Today, Senator Shannon Grove (R-Bakersfield) introduced legislation to create a tax credit for agricultural employers to help cover the costs of providing overtime wages to farmworkers. SB 921, co-sponsored by California Association of Winegrape Growers (CAWG) and California Farm Bureau, aims to ensure that farmworkers have more opportunities to earn overtime pay while also providing relief to struggling agricultural businesses.
“I'm proud to introduce SB 921, a straightforward bill that gives California's farm employers a payroll tax credit to help cover the extra cost of overtime pay for our hardworking farmworkers,” said Senator Shannon Grove. “This means more overtime hours and better take-home pay for the folks who put food on America's tables. This is a win-win solution for both the business and our farm workers who want to work more hours during their peak season. A huge thank you to my friends at the California Farm Bureau and the California Association of Winegrape Growers for partnering with me on this common-sense solution.”
The bill addresses concerns farmworkers themselves raised with lawmakers in Sacramento last year in support of SB 628, a similar agricultural overtime tax credit that Grove introduced.
SB 921 would do the following:
Establish a payroll tax credit allowing agricultural employers to offset the cost of overtime wages paid to their ag employees. NOTE: “Overtime wages” means the difference between the employees’ overtime rate of pay and their regular rate of pay.
Help increase available overtime hours for farmworkers, boosting their take-home pay, and supporting much-needed financial stability in rural California.
“California lawmakers need to come together in a bipartisan manner, just as leaders have done in Oregon, Massachusetts, and New York, to ensure farmworkers can earn overtime pay while keeping farms viable,” said Natalie Collins, President of the California Association of Winegrape Growers. “Last year, California found $420 million to expand a tax credit for the entertainment industry. California invests in what it values, and agriculture is asking to be valued. CAWG thanks Senator Grove for her leadership on this important issue.”
“Farmers warned the Legislature a decade ago that changes to the agricultural overtime law would reduce work hours and cost farmworkers wages, and those concerns have proven true,” said California Farm Bureau President Shannon Douglass. “Many farmworker families have seen hours and earnings decline, a reality farmworkers themselves shared with lawmakers in Sacramento last year in support of Senator Grove’s ag overtime tax credit bill, while family farms operating on thin margins have been forced to make hard choices just to avoid operating at a loss. This tax credit is a practical solution that puts money directly back into the hands of farmworkers, helps farms remain viable employers and strengthens the rural communities that grow our food. It’s an investment in California’s food security and the people who make it possible.”
Recent research supports these concerns. A 2023 study by the University of California, Berkeley (“California’s Overtime Law for Agricultural Workers: What Happened to Worker Hours and Pay?” ARE Update 27(1): 1–4. University of California Giannini Foundation of Agricultural Economics) found that California farmworkers have been earning less since the “Phase-In Overtime for Agricultural Workers Act of 2016” became law. The study concluded, “This early evidence suggests that the law may not be benefiting the workers they aim to protect.”
SB 921 builds on the success of the $420 million annual increase in the California’s Film and Television Tax Credit Program in 2025. Recently 52 film projects were selected for the latest round of film tax credits. Collectively, those productions will employ an estimated 8,900 cast & crew and 46,400 background performers statewide. Conversely, the effect of a tax credit for agricultural overtime could be much greater for those working in roughly 415,000 (full-time equivalent) jobs.
SB 921 follows the lead of other states that have in a bipartisan manner recognized the unintended consequences of agricultural overtime laws and taken action to ensure farmworkers can still earn overtime pay:
Oregon offers a refundable personal or corporate income tax credit for employers based on overtime wages paid to agricultural workers through 2028.
New York offers a similar tax credit through 2032 that is based on the eligible overtime agricultural businesses pay.
Senator Adam Gómez (D-Springfield) is pursuing a tax credit in Massachusetts to reimburse growers for the cost of overtime wages in agriculture.
Together, Senator Shannon Grove, CAWG and the California Farm Bureau are advocating for a policy that both increases farmworker earnings and provides relief to an industry facing unprecedented financial challenges. California must ensure that policies designed to help farmworkers do not inadvertently reduce their wages.