Vermont Legislature SmartTranscripts:

[Marc Mihaly]: Welcome everybody to the House Committee on General and Housing. Today is Wednesday, March. What we're doing is we have a caucus of the whole in an hour, so we have an hour. And in this hour, we're going to hear two people tell us about S two thirty. S two thirty is a sort of omnibus labor bill that came from the Senate, and so we are looking at various issues that aren't necessarily in the bill now, but would be germane to the bill should we choose to do anything about it. One of the things that we wondered about, because there's a bill on our wall, is whether or not we should look at extreme temperatures, and that issue is a very tricky one, and it's one that we're just digging into to see whether we wanna pursue. And then we're gonna go to seven seventy two, the landlord tenant bill, because we have two amendments which we have to take straw polls on. So

[Steve Collier]: that's

[Marc Mihaly]: what we're gonna do. So let's start with s two thirty. We have Rowan Hawthorne and Steve Collier with us. So, both of you, take it away, tell us who you are and what you think. I am Rowan. You know what, actually, go ahead and introduce yourselves, and then I'm going to have the committee introduce yourself.

[Rowan Hawthorne]: Hi, I'm Rowan Hawthorne, Policy and Bridge State Affairs Director at the Good

[Steve Collier]: morning everyone, Steve Collier, I'm with the agency back.

[Marc Mihaly]: Good to see you. Debbie, you want to take it away and tell them who we are?

[Deborah "Debbie" Dolgin]: I'm Debbie Dolgin. I work with St. Johnsbury, Concord, and Kirby.

[Thomas "Tom" Charlton]: I'm Tom Charlton, Athens, Chester, Crafton, and Windham.

[Steve Collier]: Joe Parsons, Newbury, Chopsal, and Groff.

[Ashley Bartley]: Nice to see you again. Ashley Bartley, Fairfax, Virgil.

[Marc Mihaly]: And I'm Marc Mihaly. I represent Caledonia, Plainfield and Marshfield, the Midlands Chair.

[Emilie Krasnow]: Emilie Krasnow, Chittenden and I in South Burlington. Hello. Saudia LaMont, I'm on Zoom, sorry about that.

[Marc Mihaly]: Hi, Saudia, good

[Elizabeth Burrows]: morning. I'm Elizabeth Burrows and I represent Windsor One, which is Heartland West Windsor, Windsor.

[Mary E. Howard]: I'm Mary E. Howard. I represent Rutland City District 6. Gayle

[Gayle Pezzo]: Pezzo, I represent Rutland City District 4, Maine College Health.

[Marc Mihaly]: All right.

[Rowan Hawthorne]: So to start off with today, know at the beginning, you mentioned the extreme heat standard, and my understanding is we are here today to talk about the agricultural piece of the marine boreal introductions. My commissioner is planning to come tomorrow morning along with the Federal Government and Corporate Compensation to talk about that extreme risk standard.

[Marc Mihaly]: Okay, great.

[Rowan Hawthorne]: The study, first of my understanding is, and the goal that I last saw is that there is a study that is potentially considered adding to S230 that would require the agency of agriculture and the Department of Labor to work together to produce a report on lodging rates and whether those should be updated, what the calculation was, and I just wanna make sure that's correct. Okay, fantastic. Honestly, the Department of Labor is comfortable with this. We think this would be a really interesting exercise as well to see where it came from. I checked with my Wage and Hour team and our Labor Market Information team, who actually does the annual calculation.

[Marc Mihaly]: Could you talk up until the

[Rowan Hawthorne]: Yeah, so I spoke with my Labor Market Information team and my Wage and Hour team, and neither of them are familiar with where the deductions and the calculation for the deductions comes from. So this would be an interesting exercise for us that we are more than happy to participate in and then produce a report for next year on this. Anything to add?

[Steve Collier]: Sure, if you'd like. Steve Collier from the agency. This, I mean fundamentally this is about an issue that's been percolating for a while, and it's really about farm workers are exempt from minimum wage requirements, and that's a long standing issue for folks who question the validity of it. It's good reason to question the validity of it. However, in our view, at least the Agency of Agriculture, both farmers and farm workers have a very mutually dependent relationship, and both farmers and farm workers can be quite vulnerable. Farmers can be very vulnerable to economic conditions and ongoing viability, we lose farms, we lose the farmland, we need to grow food, so it's pivotal that we have the ability to support farmers as much as we can. Currently farm workers can be from very vulnerable populations and can be subject to exploitation. We want to make sure that doesn't happen. The key issue here though is that most farmers who have regular farm workers also provide lodging and food, and that's a huge benefit that is not calculated, it's not because farmer workers are not subject to minimum wage, it's not currently calculated as part of that requirement For some, for other employers and employees in the state, there are deductions that are taken that are allowed, but those deductions, as Rowan just said, we don't really know what they're based on, and they are nothing close to fair market value. So right now, there's an artificially low rate. If you provide full room and board for an employee for a week, the most you can deduct from wages is $112.41 which is about a little less than eight hours of minimum wage. Minimum wage right now is 14.42. So we know that you can't possibly have a place to live and food for $112 a week. So I think this is a great thing for the committee to ask is to investigate this issue further, and that's kind of what we've been talking about is on the minimum wage, we really don't know how it would impact farms. Our sense is that almost all farms pay more than minimum wage and we believe that likely all farms pay minimum wage if you could include the other expenses, but maybe perhaps not with the way that it's calculated right now. So we think it's a great idea to dig into this, to see what the costs actually are to farmers, what the value of the benefit is, and how farm workers are being paid compared to other workers when you include the benefits they receive. So we think it's a good initiative, a good way to evaluate this problem, this potential problem without just doing something and hoping for the

[Marc Mihaly]: best. Okay.

[Thomas "Tom" Charlton]: As this goes forward, I would ask somebody who is familiar with business taxes especially the way the farm workers might be paying income tax and the farmers are paying income. What we don't want to do is raise a magical number and then expose the workers to an income tax liability they might not have had before. There may be other ways in tax code that the cost of housing is being captured on the books for the farmer that might be preferable to this and maybe from just not using this and that's why it's going on. But we wanna look at the tax liability so we don't unintentionally create a disaster for ten forty.

[Steve Collier]: Understood. A taxable benefit could be could change the dynamics. I mean, it may very well be that the result of this report is that nothing should change from our perspective, or it may be there should be some changes, but you're absolutely right, the whole scope of the issue ought to be evaluated for both farmers and farm workers. Yes.

[Emilie Krasnow]: That's a really great point. And I really appreciate your support. I think as policymakers and in your roles gathering the data, and again, we're not necessarily going to act on this, but just so we have the accurate, most up to date information, I think it's really important. I really appreciate that you both in your capacities are willing to take on that work because we know that a lot of times legislators give more work to your agencies, and I'm glad that you're also interested in gathering this information and frame that as a good exercise and important. So I appreciate your willingness to take that on.

[Steve Collier]: Well, thank you for that. It was my standard response to a report.

[Emilie Krasnow]: I know.

[Steve Collier]: No, thank you. Yeah. But in this case, do think that it's, there's some real sensitivities here and some really conflicting opinions. I think digging in a little deeper and getting some facts to help educate that result would be beneficial.

[Emilie Krasnow]: I really appreciate that.

[Marc Mihaly]: I think that when you come back, I hope you can include in your work some hypotheticals which would look at a hypothetical farmer and a hypothetical tenant or employee just sort of look at the math, because, well, two concerns I have. One is, I know I was at the law school, and at the law school we run a summer program, and the summer program has teachers who come in from all over the country in the summer, and we pay them terribly, and give them a house, and they bring their families. And then of course they discover that the value of the house, which is considerable, is taxable income. And I'm a little concerned, as Tom said, that with respect to the farm worker, we may have pushed them into a new category where they didn't have to pay or could file an EZ or something before, and then we pushed them into a new category. And I think that's something that very specifically has to be looked at. I think there's also a larger policy concern I have, which, frankly, I have no solution to, which is that I'm afraid that the real cost of housing and food is so great that people will be working for nothing. How do we deal? People do need money, so the question is, how do we deal with it? And also from the tax perspective, whether there's some way we could structure this, as Tom alluded to, could it be structured in some way that it is deductible to the employer, or is it just enough that it's fine that the farmer can treat it as a business expense? I think those tax issues have to be looked into.

[Emilie Krasnow]: It reminds me similarly of, like, legislature, like how we have the nontaxable, know, so it doesn't count in those brackets, so it would kind of be a benefit.

[Marc Mihaly]: Right. Are there ways to Right. Anyway, not sure. You might have to reach outside of your agencies.

[Steve Collier]: I think it makes sense to consult the tax department.

[Marc Mihaly]: Yeah, I think in looking at the tax department. Yeah.

[Emilie Krasnow]: You so much.

[Marc Mihaly]: Thank you. Any other questions from the committee? When I

[Rowan Hawthorne]: have a

[Leonora Dodge]: quick one.

[Marc Mihaly]: Hi. Yes. Hey, Leonora. Welcome.

[Leonora Dodge]: Thank you. I'm so sorry. I've been absent from a lot of the conversations, and so if this is something that's already been covered, I would just appreciate a repetition of the answer. But, any report that that looks at tax liabilities or the costs on the farmers, for providing housing must include the quality of housing because if we're talking about market, you know, if we're talking about market forces and the the value that's being provided to a worker who would otherwise maybe not even provide the the labor if this wasn't even a benefit. Right? Because, realistically, if somebody's working, like, sort of third shift in a remote location in an exhausting job that is really undesirable to local workers who might have their own housing. You know, there there are a lot of market forces working against the dairy farm worker to actually complete their tasks. So, I hope this this is not looked at in isolation as the same thing as, say, nurses being provided, housing or, faculty being provided housing. I don't think we're talking about the same quality of housing. And if we are, I would love to see that, but I would I I think that's a crucial part of the report.

[Marc Mihaly]: In other words, if I could pile on, Leonora, you might be having to look at a range that reflects the difference between someone who provides an apartment and someone who provides a dormitory. Yes? I thought this was, we were talking about a report that's not just it's Right. For any employer. Yeah. Okay. We are. I I just wanted to That is true.

[Leonora Dodge]: Right. And that's precisely why and that's precisely why if I could just follow-up, that's precisely my concern is that if we conflate the kind of benefit that we're using to attract, somebody who might have a lot of other options for getting housing because of the type of pay that they would be receiving or because of the type of skills that they might be providing versus the situation of a dairy worker who is facing a lot of other challenges, especially today, you know, that it would be assuming a lot of flexibility on a on a on a worker that, you know, that may just not be there. And Right.

[Marc Mihaly]: In other words, Leonora, we don't wanna be in a situation where we're allowing a deduct for a nice apartment that might work for a traveling nurse when it's a dormitory embedded in the dormitory. There has to be some who take that into account. Sorry to complexify your work, but.

[Steve Collier]: If I may just weigh in a bit, so farm worker housing is an incredibly complex issue. There's no some farm worker housing is terrific, some is not. I don't think there's any doubt that different types of housing may have a different reasonable value. I don't think the current deductions in law provide for any housing, like anything that's close approximating fair, the way that I read the language, we would not be evaluating housing and I think if you want someone to evaluate housing, that's really not probably either of our agencies, that's outside of it, we don't do, that's public safety that in different towns that do public life safety codes, which do apply to all farm worker housing, whether and how that's enforced are different issues, this is a topic we're all aware of, everyone would like there to be more money available to help farmers improve their housing, VHCb has worked on that, we've worked on that, others have worked on that, The problem is, and the question has been, do we require things that farms can't afford, which means that maybe there's no housing, there's no employment, no housing, no farm, and so it's a challenging issue, not making light of it, but I don't think, from my perspective, it was not

[Marc Mihaly]: within the

[Steve Collier]: scope of this report about what amount of money, if any, should be deducted from minimum wage.

[Emilie Krasnow]: No, I agree. So for me, what you're saying is completely accurate that that's your role. And I think the role of the legislature, whoever comes back, then can take this part. And if they want to then have more direction towards different ideas, they can work with different agencies on writing the bill about it. But this directive is very narrow in that scope. And that's something, of course, Rev. Dodge, I'm also interested in looking at at some point if I'm back as well. But for this, I think it was pretty narrow in their direction, and they would need to expand to other agencies

[Marc Mihaly]: for a whole housing situation. I mean, we're This

[Emilie Krasnow]: is more in our scope of, since our committee has multiple jurisdictions, this is in our labor jurisdiction, not more of our housing jurisdiction, I think.

[Marc Mihaly]: And it's maybe both labor and housing, but it's also an ag. Agriculture committee will deal with it. But we're gonna have to look at things that I think will end up in ways and means. Like, for example, I'm just throwing this out as a possibility, I'm not advocating it at this point, but we could have a split tax treatment deduction issue where, let's say the value of housing is not $112 housing and food, but let's say it was $250 or $300 but we could have a situation where we split it so that the farmer can deduct as a business expense the full value of what's provided, and that report and the legislation backstops that so they can, but the deduct from the wages of the farm worker is less, because otherwise the farm worker would end up owing money. So, there's all kinds of possibilities, but that's ours. Right. Anything else for these wonderful people?

[Steve Collier]: I've never heard

[Emilie Krasnow]: that before. I was just gonna say how many times we've been in the witness statements.

[Marc Mihaly]: Hey. One. One. Alright. Wow. Yeah. Today, that's good. Anything else? Thanks so much.

[Emilie Krasnow]: Thanks again for taking I this

[Marc Mihaly]: will be teller who's coming that we're just looking, we're trying to understand what the state already can regulate, and whether there are barriers to that regulation, and what they are, are they resources or just law, whatever, okay?

[Emilie Krasnow]: Thanks very much. Thanks,

[Rowan Hawthorne]: thank you.

[Emilie Krasnow]: Thanks, good to see you. Alright.

[Marc Mihaly]: Is our esteemed counsel around? I

[Emilie Krasnow]: think we have 09:30 and was he coming? Yeah. Do we have five minutes to

[Marc Mihaly]: Yeah. Take a Why don't we take a break and we'll come back online at approximately 09:30 when our counsel is with us to hear two amendments to seven seventy two.