Milk with Dignity Code of Conduct

THE MILK WITH DIGNITY CODE OF CONDUCT

2024

Overview

The Milk with Dignity Program (“MD Program”) brings together farmworkers, farmers, corporate buyers and consumers to secure dignified working conditions in dairy supply chains. The MD Program enlists the resources of food industry leaders to provide a premium for milk to Participating Farms that agree to comply with the labor standards in the Milk with Dignity Code of Conduct and Appendices (together, “MD Code” or “Code”). The premium helps to offset farms’ costs of compliance with the Code and supports best practices, including dignified wages.

The MD Program—which is rooted principally in the MD Code—is designed to encourage and support farm compliance to build participatory, fair and dignified workplaces characterized by mutual respect, opn communication and collaborative problem solving. In the MD Program, compliance on the farm is achieved through a unique partnership and problem-solving approach among farmers, farmworkers, and the Milk with Dignity Standards Council (“MDSC”). The MDSC is an independent non-profit whose sole function is oversight of the MD Program—working with farmers and farmworkers to understand, participate in and achieve compliance with the standards in the Code.

Introduction

This Code sets forth the principles and standards to which dairy farms must adhere in order to participate in the MD Program and receive the economic benefits of the MD Program. Farms who maintain compliance with this Code (“Participating Farms”) will receive Milk with Dignity Premium (“MD Premium”) payments from customers of Participating Farms in the MD Program (“Participating Buyers”). When applicable, Participating Buyers will give purchase preference within the Participating Buyer’s supply chain to dairy products that meet their specifications and are supplied by Participating Farms that are in good standing with the MD Program as set forth here. The MD Code will be reviewed periodically and may be amended as circumstances suggest or require.

Part 1: Entry into the MD Program

To enroll in the MD Program, a farm agrees to comply with the standards and procedures set forth in this Code. The owner or operator of a Participating Farm must enroll all dairy farms they own or operate that are eligible to be enrolled in the MD Program.
After enrolling, Participating Farms participate in an MD Program orientation with the MDSC, schedule a farmworker education session and make a plan to undergo an entry/baseline audit conducted by the MDSC. This entry/baseline audit is designed to help determine: a) the Participating Farm’s labor and housing policies and practices at the time of entering the MD Program and b) an individualized plan for each Participating Farm to come into compliance with the MD Code.

Part 2: Farmer & Farmworker Education

A core element of the MD Program is to ensure all participants are informed about the program requirements in order to strengthen communications and problem solving between farmers and farmworkers, providing benefits to both.

Participating Farms will participate in a MD Program orientation session, conducted by representatives of the MD Program, within three months of joining the MD Program.
Participating Farms will work with the MD Program to schedule and promote approximately two (2) hours of MD Program education per year to every Qualifying Worker (“QW”), conducted by representatives of the MD Program. QWs will be paid full wages for the time spent in such education sessions.
Participating Farms will provide representatives of the MD Program with reasonable access to their property for the purposes of carrying out MD Program activities, including but not limited to communicating with QWs who live on the farm premises, so long as those visitors do not directly interfere with the work of the Participating Farm and adhere to the farm’s biosecurity policies.
Participating Farms will distribute a copy of the Milk with Dignity Rights & Responsibilities Handbook and any additional MD Program materials provided by the MDSC to each of its QWs when the Participating Farm first joins the MD Program, to all new QWs at the time of their hire and on occasion when materials are updated.
Participating Farms will post this Code and a description of the MD Program provided by representatives of the MD Program in a prominent place both at the worksite and in any housing units provided to QWs by or on behalf of the Participating Farm.

Part 3: Employment Practices & Minimum Requirements For Participating Farms

Participating Farms are required to abide by all applicable laws, codes, and regulations, including this Code, regarding wages and benefits, working hours, equal opportunity, housing, and employee safety and health. Further, Participating Farms will adhere to the following employment and workplace practices:

Milk with Dignity Premium

Participating Farms will receive support from Participating Buyers to achieve compliance with the MD Program in the form of purchase preference (when applicable) and the MD Premium. All Participating Farms who are in good standing with the MD Program will receive MD Premium on the dairy products they sell to Participating Buyers; these funds are intended to help offset costs of compliance with the MD Program.

Participating Farms will use MD Premium funds they receive to comply with the requirements of the MD Program.
Participating Farms will participate in, and comply with, MD Program Premium pass-through requirements and pass through to each Bonus Eligible QW (“Bonus Eligible QW”) on their farms the appropriate premium payments received under the MD Program. The term “appropriate premium payments” means the QW’s portion of the MD premium paid by a Participating Buyer as part of the MD Program.
Participating Farms will pass through the appropriate premium payments on at least a monthly basis and will pay each Bonus Eligible QW their MD Premium Pass-Through in accordance with Appendix B.
These pass-through payments will be listed as a line item bonus on each Bonus Eligible QW’s paystub clearly marked as “Milk with Dignity Bonus/Bono Leche con Dignidad”.

Wages and Related Issues

Participating Farms will record all compensable hours and will keep accurate hours through a system (e.g., time clock punch, card swipe or other method) in which QWs control their time cards or other time registration device used by the Participating Farm.
Participating Farms will pay QWs for all time spent engaged in work-related activities.
Participating Farms will hire all QWs as employees.
Participating Farms will pay wages and benefits directly to all QWs, without intermediaries, except when a QW has authorized the delivery of their unclaimed paycheck to a third party.
Participating Farms will provide all QWs with a written pay schedule upon hire, which will guarantee payment of wages at least twice per month. Wages will be considered unpaid if they are not made available to a QW within one (1) business day of the date specified in the payment schedule.
Participating Farms will provide QWs with pay slips that include all information necessary to permit the QW to determine whether his or her wages have been accurately calculated and provided for each pay period.
During their first year of Program enrollment, Participating Farms will create and implement a time bound plan to pay all QWs no less than the prevailing minimum wage (federal, state, or municipal) of the jurisdiction in which their farms are located, notwithstanding any provisions that may exempt agricultural workers. In subsequent years of Program participation, if the prevailing minimum wage increases, Participating Farms must ensure compliance by the date that the new wage level takes effect.
Participating Farms will not retain or withhold any sums from the pay of a QW without the informed, signed consent of the QW, unless applicable law requires such withholding.
Participating Farms will pay any QW who works on certain “Paid Holidays” (see Appendix A) an hourly wage of not less than 1.5 times the QW’s regular hourly wage.

Health and Safety

Participating Farms will provide a safe and healthy working environment to prevent accidents and injury to health arising out of, linked with, or occurring in the course of work or as a result of the operations of their farm.
Participating Farms, working with representatives of the MD Program, will develop and implement a Worker Health and Safety process through which QWs are able to offer the Participating Farms their input and perspective on health and safety issues in a regular and structured manner.
Participating Farms will develop and implement health and safety policies and practices, in accordance with manufacturer’s instructions and all laws and regulations, when applicable, for: a) maintenance and operation of farm machinery; b) avoiding repetitive stress and other musculoskeletal disorders; c) safe handling and storage of needles, chemicals, potentially hazardous materials, electrical equipment, manure, and grain; d) safe animal handling; e) safe maintenance of farm structures; f) proper ventilation; g) extreme temperatures; h) safe staffing; i) communication of emergency procedures and protocols; and j) proactive information sharing about potential workplace risks and hazards, including by providing access to Safety Data Sheets or similar information and by providing applicable training.
Participating Farms, at no cost to QWs, will provide all QWs with the appropriate personal protective equipment for completing work assignments safely.
As part of a QW’s orientation, and as soon as possible for any previously hired worker after joining the MD Program, a Participating Farm will provide paid training on the safe and healthy performance of the QW’s job duties.
QWs may not be disciplined for stopping the performance of a work task that puts their health or safety in serious and immediate danger.
Participating Farms will keep accurate records of all work-related injuries and illnesses suffered by QWs that require any medical treatment, including first-aid, or that lead to one or more days away from work, the need for work restrictions such as light duty, or transfer to different work tasks. Participating Farms will provide QWs and the MDSC access to these records upon request.
Each Participating Farm will obtain and provide access to workers’ compensation insurance that covers all QWs in their employ in accordance with applicable law. If such workers’ compensation insurance is not required by applicable law, the Participating Farm will communicate a policy to QWs demonstrating how the Participating Farm will cover all medical care costs associated with any work-related injury or illness sustained by a QW unless coverage is financially impracticable.
Participating Farms will provide each QW with paid sick leave in an amount equal to no less than three (3) days per year in 2017 and five (5) days per year beginning on January 1, 2018. Sick leave is available from the first day of employment. Full sick days taken off due to injury or illness will be paid at a rate equivalent to the full length of the QW’s regularly scheduled workday that they would have worked, but for the illness or injury. If a QW only rests for a portion of a work day due to illness or injury, the Participating Farm will pay the QW for the number of hours of their workday for which they rested, which may result in use of a partial sick day and in partial sick days remaining available for a QW’s future use.
Each Participating Farm will comply with all state and federal Family and Medical Leave Acts, notwithstanding any provisions that otherwise exempt agricultural workers, workers based on the size of their worksite, or the Participating Farm.
In order to reduce repetitive stress and other work-related injuries, Participating Farms will: a) provide regular training and information; b) install and maintain cushioned matting on floors; c) encourage workers to take short, periodic breaks and rotate jobs whenever possible; d) make reasonable accommodations to work stations for ergonomic reasons; and e) take other reasonable measures to reduce the risk of work-related injuries and illnesses.

Schedules, Rest, and Leisure

Participating Farms will develop and implement plans and procedures to ensure that QWs have sufficient breaks during the day, including sufficient time for three meals a day.
QWs have the right to at least ten (10) consecutive hours off from work within each twenty-four (24) hour period.
QWs have the right to twenty-four (24) consecutive hours off from work within each seven-day period as part of their weekly schedule.
Participating Farms will provide and grant access to no fewer than five (5) paid vacation days per year to QWs. Participating Farms will pay vacation days at the equivalent rate of the QW’s regular work day that they would have worked if they were not using vacation leave. Part-time and seasonal workers will receive vacation days on a prorated basis. If a QW does not use their paid vacation days during the year, the Participating Farm will pay the QW for their unused vacation days.
Upon request, Participating Farms will provide QWs reasonable amounts of unpaid time off from work to meet their basic human needs such as, but not limited to, going to the doctor or dentist and attending religious services.

Housing

If housing is provided to a QW by a Participating Farm it must a) be voluntary; b) be delivered in clean working order; c) comply with all applicable housing, zoning, and building codes; d) receive proper and timely maintenance, without undue delay, to ensure ongoing compliance, and e) not reduce the QW’s net wages below the prevailing minimum wage (federal, state, or municipal, notwithstanding any provisions that may exempt agricultural workers) of the jurisdiction in which the farm is located, in accordance with Appendix B.
QWs provided housing by or on behalf of a Participating Farm will have all rights afforded to tenants under the prevailing state, federal or municipal standards (notwithstanding any provisions that may exempt farmworkers or live-in employees), including but not limited to privacy in their dwellings.
Participating Farms will, on QWs’ request, install internet service in housing provided to QWs when such services are available. Farms may request that QWs reimburse the actual cost of internet services. Such reimbursements must comply with the MD Code and applicable law but will not be considered a wage deduction for purposes of Paragraph 37(e), above.
QWs provided housing by or on behalf of a Participating Farm and whose employment is discontinued by the Participating Farm will be provided at least fourteen (14) days’ notice from date of separation to vacate the premises, except where termination is to remedy an Article I Violation of this Code.
All housing being provided to QWs must have doors to the sleeping area that close for adequate privacy.
All housing provided to QWs must provide adequate protection from potential health or safety hazards, including but not limited to extreme temperatures, exposure to harmful hazards and dangerous chemicals, fields sprayed with pesticides, animals, manure and manure pits, or animal health product storage.
All housing provided to QWs must provide working clothes washer(s) and dryer(s) sufficient and available for the personal use of QWs and that are not required for other uses (e.g., milking towels).

Other Conditions of Employment

Participating Farms will not deny or otherwise restrict or interfere with a QW’s freedom to come and go from the Participating Farm’s premises or any housing provided by or on behalf of the Participating Farm.
Participating Farms will not deny or otherwise restrict or interfere with a QW’s right to receive visitors on the Participating Farm’s premises or at any housing provided by or on behalf of the Participating Farm so long as those visitors do not directly interfere with the work of the Participating Farm and adhere to the farm’s biosecurity policies.
Participating Farms will not hold QWs’ original identification documents and will not charge QWs fees or costs for applications, deposits, recruitment or other pre-employment fees or costs.
No Participating Farm, nor anyone working for or acting on the Participating Farm’s behalf, will subject a QW to violence, harassment, abuse, threat or discrimination.
Participating Farms will provide equal opportunity for advancement and will regularly communicate these opportunities to QWs.
QWs may—without facing retaliation—identify and recommend improvements, in addition to those outlined in the Code, regarding farm labor health and safety matters, scheduling, staffing, production, housing, and any other subject related to working conditions to Participating Farms.
Participating Farms will not discharge or discipline a QW except for just cause and in accordance with progressive disciplinary measures.
Participating Farms will provide QWs with a copy of their employment contract and/or farm personnel policies, including notice of terms and conditions of employment such as wages, hours and benefits, at the time of hire. Participating Farms will provide these documents in QWs’ native languages.
Participating Farms will make reasonable efforts to ensure QWs understand all farm policies and job requirements, including but not limited to providing information in each QW’s native language.
Participating Farms will not reduce the wages, housing or benefits provided to any QW in their employ in anticipation of or upon entering the MD Program.

Part 4: Transparency & Third Party Auditing

The MDSC is a resource for farmworkers and farmers whose sole function is to work with farmers and farmworkers to understand, participate in and achieve compliance with the labor standards in the Code.

Participating Farms will cooperate with the MDSC, including but not limited to providing the MDSC access to the farm premises, farm personnel and the necessary business records to conduct annual audits and verify compliance with the Code and any Corrective Action Plans or Complaint Resolutions.
Participating Farms will verify and make transparent their employment practices to the MDSC, including the MD Premium Pass-Through of the appropriate premium payments of MD Premium to Bonus Eligible QWs.
Participating Farms will cooperate with complaint investigation and resolution procedures of the MDSC and designate a primary contact person for matters related to the MD Program on each Participating Farm.
Participating Farms will not attempt to coach QWs, managers, supervisors, or any farm employee before or during the audit or complaint resolution process, nor will they engage in other conduct designed to influence or prevent the MDSC’s monitoring efforts from gathering an accurate assessment of the actual practices and work environment on the farm. Additional details for audit and CAP procedures are described in Appendix C.

Part 5: Complaint Mechanism & Protection from Retaliation

Participating Farms will inform QWs of their right to use the MD Worker Support Line and the complaint resolution process overseen by the MDSC. Participating Farms will not attempt in any way to impede the MDSC from investigating a complaint, and will not engage in or permit retaliation in any form against a QW for seeking to file or having filed a complaint, or for seeking to participate in or having participated in MD Program education, audit or other activities. Additional details for complaint investigation and resolution procedures are described in Appendix C.

Part 6: Violations, Corrective Action Plans & Complaint Resolution

A. Types of Violations

In the MD Program, Code compliance violations are divided into three categories– “Article I Violations,” “Article II Violations” and “Article III Violations”—according to the severity of the violation and the resulting consequence(s) of the violation.

Article I Violations:

The use of forced labor of any kind.
The use of systemic unlawful child labor, as defined by applicable law in the jurisdiction in which the farm is located.
Use or threat of physical violence against a QW.
Sexual harassment of a QW that involves physical contact.
Retaliation against a QW for making or attempting to make a complaint under the MD Code, for participating in MD Program education, audit or other activities, or for seeking any improvement or change in working or housing conditions, including but not limited to those conditions covered by the Code, regardless of whether it is sought through the MDSC, in direct communication with a Participating Farm, or through other communication.

Article II Violations:

Racial, national origin, religious, gender identity, or sexual orientation discrimination and/or harassment against a QW not involving violence or the threat of violence.
Sexual harassment not involving physical contact against a QW.
Negligent endangerment of a QW’s health or safety.
Failure to promptly correct urgent housing violations that pose immediate dangers to QW’s health and safety.
Failure to use MD Premium funds as necessary to comply with the requirements of the Code, including but not limited to paying all QWs no less than the prevailing minimum wage (federal, state, or municipal).
Failure to pass- through or otherwise provide to all Bonus Eligible QWs the appropriate MD Premium payments.
Interference, or failure to cooperate fully, with the MD Program’s education, monitoring and auditing procedures.
Retention, withholding, or undue delay in the payment of wages due to a QW.
Failure to afford a QW at least twenty-four (24) consecutive hours of rest per workweek.
Failure to allow a QW to have or receive visitors during the QW’s non-work time.
Failure to afford QWs reasonable unpaid leave to address their basic human needs.
Failure to provide QWs reasonable access to potable drinking water, toilets and other hygiene facilities on the farm or at the work site.
Actions or statements that do, or could reasonably, intimidate or discourage QWs from participating in the MD Program or from making requests or suggestions relating to working and housing conditions.
Disciplining or discharging QWs without just cause or outside of progressive disciplinary measures.
Significant failure to comply with an agreed upon Corrective Action Plan or Complaint Resolution.

Article III Violations:

Any violation of the Code not listed under Articles I or II will be an Article III violation.

B. Remedying Violations

A Participating Farm will address to the satisfaction of the MDSC each MD Program violation identified in the course of an audit through an MDSC-approved Corrective Action Plan.
A Participating Farm will address to the satisfaction of the MDSC each complaint brought to its attention by the MDSC or a QW through an MDSC-approved Complaint Resolution.
A Participating Farm may appeal: a) any proposed Corrective Action Plan (“CAP”) or part thereof; b) any proposed Complaint Resolution (“CR”) or part thereof; or c) any notice of suspension from the MD Program. All findings of fact made by the MDSC underlying the proposed action being appealed are final and binding unless an arbitrator finds them to be clearly erroneous. The procedure for a Participating Farm to file an appeal is defined in Appendix C.

Part 7: Consequences of Violations & Suspensions

Article I Violations are “zero tolerance” violations. Article I Violations (a) or (b) will result in automatic suspension of the Participating Farm from the MD Program for the designated time period defined in Appendix C. Article I Violations (c) or (d) will result in automatic suspension of the Participating Farm from the MD Program unless the offending party is immediately terminated and removed from the farm premises upon determination of the violation by the MDSC. If the offending party in an Article I Violation (c) or (d) is the owner of the Participating Farm him or herself, the Participating Farm will be automatically suspended from the MD Program for the designated time period defined in Appendix C. Article I Violation (e) will result in automatic suspension of the Participating Farm from the MD Program unless the Participating Farm implements remedial actions designated by the MDSC to address the retaliation and any underlying Code violation within a timeframe set by the MDSC.
Article II Violations require specified remedial action by the Participating Farm within a timeframe designated by the MDSC to avoid probation and/or suspension from the MD Program for the designated time period defined in Appendix C. Article III violations do not trigger specified remedial action, but the Corrective Action Plan developed by the MDSC and Participating Farm to address Article III violations may include one or more specific remedies with designated timeframes for full compliance to avoid probation and/or suspension from the MD Program for the designated time period defined in Appendix C. If a Participating Farm is suspended under the MD Code, all Participating Farms belonging to or operated by that Participating Farm’s owner will also be suspended for the designated time period.
A farm seeking reentry to the MD Program, whether following a suspension or voluntary withdrawal, must, prior to resuming its status as a Participating Farm, pass a reentry audit conducted by the MDSC.

APPENDIX A:

MD CODE OF CONDUCT DEFINITIONS

Key Terms: For purposes of the MD Code, the terms listed below will have the following meanings:

The Milk with Dignity Code of Conduct and its appendices (herein “MD Code” or “Code”) is the document that establishes the workplace standards for all farms participating in the MD Program.
The Milk with Dignity Standards Council (“MDSC”) means the organization designated by Migrant Justice (“MJ”) to be the third-party monitor and auditor of the MD Program. The MDSC conducts MD Code compliance audits of Participating Farms, operates the MD Program’s Worker Support Line, oversees the complaint resolution process, and issues Corrective Action Plans (“CAPs”) and Complaint Resolutions (“CRs”). Aside from “zero tolerance” (Article I) violations of this Code, the MDSC works with Participating Farms to define reasonable amounts of time to address Code and MD Program compliance issues.
“Corrective Action Plan” (“CAP”) shall mean a plan specifying actions necessary to bring a Participating Farm into compliance with this Code.
“Dairy Farm” shall mean any farm that sells milk from cows, notwithstanding any definition of “dairy farm” that may be set forth under federal or state law.
“Just cause” for disciplinary action means consideration and application of the following factors:
1. Notice: adequate warning to a QW of the consequences of his/her conduct.
2. Clear and Reasonable Rules or Orders: clear rules of conduct, including consequences of violations, that are reasonably related to efficient and safe operations, goals, and objectives of the farm.
3. Investigation: discipline only after investigation of any alleged incidents subject to discipline and a determination that there is substantial evidence to conclude that the QW violated a rule of which the QW had been aware.
4. Equal Treatment: disciplinary system that is uniform for all QWs.
5. Appropriate Discipline/Penalty: discipline is proportional to the seriousness of the violation.
“MD Premium” means the monetary premium paid by Participating Buyers to Participating Farms per unit of milk or dairy product in order to support the Participating Farm’s compliance with the MD Code.
“Negligent endangerment” of a QW’s health or safety on a Participating Farm shall include but not be limited to: 1) any chemical poisoning of a QW; 2) two or more equipment failures in one year that harm QW(s); 3) injuries to QW(s) resulting from recurrent understaffing; 4) repeat failure to provide proper health and safety equipment; and 5) failure to allow QWs access to immediate health care for work related injuries or illnesses.
“Paid Holidays” will be defined as Thanksgiving, December 24 and 25, or as otherwise determined through mutual agreement between a PF and a QW, provided that the number of days is not less than three per year.”.
“Participating Buyers” means wholesalers, distributors, retailers, processors, and/or manufacturers that purchase milk or dairy components, either directly or indirectly, from Participating Farms in the MD Program and who pay a designated MD Premium to those Participating Farms.
“Participating Farm” or “Participating Farmer” means any Dairy Farm or Dairy Farmer who agrees to comply with the MD Code and is in good standing with the MD Program as determined by the Milk with Dignity Standards Council.
“Bonus Eligible QW” means a QW who works an average of 30 or more hours weekly and earns a net wage, after any health insurance- or housing-related deductions, of less than the Livable Wage for a “Rural Single Person in the “Basic Needs Budget Wages,” as determined biennially by the Vermont Legislative Joint Fiscal Office or any successor to such Office.
“Qualifying Work” means any of the following tasks performed by a worker on a Participating Farm: (i) milking cows by hand and/or using milking machinery; (ii) flushing, brushing, and/or scraping refuse from walls and floors to minimize infestation; (iii) cleaning and sterilizing milk containers and equipment, and tending pumps to clean milk pipelines; (iv) feeding and tending to feed storage; or (v) any other manual labor directly related to care of animals or milk production.
“Qualifying Worker” means a non-supervisory worker who: 1) is not a relative of the Participating Farm owner for whom he or she works; and 2) performs “Qualifying Work” for any period of time.
A “sick day” is 24 consecutive hours of rest from the regular work schedule. A worker may also take a partial sick day, defined as the number of hours a worker is absent from their shift in a day due to illness or injury.
“Systemic unlawful child labor”: Use of unlawful child labor will be considered systemic if either (a) three or more QWs or (b) greater than fifty percent of the QWs, whichever is lesser, are children working in violation of any applicable child labor law.
“Use or threat of physical violence against a QW” includes, but is not limited to, the display of weapons of any kind (including firearms, knives, bats, etc.) at any point for the explicit or implicit purpose of intimidating a QW.
“Working Group” means a group, chaired by MJ, of farmworkers and Participating Farms that meets periodically to evaluate MD Program implementation and to share recommendations concerning the MD Program based on their experience.
“Written notice” will include email.

APPENDIX B

MD PREMIUM

I. MD Premium

Participating Buyers pay Participating Farms the specified MD Premium amount per cwt. in addition to whatever price they pay per cwt. for fluid milk and/or dairy components they purchase from Participating Farms either directly or indirectly through a third party. Participating Buyers will make MD Premium payments to the Participating Farms from which they purchase.

II, MD Premium Pass-Through (Bonus)

Within no fewer than 15 days of a Participating Farm receiving its first MD Premium payment, the farm will begin passing- through the appropriate premium payments of the MD Premium to every Bonus Eligible QW in their employ, and will continue passing-through the appropriate Bonus payments on at least a monthly basis for every month the QW remains Bonus eligible and in their employ, and so long as the farm remains enrolled in the MD Program. These pass-through payments must be listed as a line item bonus on each Bonus Eligible QW’s paystub clearly marked as “MD Bonus/Bono LcD” or as “Milk with Dignity/Leche con Dignidad”. MD Bonus payments may not be included in determining compliance with minimum wage requirements.
The appropriate Bonus payments of the MD Premium that must be passed through each month to every Bonus Eligible QW will be made in accordance with the MD Code (including Appendices) and with the Milk with Dignity Premium Worksheet (“MD Premium Worksheet”).
Participating Farms will provide QWs with at least the following information on pay stubs or similar documentation of wages and hours:
1. Pay period
2. Hours worked
3. Wage per hour
4. MD Premium Pass-Through, as a separate line item labeled “MD Bonus”
5. Other bonuses, if applicable
6. Gross earnings
7. Any withholdings or itemized deductions
8. Net wage
Upon request, Participating Farms will make available to the MDSC the following information for each QW in their employ:
1. Documentation of MD Premium funds received from Participating Buyers and passed through to QWs;
2. Total hours worked by the QW in a given pay period;
3. Hourly wage (i.e., gross wage, not counting any non-cash benefits or deductions); and
4. Whether the QW is provided housing and/or health insurance from the Participating Farm.
In the event the MDSC finds that a Participating Farm is not in compliance with the MD Program minimum wage requirements, and that Participating Farm fails to define and implement a time bound plan to comply with the prevailing minimum wage, the MDSC may require the Participating Farm to adopt an alternative MD Premium Pass-Through system as part of a CAP or CR.

III. MD Premium Pass-Through (Bonus) Protocols

Payroll audits to verify proper payment of the MD Premium Pass-Through (Bonus) are required for Participating Farms. Participating Farms must perform the following in order to be in compliance with the Milk with Dignity Program:

Documentation of all MD Premium Pass-Through (Bonus) payments that are received either directly or indirectly from Participating Buyers:
1. Participating Farms will complete the Farm MD Premium Reporting Template and send a copy to the MDSC monthly, or else ensure that any intermediary entity, such as a dairy cooperative, through which their milk is sold to Participating Buyers completes these steps, by the 15th of each month, for the previous month’s sales.
2. Participating Farms will work with the MDSC to ensure that MD Premium payment remittances include the necessary information to complete the applicable Farm or Processor MD Reporting Template, i.e., name of payor (buyer/customer), name of Participating Buyer to which that payment was attributed, total MD Premium amount received, date payment received, check number or number used to identify the transaction.
Participating Farms will be prepared to provide the following during the MDSC audit process:
1. Procedures for documenting allocation and payment of the MD Premium Pass-Through (Bonus);
2. Documentation of payrolls, MD Premium Pass-Through (Bonus) payments to all QWs eligible to receive them, and copies of payroll stubs to assist with the audit of the MD Premium Pass-Through (Bonus) payment distributions to QWs.

APPENDIX C

PROCEDURES FOR CORRECTIVE ACTION PLANS, COMPLAINT RESOLUTIONS, AND APPEALS

PART I: AUDIT AND CORRECTIVE ACTION PLAN PROCEDURES

Participating Farms will be audited by the MDSC at least once each year, MDSC resources permitting.
The first audit upon entry into the MD Program will be deemed a “baseline audit” to determine the Participating Farm’s employment practices at the time of entry into the MD Program and its overall capacity to comply with the MD Code.
If a Participating Farm does not allow or impedes an audit (baseline or otherwise), the MDSC may immediately place the Participating Farm on probation. Additionally, if the MDSC finds any evidence of Article I violations associated with the Participating Farm’s operations at the time of an audit, the MDSC may immediately suspend the Participating Farm and inform Participating Buyers of the suspension.
If the MDSC finds, through an audit, a credible claim of forced labor or, systemic unlawful child labor, the matter will be promptly referred to the appropriate law enforcement and/or other governmental investigative agency. Such referral will not preclude i) the MDSC from further investigation of the matter, or ii) additional actions to resolve the matter, including suspension of the Participating Farm, if appropriate.
In the event an audit identifies any violations of the Article II or Article III standards in the Code, the MDSC will provide the Participating Farm with written notice, followed by a proposed Corrective Action Plan (CAP) that addresses each identified violation and potential risk of Code violation. During the development of a CAP, the Participating Farm may also provide MDSC with the Participating Farm's proposed CAP measures for consideration To remedy violations of the Code, a CAP may require actions not specifically articulated in the Code. A CAP may also address breaches or alleged breaches of the Milk with Dignity Confidentiality and Non-Disparagement Agreement. During the development of a CAP, the Participating Farm may also provide MDSC with the Participating Farm's proposed CAP measures for consideration.
The MDSC and the Participating Farm will attempt to agree upon a mutually acceptable CAP. If they are unable to reach agreement, the MDSC will have final say regarding the content of the CAP (including findings of fact, determinations of violations, and required corrective actions) and will send the Participating Farm a copy of the CAP with a statement that the CAP is final.
A CAP will be considered approved when a) it has been agreed upon by the MDSC and the Participating Farm, or, b) if the CAP has not been agreed upon by the MDSC and the Participating Farm, when i) the CAP has been adopted by an arbiter following an appeal pursuant to Part VIII, ii) the CAP proposed by the MDSC has not been appealed by the Participating Farm within 14 calendar days of written notice from the MDSC to the Participating Farm that the CAP proposed by the MDSC is final, or iii) the Participating Farm has already exhausted its available appeals.
The MDSC may require a remedial audit to verify compliance with the CAP. In the event the MDSC’s remedial audit finds that the Participating Farm remains out of compliance with the CAP or the Code, the Participating Farm will be given an additional 30 days, or other period to be specified by the MDSC, to cure all outstanding identified non-compliance. During that period of time, however, the MDSC will inform Participating Buyers that the Participating Farm is on probation, and that it may be necessary to begin arranging for alternative source(s) of supply.
Before the end of the probationary period, the MDSC will conduct another remedial audit to verify compliance with the CAP and any additional non-compliance identified during the MDSC’s first remedial audit. If this second remedial audit finds that the Participating Farm remains out of compliance with the CAP or the Code, the Participating Farm will be suspended. If, however, during the second remedial audit, the MDSC determines that corrective actions taken by the Participating Farm are likely to achieve compliance within a reasonable period of time, the MDSC may, in its discretion, extend the probationary period to allow the Participating Farm to demonstrate full compliance to the satisfaction of the MDSC.
During or after any period of suspension, a Participating Farm seeking reentry to the MD must schedule a reentry audit to establish to the satisfaction of the MDSC that it has remedied all outstanding identified deficiencies and met the other requirements for reentry into the MD. A Participating Farm cannot be readmitted to the MD Program before it has both passed the reentry audit andor served out the period of suspension, whichever occurs later.

PART II: COMPLAINT RESOLUTION PROCEDURES

1. All complaints that contain statements or facts that, if true, would constitute a violation of the law or the Code, must be investigated. Complainants and witnesses in the MD Program may be confidential, but not anonymous. Requests for confidentiality by complainants and witnesses made during complaint intake or investigation will be honored by Migrant Justice, the MDSC, and Participating Farms. The failure of a Participating Farm to maintain the confidentiality of a complainant or witness who has requested confidentiality may, if the MDSC determines that the circumstances warrant it, be considered retaliation in violation of the Code. If a Participating Farm fails to allow or impedes an investigation by the MDSC, the MDSC shall place the Participating Farm on probation and may in extraordinary circumstances suspend the Participating Farm.

2. All complaints under the Code received by Participating Farms, whether through reports to farm owners, supervisors or the farm’s own complaint line, must be reported to MDSC within two working days, by phone, text message, or email. Migrant Justice will report any complaints it receives from a QW under the MD Program to the MDSC within two business days. Similarly, the MDSC will report all complaints it receives to the Participating Farm’s designated complaint contact person within two working days, unless the designated complaint person at the Participating Farm at issue is the subject of the complaint or has some other direct conflict of interest with the complaint (e.g. the complaint is about the farm owner’s son and the farm owner is the designated complaint person).

3. If the MDSC finds a credible claim of forced labor or systemic unlawful child labor, the matter will be promptly referred to the appropriate law enforcement and/or other governmental investigative agency. Such referral will not preclude a) the MDSC from further investigation of the matter, or b) additional actions to resolve the matter, including suspension of the Participating Farm, if appropriate.

4. In all matters other than the possible existence of forced or systemic unlawful child labor, the MDSC will be solely responsible for determining the appropriate procedures for investigations of complaints received through its Support Line or audits, from Participating Farms, or from Migrant Justice.

5. Following the procedures established by the MDSC, Participating Farms will cooperate fully and in a timely manner with all MDSC complaint investigations, including providing the MDSC with access to relevant records, locations, workers and supervisors for interviews and observations on company property, during normal work hours. The MDSC will, when not precluded from doing so by the nature of the complaint being investigated, consult with the Participating Farm in an effort to ensure that the MDSC investigations are conducted with as little disruption to the Participating Farm’s operation as is possible under the circumstances.

6. The Participating Farm’s complaint contact person will immediately share with the MDSC all records and witness accounts obtained or reviewed by the Participating Farm in the course of any investigation(s) it conducts.

7. The MDSC will, to the extent consistent with the nature of the complaint being investigated, share with the Participating Farm’s designated complaint contact person all witness accounts and observations of conditions.

8. Upon conclusion of a complaint investigation, all findings will be discussed by the MDSC with the Participating Farm’s complaint contact person and, if desired, with the Participating Farm.

9. The MDSC is ultimately responsible for making a final determination of the facts established by any complaint investigation and reaching a final conclusion as to whether those facts constitute a violation of one or more provisions of the Code or any approved Corrective Action Plan or Complaint Resolution with the Participating Farm.

10. When the MDSC has determined that Code violations have been established, complaint resolution measures will be taken.

11. A Complaint Resolution shall be considered approved when a) it has been agreed upon by the MDSC and the Participating Farm, or, b) if the resolution has not been agreed upon by the MDSC and the Participating Farm, when i) the resolution has been adopted by an arbiter following an appeal under Part V, ii) the resolution proposed by the MDSC has not been appealed by the Participating Farm within the timeframe established in Part Vor iii) the Participating Farm has already exhausted its available appeals.

12. Failure to comply with an approved complaint resolution may result in a Participating Farm being placed on probation and, if compliance is not achieved during the probation period, suspension from the MD Program.

PART III: SUSPENSIONS OF PARTICIPATING FARMS

If a Participating Farm is suspended from the MD Program, the duration of the suspension shall be for the designated time period defined as follows:

For a Participating Farm’s first suspension from the MD Program, 30 days from the effective date of the suspension or until the Participating Farm can demonstrate to the satisfaction of the MDSC that it has remedied all outstanding violations, whichever occurs later;
For a Participating Farm’s second suspension from the MD Program, 90 days from the effective date of the suspension or until the Participating Farm can demonstrate to the satisfaction of the MDSC that it has remedied all outstanding violations, whichever occurs later; and
For a Participating Farm’s third or subsequent suspension from the MD Program, one calendar year from the effective date of the suspension or until the Participating Farm can demonstrate to the satisfaction of the MDSC that it has remedied all outstanding violations, whichever occurs later.

If a Participating Farm is suspended under the MD Code, all Participating Farms belonging to or operated by that Participating Farm’s owner, operator, person, or other legal entity in control will also be suspended for the designated time period. The MD Premium floor or ceiling amount applicable to a Participating Farm that has been reinstated to good standing after a suspension will account for the farms’ ineligibility for the MD Premium during the suspension.

PART IV: PERSONNEL OF PARTICIPATING FARMS

1. If a worker, manager or other supervisory person is found to have committed an Article I Violation, he or she must be fired within twenty-four (24) hours of confirmation of the incident by the MDSC, and will not be eligible to work for any Participating Farm in the MD Program for a period of five years.

2. A second Article I Violation will result in a lifetime ban from working for any Participating Farm.

3. If a worker, manager or other supervisory person is found to have committed a pattern of Article II and III Violations, the MDSC may require his or her termination, suspension or other discipline as a remedial measure as part of a Corrective Action Plan or Complaint Resolution. In such an instance, that personnel will be ineligible to work for any Participating Farm for a period determined by the MDSC depending on the circumstances that will be no less than 90 days and may be up to a lifetime ban from working on Participating Farms.

4. In addition to the suspensions defined above, any fired personnel will be required to complete such training as the MDSC may deem appropriate before beginning to work again for any Participating Farm.

5. The MDSC will make available to Participating Farms a list of personnel who are suspended from employment on MD Program Participating Farms. Once a person on that list has regained eligibility for employment on MD Program farms, the MDSC shall promptly remove his or her name from the list of suspended personnel.

6. The MDSC will maintain a list of approved vendors qualified to provide the appropriate training that must be completed by any person fired or suspended from the MD Program for having violated any provision of the Code.

PART V: APPEAL PROCESS

Filing an Appeal

1. A Participating Farm may appeal: a) any proposed Corrective Action Plan (CAP) or part thereof; b) any proposed Complaint Resolution (CR) or part thereof; c) any notice of suspension from the MD Program; or d) the MDSC’s resolution of any alleged breach of, or other dispute arising under, the Milk with Dignity Confidentiality and Non-Disparagement Agreement. All findings of fact made by the MDSC underlying the proposed action being appealed are final and binding unless an arbitrator finds them to be clearly erroneous.

A proposed CAP or any part thereof may be appealed within fourteen (14) calendar days from the date the MDSC sends the Participating Farm written notice and a copy of the CAP that the MDSC considers final.
A proposed CR or any part thereof may be appealed within seven (7) calendar days from the date the MDSC sends the Participating Farm written notice and a copy of the CR that the MDSC considers final, or within the timeframe established in the CR for resolution of the complaint, whichever comes sooner.
A notice of suspension from the MD may be appealed within ten (10) calendar days of written notice from the MDSC to the Participating Farm of its suspension from the MD.
The MDSC’s resolution of any alleged breach of, or other dispute arising under, the Milk with Dignity Confidentiality and Non-Disparagement Agreement, if such resolution was not through a CAP or CR, may be appealed within ten (10) calendar days from the date the MDSC sends the Participating Farm written notice of such resolution.
If the last day to appeal a CAP, CR or suspension falls on a weekend or holiday, the Participating Farm may file the appeal on the day immediately following that weekend or holiday.

2. A Participating Farm wishing to file an appeal must, within the time limits set forth in 1, notify the MDSC of the appeal in writing, either by email or first class, certified mail.

3. The notice of appeal sent to the MDSC must:

State whether the Participating Farm is appealing a proposed CAP, CR or suspension, and the basis for the challenge.
If the appeal is of a CAP or CR, set forth the alternative CAP or CR to which the Participating Farm is willing to agree, if any, or if the Participating Farm is appealing less than all of a CAP or CR, specify which provision(s) of the CAP or CR are being appealed and, as to such provision(s), set forth the alternative CAP or CR provision(s) to which the Participating Farm is willing to agree.
If the appeal is of a proposed suspension, specify which determination(s) of noncompliance the Participating Farm is challenging.

4. Upon receipt of the written notice of appeal from the Participating Farm, the MD Program will expeditiously arrange for the appeal to be heard.

5. During the pendency of an appeal, any disputed provision(s) of a proposed CAP or CR, or any suspension, will not take effect. If the appeal is of a proposed suspension, the MDSC will expeditiously inform any Participating Buyers who are customers of the Participating Farm of the Participating Farm’s appeal and the resulting stay of the suspension. Any provisions of a CAP or CR that are not appealed will take effect without regard to the pendency of the appeal.

Hearing an Appeal

6. Any appeal filed by a Participating Farm will be heard by an arbitrator who is a member of the National Academy of Arbitrators. The MD Program will attempt to maintain a standing panel of such arbitrators. The panel will be updated annually, or as necessary. Members of the panel will be chosen on a rotating basis to hear appeals, and will be informed prior to hearing an appeal that their fees and costs will be split evenly between the MDSC and the Participating Farm.

7. Once an arbitrator with the requisite availability has agreed to hear the appeal, the MD Program will inform the MDSC and the Participating Farm (for purposes of this Appendix, the “Parties”) of the arbitrator’s dates of availability. Except in extraordinary circumstances or with the written agreement of the Parties, no appeal will be heard less than ten (10) or more than fifteen (15) calendar days after the date the parties receive notice of the arbitrator’s availability.

8. Unless the Parties agree otherwise in writing (including by email):

Not less than six (6) calendar days before the date of the hearing, each Party must send the arbitrator, by email with a copy to the other Party, its proposed CAP or CR. No CAP or CR, or any contested provision(s) of either, will be submitted to or considered by the arbitrator if the Party submitting it has not already presented it to and made a reasonable effort to discuss it with the other Party as an acceptable basis for agreement.
If the appeal is of a suspension, not less than six (6) days before the date of the hearing the MDSC will identify the specific CAP, CR or Code provision the alleged violation of which is the basis for the suspension.
Not less than six (6) calendar days before the date of the hearing, the Participating Farm will send the arbitrator, by email with a copy to the MDSC, all materials that it wishes to have considered at the hearing, including if desired a written argument of no more than eight (8) pages (in at least 12-point type). No factual evidence will be submitted to or be considered by the arbitrator unless it was made known to the MDSC during and as part of the process that led to the appeal.
Not less than three (3) calendar days before the date of the hearing, the MDSC will send the arbitrator, by email with a copy to the Participating Farm, all materials that it wishes to have considered at the hearing, including if desired a written argument of no more than eight (8) pages (in at least 12-point type). No factual evidence will be submitted to or be considered by the arbitrator unless it was made known to the Participating Farm during and as part of the process that led to the appeal.
Not less than twenty-four (24) hours before the scheduled time for the hearing to begin, the Participating Farm may submit a written reply of no more than three (3) pages in response to the materials filed by the MDSC.

9. The appeal will be heard in the offices of the MDSC, or in another location on which the Parties and the arbitrator mutually agree, and will be conducted in such manner and for such period of time, not to exceed four hours (unless the Parties agree otherwise), as the arbitrator deems appropriate. At the hearing, each factual finding of the MDSC, whether explicit or implicit (as determined by the arbitrator) relating to the CAP or CR it has proposed, or in the case of an appeal of a suspension, to the CAP, CR or provision of the Code the alleged violation of which is the basis for the suspension, will be binding unless the arbitrator determines any such finding to be clearly erroneous.

10. Following the hearing, the arbitrator will adopt in its entirety either the CAP or CR proposed by the MDSC or the CAP or CR proposed by the Participating Farm. If hearing an appeal of a suspension, the arbitrator will either uphold or overturn the suspension as proposed by the MDSC. The decision of the arbitrator will be binding, final and rendered by the close of business on the second business day following the conclusion of the hearing. The arbitrator will email a copy of the decision to each Party. The CAP or CR adopted by the arbitrator will be implemented by the Participating Farm within seven (7) calendar days from the date of the arbitrator’s decision unless a) the CAP or CR itself provides for a longer period for implementation or b) the Parties agree otherwise. If the appeal was of a suspension, the MDSC will promptly notify Participating Buyers of the outcome of the appeal and, if applicable, the effective dates of the Participating Farm’s suspension period.

11. The arbitrator exclusively, and not any federal, state, or local court or agency, will have final jurisdiction to resolve any and all aspects of or claims regarding any dispute relating to the actions or proposed actions of the MDSC (or the MJ’s approval, if any, of any such actions or proposed actions of the MDSC) with regard to the MD Program, including without limitation the interpretation, application, amendment, enforceability, or validity of the Code of Conduct.

12. If the appeal results in adoption of the CAP or CR, or the provision(s) of either, proposed by the MDSC, the Participating Farm may not appeal another proposed CAP or CR, or any provision(s) of either, for six months.

13. The MDSC will pay the arbitrator’s fee for the appeal, including any costs incurred by the arbitrator in traveling to and conducting the appeal. The Participating Farm will then reimburse the MDSC for half of the amount paid to the arbitrator. All other costs will be borne by the Party that incurs them. If a Participating Farm does not reimburse the MDSC within forty-five (45) days of receipt of an invoice (which may be sent by email) for its share of the appeal costs, the Participating Farm will be placed on probation and will be suspended if payment is not made during the probation period.