A bill requiring Oregon farmers to pay higher overtime wages has passed a key legislative committee, though it now includes a hefty price tag that may hinder further progress.

The House Rules Committee voted 4-3 to approve House Bill 2358 with an amendment that would phase out the agricultural overtime exemption over three years and allocate $100 million to help farmers make the transition.

To put that amount in perspective, it’s more than twice the general fund tax dollars appropriated for the entire Oregon Department of Agriculture during the most recent biennium.

Before the House votes on HB 2358, it must first clear the budget-setting Joint Committee on Ways and Means. The bill would then need to pass the Senate before the end of this year’s legislative session, which is constitutionally required to end by June 27.

Under the amended version of HB 2358, farm workers would be owed one-and-a-half the regular wage rate after 55 hours per week in 2022, after 48 hours per week in 2023 and after 40 hours per week in 2024.

Rep. Andrea Salinas, D-Lake Oswego, said that “everybody thought the bill was dead” but she proposed the amendment to provide justice for farm workers while alleviating the economic burden on their employers.

“It won’t make them whole by any stretch but it will help them transition,” she said during a June 16 legislative hearing.

The $100 million would be overseen by the Oregon Business Development Department, which would pay eligible farmers for 80% of the amount they spent on overtime in 2022, 2023 and 2024. Priority would go to farmers who paid the highest proportion of their net income in overtime and who employed fewer than 25 workers per year.

Requiring farmers to pay overtime wages may cause a shift to mechanization or drive some crops out-of-state but it’s ultimately what’s fair to workers, Salinas said.

With the neighboring states of Washington and Californian ending the agricultural overtime exemption, “I don’t see how Oregon can avoid this,” she said.

Rep. Daniel Bonham, R-The Dalles, said there is “broad recognition that something should be done” about the agricultural overtime exemption, but he would prefer that a task force issue recommendations for change later this year.

For example, farm workers could be paid overtime wages after 40 hours per week except for the harvest periods for specific labor-intensive crops, he said. “Something like that could be a compromise solution.”

Establishing a task force is “not an intention to dodge” the issue but would “deal thoughtfully with the unintended consequences,” said Rep. Christine Drazan, R-Canby.

Farmers must accept market prices for crops and livestock, unlike other industries that can raise prices to compensate for Oregon’s stricter labor regulations, she said. “That isn’t how this industry works.”

Growers cannot force buyers to purchase products from Oregon instead of competing regions, so they’ll switch to other crops and reduce the variety of what’s grown in-state, Drazan said.

“We feed people out of Oregon and I want that to continue to be the case,” she said.