The Labor Department is implementing a new methodology for calculating H-2A wage rates that could save employers an estimated $2.5 billion a year.
In an interim final rule to be published in Thursday's Federal Register, the department said it will no longer base the adverse effect wage rates (AEWRs) on the Agriculture Department’s Farm Labor Survey, which USDA has already said it was scrapping. Instead, Labor will use the Occupational Employment and Wage Statistics (OEWS) survey from the Bureau of Labor Statistics.
“For the vast majority of H-2A job opportunities, the department will use OEWS survey data to establish AEWRs applicable to five Standard Occupational Classification (SOC) codes combining the most common field and livestock worker occupations” previously measured by the FLS, which covered six SOC codes, the rule says.
The AEWRs will be divided into two skill-based categories “to account for wage differentials arising from qualifications contained in the employer’s job offer,” the interim rule says. “For all other occupations, the department will use the OEWS survey to determine two skill-based AEWRs for each SOC code to reflect wage differentials.”
The National Council of Agricultural Employers said the move will bring ag wages “back to reality.”
NCAE and other groups had challenged a 2023 AEWR rule that they said wrongly classified workers as doing certain specialized, higher-paying jobs even if they only did those jobs a fraction of the time they spent working.
“These litigation efforts were instrumental in dismantling this wrongheaded regulation,” an NCAE press release said
Under the new rule, “employers are also granted downward compensation adjustments to the applicable AEWRs which employers can apply on wages paid to H-2A workers who receive free housing,” the NCAE release said.
The International Fresh Produce Association also applauded the rule.
Cut through the clutter! We deliver the news you need to stay informed about farm, food and rural issues. Sign up for a FREE month of Agri-Pulse here.
“The DOL’s interim final rule represents an historic step forward in creating a fairer, more predictable, and administratively workable process for setting H-2A wage rates,” the organization’s statement reads. “We are pleased to see that DOL incorporated many of the recommendations IFPA and our members have consistently provided to make the program more practical and sustainable so growers can participate without facing insurmountable barriers.”
The Labor Department said the rule should save employers $2.46 billion annually.
The number of visas authorized under the H-2A program has grown steadily since 2012, when just 90,000 visas were issued. In fiscal 2024, 384,900 H-2A positions were certified, an increase of more than 6,000 from the year before.
“The last two years have seen a drop-off from explosive growth in the H-2A program in recent years,” according to an analysis by American Farm Bureau Federation economist Samantha Ayoub.
The rule says that "the lack of a reasonable and viable AEWR methodology, when combined with the current and imminent labor shortage exacerbated by the near total cessation of the inflow of illegal aliens, increased enforcement of existing immigration law, and global competitiveness pressures ..., presents a sufficient risk of supply shock-induced food shortages to justify immediate implementation of this IFR."
For more news, go to Agri-Pulse.com
