(CN) - An Oregon fruit orchard broke the law when it included housing costs in the minimum wage that it paid migrant workers, the 9th Circuit ruled Tuesday.
Bear Creek Orchards, in Medford, typically hires about 350 pickers for its annual, month-long harvest peaches and pears. In recent years many of the workers have been recruited from the United States-Mexico border community of San Luis, Ariz., and have stayed in housing provided by the orchard for the duration of the harvest, according to the ruling.
Bear Creek charged $5 to $7 a day for the housing, deducting the cost from workers' paychecks and crediting it toward their minimum wage.
"In many instances, if housing costs were not credited toward the workers' minimum wage, their wage would have been below the lawful minimum wage," the ruling states.
A group of seasonal workers filed a class action against Bear Creek, alleging, among other claims, that its housing costs violated Oregon's minimum wage law and the Migrant and Seasonal Agricultural Worker Protection Act.
Senior U.S. District Judge Owen Panner ruled for the orchard, finding that Bear Creek had properly credited the costs because on-site housing was optional and provided for the workers' benefit.
On appeal, a three-judge panel of the 9th Circuit disagreed, citing evidence that the orchard could not maintain an adequate workforce without offering on-site housing.
The Portland-based federal appeals panel found that a Bear Creek recruiter had stated that the orchard would not be able to hire enough workers to bring in the harvest if it didn't offer housing. One local landlord also testified that Medford's rental and hotel market would probably not accommodate the 350 workers, according to the ruling.
Finding that the on-site housing benefitted the orchard as much as it did the workers, the panel reversed the District Court and ruled that Bear Creek had "violated Oregon law when it credited on-site housing costs toward its employees' minimum wage."
The panel affirmed the District Court's ruling on Bear Creek's cross-appeal, however, agreeing that it was illegal for the orchard to pay workers the day after the harvest ended, instead of on the final day of work as required by state law.