I volunteer with an organization, Stewards of Irreplaceable Lands (SOIL), that helps connect would-be farm interns with farmers who want to host and teach them. It is up to each farmer and intern to decide how the internship is structured, but they all tend to be similar. Often, the intern agrees to work between 30 and 50 hours a week in exchange for room and board, the opportunity to learn how to farm (the amount of actual focus on teaching differs widely), and, usually, some sort of weekly stipend that is often well below minimum wage, and is paid under the table. This was the case for the two internships I completed. The first gave me $25/week; the second a whopping $50. I loved those two apprenticeships, but I also felt under-compensated for my contribution to the farm. I wrote about that in a previous post.
In this post, I explore the case for, costs of, and approach to paying an intern a minimum wage that's paid on the table; that is, with all necessary deductions made and paid to the government. This post was inspired by a recent incident between a British Columbia farmer and her interns, in which the interns took her to court for hundreds of hours in compensation after being dissatisfied with their internship.
As a result, SOIL asked me to cover this topic for those hosts who want to avoid such problems by doing everything on the straight and narrow.
Hence this episode, which consists of an interview I conducted with Frederic Theriault, a partner in Tournesol Farm in Quebec, which pays its interns minimum wage. If you're mainly interested in the nitty gritty of what it costs in time and money to pay an over-the-table minimum wage, the party starts at around minute 15. The stuff before that is interesting, though.
Below I've got a basic summary of what Frederic told me. But first I want to provide links to stuff that's mentioned in the episode.
The Canada Revenue Agency's Online Payroll Deductions Calculator is here. The CRA's links to various tutorials about payroll and such are here. And Frederic's book on crop planning (which I use and endorse) is here.
6 Reasons to pay an intern an over-the-table minimum wage:
1. It protects you from the potential for legal troubles
2. It protects your intern (from injury if you're contributing to WorkSafe; and they can claim Employment Insurance afterward)
3. It might just make your intern more motivated (motivation can be created other ways but decent $$ compensation helps)
4. It will force you to be a better farm manager Minimum wage is expensive for a farmer. Paying ensures you'll be more likely to look for inefficiencies in your business and less likely to take your farm labour for granted.
5. You'll attract more applicants which should raise the potential for finding a good one
6. You may just be able to convince a good intern to stick around as a valuable employee
Figuring out the costs of paying an over-the-table minimum wage:
The wage itself: Frederic says: if you add 15% to whatever the stated wage is, that should give you an idea of the overall cost/hour of labour once you factor in the employer's share of deductions. Usually it's more like 12%. So: a $10/hour wage should end up costing you closer to $11.50/hour with the addition of deductions.
The time requirements: It depends on how you choose to manage your payroll, says Frederic. The financially cheaper way is to keep track of payroll on your own Excel spreadsheets or some payroll software. But it's more time consuming. A more time-efficient option is to pay a service to do it, which starts around $30/month and goes from there. Very likely, your bank offers this service; otherwise, do a web search for 'payroll services'.
The ongoing work of managing payroll mainly relates to keeping track of the deductions you have to make from your employee's wages to contribute to things like Canada Pension Plan and Employment Insurance, and of the contributions you as an employer are required to make. This must be done and submitted monthly, or the CRA gets cranky and charges you extra. There's also some year-end accounting to be done.
The Canada Revenue Agency has lots of tools to help you figure this all out. And they likely offer free, periodic seminars in your region to help get you started on the right foot. See the links above, or, for a series of videos to take you through the process of setting up a payroll, click here.
Yankee friends: I'm sorry this post was so Canucentric. Everyone else: good luck with this!