1

REGION VI BULLETIN 20

WAR FOOD ADMINISTRATION OFFICE OF LABOR
San Francisco, 2, California

October 5, 1943SUBJECT: Services Included Within Definition of Agricultural Labor Contained in Public Law 45

The following is a verbatim copy of Office of Labor Memorandum No. 11, dated September 23, 1943:

For your information there is given below a discussion (prepared at our request by the Solicitor) of the scope and meaning of the term "agricultural labor" as defined in Public Law 45, 78th Congress, approved April 29, 1943.

"Agricultural labor" is defined in Public Law No. 45 (57 Stat. 70) [Section 5 (c) (3)] as follows:

"(3) the term `agricultural labor' includes any services or activities included within the provisions of section 3(f) of the Fair Labor Standards Act of 1938 or section 1426(h) of the Internal Revenue Code."

Section 3(f) of the Fair Labor Standards Act of 1938 (29 U.S.C. 203 f) reads:

"`Agriculture' includes farming in all its branches and among other things includes the cultivation and tillage of the soil, dairying, the production, cultivation, growing, and harvesting of any agricultural or horticultural commodities (including commodities defined as agricultural commodities in section 15(g) of the Agricultural Marketing Act, as amended), the raising of livestock, bees, fur-bearing animals, or poultry, and any practices (including any forestry or lumbering operations) performed by a farmer or on a farm as an incident to or in conjunction with such farming operations, including preparation for market, delivery to storage or to market or to carriers for transportation to market."

Section 1426(h) of the Internal Revenue Code (26 U.S.C. 1426(h) ) reads:

"The term `agricultural labor' includes all services performed—(1) On a farm, in the employ of any person, in connection with cultivating the soil, or in connection with raising or harvesting any agricultural or horticultural commodity, including the raising, shearing, feeding, caring for, training, and management of livestock, bees, poultry, and fur-bearing animals and wildlife.


2

"(2) In the employ of the owner or tenant, or other operator of a farm, in connection with the operation, management, conservation, improvement, or maintenance of such farm and its tools and equipment, or in salvaging timber or clearing land of brush and other debris left by a hurricane, if the major part of such service is performed on a farm.

"(3) In connection with the production or harvesting of maple sirup or maple sugar or any commodity defined as an agricultural commodity in section 15(g) of the Agricultural Marketing Act, as amended, or in connection with the raising or harvesting of mushrooms, or in connection with the hatching of poultry, or in connection with the ginning of cotton, or in connection with the operation or maintenance of ditches, canals, reservoirs, or waterways used exclusively for supplying and storing water for farming purposes.

"(4) In handling, planting, drying, packing, packaging, processing, freezing, grading, storing, or delivering to storage or to market or to a carrier for transportation to market, any agricultural or horticultural commodity; but only if such service is performed as an incident to ordinary farming operations or, in the case of fruits and vegetables, as an incident to the preparation of such fruits or vegetables for market. The provisions of this paragraph shall not be deemed to be applicable with respect to service performed in connection with commercial canning or commercial freezing or in connection with any agricultural or horticultural commodity after its delivery to a terminal market for distribution for consumption.

"As used in this subsection, the term `farm' includes stock, dairy, poultry, fruit, fur-bearing animal, and truck farms, plantations, ranches, nurseries, ranges, greenhouses or other similar structures used primarily for the raising of agricultural or horticultural commodities, and orchards. (Sec. 1426(h), I.R.C. as added by sec. 606, Social Security Act Amendments of 1939.)"

Section 15(g) of the Agricultural Marketing Act, as amended, reads:

"As used in this Act, the term `agricultural commodity' includes . . . crude gum (oleoresin) from a living tree, and the following products as processed by the original producer of the crude gum (oleoresin) from which derived: Gum spirits of turpentine and gum resin, as defined in the Naval Stores Act, approved March 3, 1923. (Sec. 15(g), Act of June 15, 1929, 46 Stat. 18, as added by sec. 3, Act of Mar. 4, 1931, 46 Stat. 1550, 12 U.S.C. 1141j(g).)"

Section 2(c) and (h) of the Naval Stores Act reads:

"(c) `Gum spirits of turpentine' means spirits of turpentine made from gum (oleoresin) from a living tree."


3

"(h) `Gum rosin' means rosin remaining after the distillation of gum spirits of turpentine. (Sec. 2(c), (h), Act of Mar. 3, 1923, 42 Stat. 1435, 7 U.S.C. 92(c) (h).)"

In applying the definition of "agricultural labor" in Public Law No. 45 to activities of placement and recruitment pursuant to that law, consideration must be given to the general purposes for which the appropriation in Public Law No. 45 was made. This is found in section 1 of that law, which reads in part as follows:

"There is hereby appropriated, . . . to be expended . . . for assisting in providing an adequate supply of workers for the production and harvesting of agricultural commodities essential to the prosecution of the war, . . . " (Underlining added)

As above indicated, the basic definitions of agricultural labor incident to Public Law 45 are the definitions in section 1426 (h) of the Internal Revenue Code and section 3(f) of the Fair Labor Standards Act of 1938, which are incorporated in section 5(c) 3 of Public Law 45 by reference. Accordingly, in considering questions involving the meaning of the definitions as used in Public Law 45 it has been the practice to rely to a considerable extent upon the interpretations of the Bureau of Internal Revenue and of the Department of Labor. The applicable published rulings of these agencies appear in Bureau of Internal Revenue Regulations No. 106 and in Department of Labor Interpretative Bulletins Nos. 7 and 14.

So far most of the difficult questions of definition which have been presented to us under Public Law 45 involve the application of subsection (4) of section 1426(h) of the Internal Revenue Code which is restated below for convenient reference. This subsection provides that agricultural labor shall include services performed—

"(4) In handling, planting, drying, packing, packaging, processing, freezing, grading, storing, or delivering to storage or to market or to a carrier for transportation to market, any agricultural or horticultural commodity; but only if such service is performed as an incident to ordinary farming operations or, in the case of fruits and vegetables, as an incident to the preparation of such fruits or vegetables for market. The provisions of this paragraph shall not be deemed to be applicable with respect to services performed in connection with commercial canning or commercial freezing or in connection with any agricultural or horticultural commodity after its delivery to a terminal market for distribution for consumption." (Underlining added)

The standard "incident to ordinary farming operations" is exceedingly vague. Frequently there are overlappings between the functions of harvesting agricultural commodities or preparing "fruits and vegetables for market" and certain of the functions in connection with "commercial canning or commercial freezing". In these circumstances it is unusually difficult to lay down all-comprehensive tests for settling the potential problems of definition that may arise. Most of the close questions of classification


4
of labor involving the use of the standards here discussed can be answered properly only with due regard to the attendant facts.

It may be pointed out, however, that the test generally applied by the Bureau of Internal Revenue in determining whether a particular service is "performed as an incident to ordinary farming operations" is whether the services are of a character ordinarily performed by the employees of a farmer or of a farmers' cooperative organization or group as a prerequisite to the marketing, in its unmanufactured state, of any agricultural or horticultural commodity produced by the farmer or by the farmer-members of the farmers' organization or group. Such services, when performed by the employees of the farmer or such organization or group, with respect to commodities produced by persons other than the farmer or the members of the organization or group, generally are not regarded by the Bureau of Internal Revenue as an incident to ordinary farming operations. (See Bureau of Internal Revenue Regulation 106, p. 23, Sec. 402.208(1) Title 26, Code of Federal Regulations.) This distinction is based upon substantially the same language appearing in the House Report on the definition when it was being considered by the legislature. (H. Rep. 728, 76th Cong., 1939, p. 53).

With respect to services performed "as an incident to the preparation of . . . fruits or vegetables for market", the Bureau has held that, with the exceptions hereinafter noted, the services enumerated in subsection 4 of section 1426(h) are agricultural labor for the purposes of the definition when performed by any one. However, services performed in connection with commercial canning or commercial freezing, or in connection with such fruits and vegetables after delivery to a terminal market for distribution or consumption, may not be qualified as agricultural labor by this test. It should be noted that the expected services must be rendered in the actual handling, planting, drying, etc., and consequently, such services do not, for example, include services performed by stenographers, etc. even though such services may be in connection with such activities. See Bureau of Internal Revenue Reg. 106, p. 26; Sec. 402.208(1) Title 26, Code of Federal Regulations. As distinguished from requirements as to services which qualify as "an incident to ordinary farming operations," therefore, in case of the preparation of fruits and vegetables for market, the services can be performed by anyone and with respect to commodities which he did not produce. This constitutes an important distinction in the Internal Revenue Code definition insofar as labor relating to fruits and vegetables is concerned.

As applied to labor used in canning plants, for instance, the Department of Labor construes Section 3(f) of the Fair Labor Standards Act of 1938 as including some services which the Bureau of Internal Revenue would not regard as within the provisions of Section 1426(h). Under the phrase "any practices performed by a farmer or on a farm as an incident to or in conjunction with such farming operations, including preparation for market," which appears in section 3(f) of the Fair Labor Standards Act of 1938, the Department may consider some operations generally regarded as commercial, such as the operation of canning plants, to be agricultural labor when the plant is owned by the person who produced the commodity. Services on commodities


5
not produced by the farmer are considered by the Department of Labor as not incident to or in conjunction with his farming operations. The Department of Labor has held that in order to classify such labor as agricultural the operations, which are of a character usually commercial, must be only a subordinate part of the farming operations and an operation of a type customarily conducted on that farm. This latter question may be determined by whether most of the employees engaged in the commercial operation are normally employed also in farming operations upon the farm, and whether operations other than farming occupy only a minor portion of the time of the farmer and his employees. Other tests applied by the Department of Labor in determining whether the so-called commercial operations are a subordinate part of the farming operations are the comparative investment in farm and canning plant, the interchangeability of farm labor with labor used in the plant, and the hours worked by the employees in the field and in the plant.

As pointed out in Op. Sol. 4709 of June 10, 1943, however, the definitions of agricultural labor in Public Law 45 are believed to be limited by the provisions of title 1 of that law to the effect, that expenditures may be made by the Administrator only to assist in providing "an adequate supply of workers for the production and harvesting of agricultural commodities essential to the prosecution of the war," which might not include the functions of commercial canning or freezing. Therefore, with respect to labor used in canning plants, undoubtedly the safest course is not to go beyond the scope of the definition in subsection (4) of section 1426(h) of the Internal Revenue Code which does not provide for the classification of services performed in connection with commercial canning or freezing as agricultural labor.

To assist in further clarifying the application of the tests incident to the definitions under discussion, we are setting forth below certain of the questions which have been presented in the operation of the farm labor supply program and the answers which have been given.

Question: Is labor performed in operating a "pea-viner" agricultural labor within the meaning of Public Law 45?

Answer: It is agricultural labor (1) if the service is performed as an incident to preparing peas for market even if the market is a commercial cannery or freezing plant, or (2) if the service is performed as an incident to ordinary farming operations, and provided that the services are performed before the commodity has been delivered to a terminal market for distribution for consumption and not in connection with commercial canning and freezing. However, as indicated below, the mere fact that the peas are to be sold to a commercial cannery does not necessarily require that services performed prior to such sale and delivery must be regarded as "in connection with commercial canning or commercial freezing."

The word "market", which appears in the Internal Revenue Code in connection with the phrase "Preparation . . . for market" has not been defined, but it appears that any


6
market was intended. A commercial cannery or freezing plant could be regarded as a market for the purposes of definition. Therefore, if the pea vining operation took place after the peas had been sold and delivered (either actually or constructively) to a commercial cannery or freezing plant by the farmer, such services would be performed after delivery to market. Such services in that case would, in effect, be in connection with commercial canning or freezing.

Question: Is labor performed on a forestry project in felling, cutting, and trimming timber for coal mines such "agricultural labor?"

Answer: No, since these services are not to be performed on a farm as an incident to or in conjunction with farming operations.

Question: Is labor performed on potato docks in receiving from farmers' trucks, sorting, washing and loading into railroad cars for shipment such "agricultural labor?"

Answer: Yes, if performed before delivery to a terminal market for distribution for consumption and if performed as an incident to preparation of the potatoes for market assuming they are not performed in connection with commercial canning or freezing.

Question: "A" is a fruit grower through whose orchards the railroad line is extended. He has his own siding and packing and loading platform which is on land leased by him from the railroad. The peaches which he grows in his own orchards are boxed by his own hired labor in his own packing shed and by the same labor loaded into refrigerator cars on the siding. In this case the persons who load the peaches on the cars may be the same people who picked and boxed the peaches, or may do nothing else but load peaches, but they are all hired and paid by the grower himself. In your opinion is there any labor involved in this transaction which is not agricultural labor?

Answer: No.

Question: "A" is a grower who sorts and packs the fruit in baskets on his own premises and delivers the packed baskets directly to the refrigerator cars. In this operation the grower, or his hired help, transfer the packed baskets from the truck into the refrigerator car, where they are arranged in the car by employees of the grower's sales agent. In your opinion is there any labor involved in this transaction, including the arranging of the baskets in the refrigerator car, which is not agricultural labor?

Answer: No, if performed before delivery to a terminal market for distribution for consumption and if performed as an incident


7
to preparation of the fruit for market assuming they are not performed in connection with commercial canning or freezing.

Question: In this case "A" is a grower who grades and packs the fruit in boxes on his own promises and delivers the packed boxes to the loading platform of his sales agent. There the boxes are received by employees of the grower's sales agent, which may be a farmers cooperative association of which he is a member, or a private shipping organization, and by these employees arranged in stacks according to size and grade, and by them loaded into refrigerator cars. In your opinion is there any labor involved in this transaction, particularly including these employees of the grower's sales agent who perform the receiving and loading services, which is not agricultural labor?

Answer: Upon the assumption that all of the labor is performed in preparation of the fruit for market, all of the labor may be classified as agricultural. If, however, the arrangement in the cars is entirely for the convenience of the sales agent for some purpose not necessarily incident to preparation for market, such as convenience in computing his commissions, or if the loading platform is in fact "a terminal market for distribution for consumption", some of the services in particularly arranging the fruit in the cars, probably would not be agricultural labor.

Question: Are employees working in agricultural commodity packing houses "agricultural labor?"

Answer: (1) Such services are agricultural labor if performed on such commodities "as an incident to ordinary farming operations" by an employee of a farmer or a farmers' cooperative organization or group in the actual handling, drying, packing, packaging, processing, freezing, grading, storing, or delivering to storage or to market or to a carrier for transportation to market of such commodities if produced by such farmer or members of such farmers organization or group. The same services performed by employees of a farmer or farmers organization or group for persons other than such farmer or members of such farmers organizations or group are not performed "as an incident to ordinary farming operations."

(2) Services are "agricultural labor" if performed on fruits and vegetables by any person in the actual handling, drying, packing, packaging, processing, freezing, grading, storing, or delivering to storage or to market or to a carrier for transportation to market, provided such services are performed as an incident to the preparation of such fruits and vegetables for market. For example, if services in the sorting, grading, or storing of fruits, or in the cleaning of beans, are performed as an incident to their preparation to market, such services are agricultural labor whether performed in the employ of a


8
farmer, a farmers' cooperative, or a commercial handler of such commodities.

(3) But note this important exception. The services described in the answer to this question should not be considered as agricultural labor for the purposes of Public Law 45 if performed in connection with commercial canning or freezing or in connection with any commodity after its delivery to a terminal market for distribution for consumption.