Klamath Falls, Ore. – A popular resort and destination in Southern Oregon was found to have been working with an illegal out-of-state equestrian outfitter that was found to have serious issues related to licensing and labor violations– including its self-admitted use of child labor and volunteers in violation of both Oregon and federal labor laws.
The discovery could potentially lead to serious issues for the company and its owner; as it appears to have skirted workers’ compensation insurance premiums, payroll tax obligations, and likely potential back wages that should have been paid to both adult and minor workers.
Running Y Resort, located just outside of Klamath Falls, contracted last spring with Jensen Equine (legally Jacqueline Jensen Equine, LLC), a California-incorporated equestrian business, in order to facilitate trail riding outfitting services at the resort.
According to Running Y’s General Manager Jason Murray, the entire partnership was from a proposal made by the company’s owner, Jacqueline Jensen.
The proposal, Murray said, came not long after another outfitter had retired and closed their business at the onset of the COVID-19 pandemic. It was not immediately clear if this company had been a licensed outfitter or had engaged in similar labor practices.
Running Y Resort is active in directly marketing the services, which Murray described as a “value-added service for our guests”.
“I do expect all of our third-party contractors to follow all laws and regulations, and unfortunately I know this situation would probably make for a pretty good story,” said Murray.
During the course of an investigation by NW Horse Report into ongoing issues of illegal labor practices and lack of licensing by a shockingly high percentage of Oregon’s equestrian outfitters, it was uncovered that Jensen Equine had several issues that were eventually confirmed by officials or public records with numerous state agencies.
The wider investigation was prompted after numerous legal and legitimate equestrian outfitters started to complain that state officials, law enforcement, and prosecutors, have not been proportionally enforcing the outfitter and guide laws with equestrian outfitters. Those allegations included that the State is heavier-handed against fishing guides they claim are charged far more often while making far less money illegal guiding than those engaged in equestrian outfitting.
Several proponents say that in addition to the issue of fairness and protecting consumers, it’s also about protecting the equine and outfitting industry’s reputation as a whole.
The issues for Jensen Equine included a failure to register as a foreign (out-of-state) incorporated business that is physically conducting commercial transactions in Oregon, not being a licensed outfitter guide with the Oregon State Marine Board, not providing workers’ compensation coverage, and self-admittedly employing volunteers– both adults and minors.
Employing minors 14-17 in Oregon requires a minor exemption certificate issued by Oregon’s Child Labor Unit, a part of the Bureau of Labor & Industries (BOLI).
Its employment practices could also have serious payroll tax implications for Jensen and her company, along with penalties and fines from the Oregon Department of Consumer & Business Services (DCBS) for not providing workers’ comp insurance for subject workers.
Last month, another Oregon equestrian outfitter was fined $118,991 by the Director of DCBS for its failure to maintain workers’ compensation coverage and failure to properly document its pay of workers, including its own self-admitted volunteer workers. The same company is now also facing a serious BOLI investigation stemming from complaints and its owners’ self-admitted employment of minors and volunteers when speaking to BOLI investigators last month.
According to Rachel Mann, a spokesperson for BOLI, for-profit companies are required to pay workers.
“Oregon law generally does not allow a for-profit company to employ an individual in a voluntary capacity. ORS 653.010(2) is the relevant statute,” Mann told NW Horse Report earlier this week.
Mann also confirmed that Jensen Equine did not have a minor exemption certificate.
Typically only non-profit organizations can have volunteers, but even then non-profits must still comply with many other labor laws.
Both Oregon BOLI and the US Department of Labor have further confirmed limitations under the Federal Labor Standards Act (FLSA) relating to the employment of minors as well. In addition to obtaining a minor exemption certificate, Oregon law and the FLSA also place several limitations that vary for workers 16-17 years of age, and more for those 14-15.
Except in limited situations, including of employment of immediate family members and the agricultural field, which still requires the certificate, the employment of minors 13 and younger is generally prohibited.
According to officials– and contrary to some mistaken beliefs in equestrian circles– most equestrian businesses do not meet the definition of “agriculture” under the FLSA and many State labor laws. Agriculture qualification is also defined differently to some degree between labor and tax laws, often adding to the confusion.
Jensen Equine self-promoted its “volunteer” program– calling it the Running Y Equestrian Volunteer Program.
The company engaged in limited exchange (or “bartering”), providing discounted or free riding lessons and trail rides. “We have a Volunteer Program for Individuals Age 14+ -adult!”, according to Jensen Equine’s website, as of the publication.
“All our volunteers have the option to earn discounted or free riding lessons and trail rides! Please reach out to learn more about this program.”
Even if such exchanges were provided to workers and the value was above minimum wage, it would likely be considered an effort to evade state and federal payroll taxes, a quickly dissipating practice within the equestrian industry that is leading to increasing consequences for many equestrian businesses and owners. The practice is also a known and common tax evasion scheme in numerous industries.
A labor expert and attorney who spoke with NW Horse Report stated that “such an exchange would likely be viewed as exploitative, and I think this is a prime and unfortunate example of a business flaunting the laws”, going on to explain that it violates clearly established labor laws– especially when it comes to the involvement of minors.
“The problem is many of these businesses will do it thinking it’ll be a slap on the wrist if they get caught, but often it’s a hard lesson when there are tax implications.”
Murray told NW Horse Report that the resort was under the belief that Jensen was properly licensed and certified to provide her services, expressing that they would be “seriously looking into the matter.”
“This is certainly something we are going to take some urgency on getting to the bottom of,” said Murray.
When reached for comment, Jensen immediately claimed she was “fully certified and licensed”, but became defensive when asked specifically about licensing with the OSMB, the lack of workers’ compensation coverage, and the illegal employment of minors.
Jensen stated she is personally certified with the Certified Horsemanship Association (CHA), although has no relevance to any required outfitter licensing and labor requirements in Oregon.
Jensen eventually stated “I’m going to call my attorney,” before ending the conversation.
Murray admitted that he was unfamiliar with the OSMB licensing requirements. While stating the resort itself was well aware of its own requirements and basic labor standards, he stated they had not been aware that Jensen Equine was not paying its workers and was not permitted to hire minors.
A spokesperson for OSMB also confirmed that unless a company owned or had exclusive control over all the property it operates on, it must be licensed. In the cases where outfitters operate on public lands or private lands of others, they must be licensed. This typically applies and is common when outfitters contract with resort destinations or timber companies.
Those operating on federal USFS or BLM lands are also required to obtain additional permits with the respective agency, another step that is further verified by OSMB officials.
Days later, an Oregon attorney for Jensen reached out to NW Horse Report advising that she represented Jensen’s company. A week after providing the attorney with some of the same questions and more, the attorney’s response claimed that Jensen’s company did have liability insurance coverage, although this could not be verified as Jensen was not registered with OSMB and Jensen’s attorney did not provide any insurance documents for review.
The attorney stated her client would not comment on any of the other questions, “In response to your inquiries about my client’s compliance with federal, state, and local laws, my client is reviewing all of the issues raised in your email and has no further comment at this time.
Since that time it appears the attorney has filed paperwork for the company’s foreign business registration in Oregon. According to OSMB officials, the company had yet to apply for an outfitter license.
Without being a licensed outfitter guide with the OSMB, as would be required by Jensen and her employees, there is no legal mechanism for consumers to know if the company was insured and was complying with safety standards and background checks.
OSMB outfitter licensing requires businesses to be properly registered in Oregon, obtain the required liability coverages, conduct background checks on all owners and employee guides, and require first-aid and CPR certifications.
DCBS records also still show no record of workers’ compensation coverage. An official with BOLI also confirmed the same day that it had no records showing a minor exemption certificate for Jensen or her company.
It was also unclear if Jensen Equine was in compliance with Oregon laws pertaining to hosting day youth camps which it advertises as providing from the Running Y Resorts. Day camps are considered “organizational camps” under Oregon law and require specific requirements to ensure the safety of minors.
Murray expressed that the Running Y Resort takes guest safety seriously, expressing his concerns that Jensen and her employees were not licensed with the OSMB, but said the lack of workers’ compensation and labor practices was even more concerning since he knew that applies to all businesses regardless of industry, something he said the Running Y Resort itself ensures full compliance with.
“Obviously it’s disturbing because we had an agreement that [Jensen] would be staying within the lines, both legally and professionally,” Murray stated.
“I know here at the resort we go through great pains to make sure we’re following every letter of the law, you just don’t play around with these sorts of things,” said Murray, while referring to labor practices.
After NW Horse Report was contacted by Jensen’s attorney; Murray, and the Running Y Resort, have ignored all follow-up inquiries into the current status of their trail riding equestrian program or what efforts and actions they may be undertaking related to Jensen’s legal compliance and the protection of guests and Jensen’s employees.
While Jensen and her business could face serious consequences related to self-admitted labor practices, the more serious concerns for those involved likely relate to the safety of workers and the confidence of consumers.
While it hasn’t been uncommon for a majority of Oregon’s equestrian outfitters to have some sort of issue related to licensing or labor practices, the numerous issues for Jensen Equine appear to be the most significant when compared to all other equestrian outfitters in Oregon.
Brian Sykes, President of the Oregon Outfitters & Guides Association, previously told NW Horse Report that guides working for an outfitter should understand that they can be charged with a crime and provided a recent example he was personally familiar with.
“Even if they are an employee of an outfitter, if they do not have their own license or ensure they are not added as an associate with the Marine Board with a properly licensed outfitter, and they go out and provide guiding services, then yeah they are an illegal outfitter,” said Sykes.
The Oregon State Police also provides their “TIP Program” which allows citizens to report illegal guiding or report outfitter guides acting illegally, including poaching. If you know of any illegal guiding and wish to report a violation or suspicious activity, call 1-800-452-7888 or *OSP or *677 from a mobile phone. You can also email TIP@osp.oregon.gov.
Officials with both Oregon’s BOLI and DCBS also encourage reports from subject workers who might believe an employer is not complying with wage and labor laws, or workers’ compensation insurance. Employers are required by law to have an active poster showing their current workers’ compensation coverage information within a common area of the workplace.
This story was edited after initial publication to correct the spelling for Murray from Murry