New York lawmakers have included a correction to the overtime tax credit in the budget proposals, which previously excluded some farms from receiving the credit, industry advocates said Wednesday.

Prior to the correction, the law, which mandates farmers pay overtime to workers after a decreasing number of hours, didn’t allow farms that operate through a management company or payroll company to receive the tax credit meant to help offset the increased costs. 

“Delivering the support New York farms need to sustain their operations is vital to maintaining a stable food supply and upholding a cornerstone of our state’s economy. We are committed to getting this done and we will continue advocating for its inclusion in the final state budget,” said state Senator Michelle Hinchey, chair of the chamber’s Agriculture Committee.

While the bill passed both the Senate and Assembly last year, Gov. Kathy Hochul vetoed it because it “creates unintended restrictions that could prevent eligible farmers from claiming” the credit. 

“Clarifying the qualifications needed to receive the farm overtime tax credit was a top priority after our legislation was vetoed last year. I’m very glad that we are advancing this important measure in this year’s budget, on behalf of those farmers who were deemed ineligible,” said Assemblywoman Donna Lupardo, chair of the Assembly Agriculture Committee.

Keith Kimball owns one of those farms that was previously excluded. La Casa de Leche, a dairy farm in Groveland, has multiple entities and rather than paying the employees from each of those businesses, they run their payroll through one that oversees all the others. 

“It’s just an easy way to house that, and then you pay your taxes just once through that entity. The other thing it does is because the farms are close and the milk hauling is involved, if employees work for more than one of those entities, their hours get charge cumulatively,” Kimball said in an interview in January.

If an employee works 30 hours for one and 30 hours for the other, they’re then at 60 hours and qualify for four hours of overtime, Kimball said. Due to the structure of his business, Kimball was not eligible for the tax credit but still had to front the increased labor costs. 

The inclusion of the correction in the budget proposals makes it clear that the viability of New York farms is a priority for legislators, the organization said.

“The pace of regulatory change at both the state and federal levels, rising inflation on nearly all farm inputs, a highly competitive global marketplace, and inability to pass costs due to the price of milk being set by the federal government makes dairy farming uniquely challenging in New York state,” the Northeast Dairy Producers said in a statement provided to Spectrum News 1.  

State Sen. George Borello, R-Sunset Bay, pointed to a report by state Comptroller Tom DiNapoli that said farm labor expenses increased nearly 70% in the last decade.

“This isn’t about fairness – it's about survival for family farms across New York. The bipartisan support for this fix makes it clear: this issue can’t wait. I urge the governor to stand with the Senate and Assembly in delivering this long-overdue relief and ensuring it is included in the final budget,” he said.