In a pivotal decision about the misclassification of immigrant laborers who come to the United States to do agricultural work under the H-2A visa program, the Tenth Circuit has concluded that employees otherwise exempt from the requirement to pay overtime and a minimum wage under the Fair Labor Standards Act or FLSA might still have to be paid a minimum wage based on the work they’re doing, even if their visa category permitted a lower wage. Mencia v. Allred, No. 14-4047, 2015 WL 8599358 (10th Cir. Dec. 14, 2015).

The problem in the Mencia case was that while the worker’s visa classified him as a “sheepherder,” which at that time only required the employer to pay “$750 per month plus food and lodging,” he was actually doing other work that would have required payment of a minimum wage if properly classified.

The immigrant argued that the specific exemptions for sheepherders was created because the work of a real sheepherder was tending sheep out on the range, far from the where the employer could keep track of his hours. A ranch hand, on the other hand, works close to the employer, and there is no reason the employer can’t keep track of his hours (and thus pay him a minimum wage). The Court of Appeals agreed.

What is an H-2A Visa? 

Workers on H-2A visas live and work far outside of the sight of most Americans.

General Requirements

The law permits employers to bring immigrants to the United States to fill temporary agricultural jobs. The employer first has to submit a request to the Department of Labor and receive a temporary labor certification.

The employer then submits a visa application to USCIS.

Once the employer’s visa request is approved, the workers outside the United States apply for the H-2A visa at a U.S. Embassy or Consulate abroad and then seek admission to the United States with their visa.

The immigrant must be from one of the countries eligible for the program.  And the immigrant is admitted for the length of time the labor certification specified.  With extensions, the immigrant can’t exceed three years in the United States as an H-2A.

Requirements for Sheepherders

The immigrant in the Mencia case was a Sheepherder, who entered the United States to work for part of the year each year to herd a farmer’s livestock.  There are about 2,000 workers who enter the United States on H-2A visas each year to herd sheep or goats.

The “sheepherder” classification, as the name implies, means their work is limited to herding  goats and sheep and are required to work out on the “range,” in remote locations, where the sheep graze. They live in housing provided by their employer and are on call 24 hours per day, 7 days a week, to tend to the sheep. The classification is not intended for workers who feed sheep at a feed lot.

Problems with the H-2A Program in General

There are legitimate criticisms of the H-2A program. Some argue that letting “guest workers” enter the United States for poverty wages permits employers to exploit the workers and that there might be U.S. workers willing to do the jobs if the employers were willing to pay a fair wage.

However, in reality the work is grueling, and often there are no U.S. workers willing to do these jobs, in remote locations, and be on call at all hours tending sheep. Especially for such low wages.

Combine that with the, the lack of potable water, the lack of access to food and medicine (or to report your employer for abuse), and the difficulty of the work, and some have accurately criticized the program as similar to slavery or indentured servitude.

Thus, when you hear a politician like Ben Carson advocate turning the 11 million undocumented immigrants in the United States into “guest workers,” this program is a good indication of what that would look like. It is not encouraging.

The new H-2A regulations requiring at least a minimum wage are a helpful step, but they still have an overtime problem (noted below), and minimum wage for such grueling work is hard to justify.

How Much Should H-2A Agricultural Workers Be Paid? 

That’s not really what the Mencia case is about, but it’s a good place to start.

Under the law in place during the Mencia case, employers paid sheepherders and “ranch hands” differently, with sheepherders making much less money, supposedly because they’re doing different work. For example, here is the sample wage calculation from the DOL’s current guidance on sheepherders.

H-2A Sheepherder wage calculation

That guidance is out of date, since the DOL published new H-2A regulations in October, 2015, which increased the wage for Sheepherders from $750 per week to $7.25 per hour for 48 hours of work per week.

However, while that’s a huge difference, it still doesn’t appear the current wage is compliant with the Fair Labor Standards Act (which is where this new Tenth Circuit decision comes in). Sheepherders still aren’t required to be paid overtime under the FLSA, which is why misclassification still matters.

If the worker is actually a “ranch hand” classified as a sheepherder, even the current regulations say he can work up to 48 hours a week at minimum wage.  And the nature of the sheepherder’s job is that he might be working more than 48 hours a week. And the regulations don’t require the employer to keep track of his hours, making it impossible to limit his work to 48 hours per week in real life.

Also some have criticized the new regulation as not going far enough; keeping the wage at $7.25 per hour makes it hard to attract U.S. workers to these jobs, which in turn makes it easy for employers to attract immigrants who may be less likely to report abuse. And no matter who is doing the work, $7.25 per hours is an incredibly low wage for such difficult work.

The Mencia case concerns the wage standard prior to the regulation change.  But it still contains an important analysis of the misclassification of H-2A agricultural workers so they can be paid less and raises the question of whether H-2A sheepherders who do work that could be classified as “ranch hand” work need to be paid overtime if they work more than 40 hours per week.

What are the Minimum Wage and Overtime Requirements? 

The federal government mandates a minimum wage of $7.25 per hour, which is also the wage H-2A sheepherders are now paid under the October, 2015 regulation.

Employees who are “principally engaged in the open range herding and livestock production” aren’t subject to the minimum wage and overtime requirements under the FLSA. Thus, the question before the Mencia court was whether the immigrant was really just a “sheepherder.”

If the FLSA applies, then then employees must be paid a minimum wage and those who work beyond 40 hours must be paid overtime, which requires payment of a wage that is 1.5 times the regular wage.

By classifying the immigrant in the Mencia as a “sheepherder,” the employer was able to pay him $750 per month (along with room and board) no matter how many hours he worked, which can come out to around $2 to $3 per hour.

A “Sheepherder” Who Performs the Work of a “Ranch Hand” Must Be Paid as a “Ranch Hand,” Not as a “Sheepherder.”

The issue in this case may seem a bit esoteric, but it is important for employers and employees to understand why misclassification of an employee matters.
Farm workers on H-2A visas make very little money, and they made even less when the immigrant in Mencia was working. And the employer doesn’t have to pay them a minimum wage or overtime if they’re honestly “sheepherders.”
The question before the Tenth Circuit in Mencia wasn’t whether $750 a week was a fair wage for a sheepherder but whether the employer had misclassified the employee to be able to pay him the lower wage.
The court went through the DOL’s regulations and the FLSA’s exemption for sheepherders in detail. It noted that “both the FLSA and the Special Procedures require employees to spend more than half their time raising sheep in a remote location where the sheep.” It then applied those rules to the facts of the case, concluding that there was “no plausible reading of the evidence under which Mr. Saenz was a sheepherder.”
The court said first that the exemption required sheepherders to “work in remote locations where animals graze,” and yet the immigrant’s work was usually “in the immediate vicinity of the ranch headquarters.” And the sheep weren’t grazing out on the range – the immigrant’s duties included feeding them hay.
The court’s second problem with the “sheepherder” designation was that the employer seemed to have kept good records of how many hours the employee worked each day, which contradicts the reason for the exemption. The court noted that the FLSA exemption for sheepherders was in place because sheepherders work out in remote locations and their hours can’t be easily quantified or monitored by the employer. Here the immigrant was working on the ranch in the view of his employer, and the employer said he worked about eight hours a day.
Third the court noted that the immigrant was spending more of his time doing odd jobs like weeding alfalfa and keeping up the farm than herding sheep, and thus that he couldn’t be classified has a “sheepherder” just so the employer could pay him the lower wage.The result, the court said, is that the immigrant must be paid at least a minimum wage for the hours he worked.

The Lesson From Mencia

If an agricultural worker comes to the United States to perform the work of a sheepherder, which permits the employer to do less recordkeeping and, in the end, pay him less, he ought to be doing the work of a sheepherder.
If the employer uses that classification and it turns out they’re having him work as a ranch hand, they’re going to pay back wages if he sues them.
And, if the employee can be considered a ranch hand based on the type of work he performs, as the Tenth Circuit has now held, there is a gaping hole in the current regulations related to whether the worker will have to be paid overtime.