture industry and what we’re doing to it. We can’t afford to put our agriculture industry out of business,” Papen said.
While unpaid family members are still exempt from the coverage mandate, family members who are paid must be insured.
“If two sons and daughters are out picking onions, what do you do?” Papen asked. “I think if only family members are working, a farmer shouldn’t have to pay for workers comp insurance.”
Papen declined to speculate on whether exempting paid family members would be the “common ground” she advocated.
In the details
According to a fact sheet the New Mexico Workers Compensation Commission distributed at the legislative committee meeting, “family members would be volunteers and not employees. However if the member is paid wages for services performed, they may be counted as an employee for purposes of determining whether workers’ compensation coverage is required.”
Farmers and ranchers who perform work on each other’s property also would be considered volunteers unless they are paid wages, the WCA states An owner or executive employee may elect to be excluded from coverage, but must be counted as an employee when a determination is made as to whether the business has three or more employees.
Determining who is a paid worker gets a bit murky, however, in the case of independent contractors. The Workers Comp Administration states that this determination must be made on a case-by-case basis. The decision would be based on whether the business owner or the contractor has the right to control the work being done.
“If you are unsure how to classify workers employed by your business, you should consult an attorney,” the WCA recommends.
Classification codes and premiums are determined by insurance company underwriters, not the WCA, the WCA states.
If an agricultural operation fails to obtain a policy, the WCA may seek a temporary restraining order. The agricultural business could face penalties of as much as $1,000 a day for non-compliance.
If an employee is injured when the employer does not have coverage in place, the employee can file a claim with the Uninsured Employers’ Fund. If the fund pays benefits, the business will be ordered to reimburse the payments plus penalties of 15 to 50 percent, interest and fees.
Ag industry concerns
The most frequently voiced concern appears to be the impact of the cost of covering workers on small agricultural businesses — which make up most of the state’s farms and ranches.
“Only 3 percent of farms in New Mexico are corporate farms,” said Zach Riley, director of governmental affairs for the New Mexico Farm & Livestock Bureau.
Riley said he found out about the legislative committee hearing a week before it took place, and learned the WCA was to be the sole presenter. He got on the agenda, and refuted some common beliefs about farmers’ and ranchers’ ability to pay, Riley said.
He said last year the state’s gross output was $4 billion. In Doña Ana County, for example the average farm income in 2014 was $13,000.
“I wanted to debunk claims by the Center for Law and Poverty that the agricultural industry is this grand, profit making, gentleman’s industry,” Riley said. “If we’re part of a multi-billion dollar industry, clearly someone is not writing me a healthy enough paycheck.”
Riley said one rancher and one ranch hand would likely fall below the level at which coverage is required, but “we’re being advised it should be considered.”
“I’ve told my story to three different committees,” he said. “There’s always the same outcome — empathy and the understanding that something has to he done to safeguard the oldest industry in our state. “Sen. McSorley … looked at me and said, ‘Now we’re going to have to figure out how to protect the mom and pop shops.’” Riley said: “They’re hearing us.”
He acknowledged, “a complete and total exemption is probably out of the picture.”
Riley said better guidelines are needed for the sector to deal with the workers comp insurance process.
The issue now, he said, is how to mitigate costs to the small producer.
“That’s something we’ll work on with the legislature,” he said.
Ag’s unique challenges
Riley said although small businesses in other industries have had to learn to deal with workers comp, agriculture has unique challenges, including the degree of difficulty of labor management and the inability to source costs.
“Beef on the hoof has to be sold for whatever the price is at the time,” he said. “We can’t say we’re going to raise prices.”
He said there’s a great deal of uncertainty around what the cost of insurance will be for each individual producer.
“The problem I foresee is the same that has happened in several other states,” Riley said. “The only people able to continue to do business are the big corporate guys who can pay to play.”
Compliance starts now
“As of August 4, any agricultural laborer injured on the job (is entitled to claim benefits),” Diana Sandoval-Tapia, public information officer for the WCA, said.
Sandoval-Tapia said the WCA in fall 2015 did statewide tours to inform employers about the law.
“Our compliance bureau recently sent out a mass mailing to every employer we know of. We encourage people to get coverage as soon as possible through anybody licensed to sell insurance.”
She said agricultural employers who don’t know where to find an agent should call the Independent Insurance Agents of New Mexico at 505-843-7231.
She said employers who have questions for WCA should call the compliance bureau chief at 505-841-6851. Alta LeCompte can be reached at email@example.com or 575-343-7478.