US growers applaud new H-2A interim rule but urge for a long-term, market-based solution

On October 2, the US Department of Labor (DOL) issued an interim final rule that updated the methodology for calculating H-2A workers’ rates, effective immediately. 

This is the first major change to H-2A wages since the US returned to the 2010 wage methodology on August 25, following the nullification of the 2023 rule.

The decision determines that H-2A workers’ Adverse Effect Wage Rates (AEWR) are now based on state-level wage data from the Bureau of Labor Statistics’ Occupational Employment and Wage Statistics (OEWS) survey. The provision also sets two skill-based wage categories—entry-level and experienced.

Grower associations celebrated the revision. In a statement posted to the organization’s website, USApple CEO Jim Bair emphasized the new rule’s ability to provide growers with some relief from rising production costs. In a press release, the International Fresh Produce Association said the methodology will “save agricultural employers an estimated $2.3 billion annually in labor costs.” 

Ag pushes for stability in labor costs

Chris Butts, Executive President at the Georgia Fruit and Vegetable Growers Association, said this is a major step towards certainty. But growers need a permanent solution, he added, arguing that the industry would suffer if a new administration came along and decided to backtrack the revision. 

“We need to codify these and some other changes and make them permanent so that growers have that certainty and transparency going forward,” he said. 

The Georgia Fruit and Vegetable Growers Association is part of the Agricultural Labor Reform Coalition. The group comprises 34 grower organizations across the South that came together to advocate for greater transparency in setting AEWRs.

Butts said growers in Georgia have had to face uncertainty around Thanksgiving for the past three years. The state is a major producer of ingredients largely used for holiday meals, including pecans and sweet potatoes. 

“Around that time, we've always had new wages issued by the Department of Labor, so as growers are going through this process of starting their contracts for the next year, normally midway through that process, they would have a rate change,” he explained. “In the last three years, wages have increased 31 percent overall.”

He added that the set rates before the final rule were “serving as kind of an artificial ceiling.”

“Numbers were so high that you struggled to pay anybody and everybody that rate,” he explained. “The big thing is this set is a minimum market rate.”

Not a cap—a baseline 

He celebrated the introduction of a two-rate methodology, which, although not perfect, he believes will bring rates closer to a “fair and market-generated level.”

Butts added that growers will likely pay workers more than the minimum rate to attract and keep the workforce. But the provision now gives producers the chance to be selective about who they pay class-one or class-two wages.

“That competitiveness is what leads to that true market rate,” he explained. “I believe you’ll see experienced workers in class two and that more entry-level type workers are in class one.”

As for what the coalition would like to see in the final rule, Butts said the goal is a less complex and burdensome program. He explains that most of his coalition’s growers use attorneys, farm labor contractors, or other service providers to help them navigate the recruiting process, which is extremely laborious and bureaucratic. 

“The department has already taken some great first steps, but overall, the biggest thing we can do is simplify the program and let growers focus on being farmers instead of immigration experts or guest worker experts,” he concluded. 

The latest H-2A wage overhaul

The journey through the courts to get to the October 2 ruling was long and complicated. 

Back in August, wages were set once again based on the 2010 methodology after the US District Court for the Western District of Louisiana found the rule to be “arbitrary and capricious” under the Administrative Procedure Act.

The 2023 final rule continued using the USDA Farm Labor Survey to set the average annual hourly wage for field and livestock workers. However, it introduced a rule establishing that wages for agricultural jobs inadequately represented or reported in current FLS data were to be based on statewide or national average annual hourly wages reported by the OEWS program.

For work that didn’t fall under those titles, employers also had to use a Standard Occupational Classification (SOC) code, which determined the rate for positions such as logging, construction, heavy trucking, and supervising farmworkers. It also required employers to pay the highest wage applicable if the job could be classified under more than one occupation.

Several growers and growers’ associations spoke against the regulation, and three cases were filed challenging the rule.

In August, US District Judge Robert Summerhays of the Western District of Louisiana discarded the rule by converting a preliminary injunction he issued last year, which applied only to H-2A workers employed in sugarcane farming, into a final judgment. This returned the wage methodology to 2010’s standards. 

Growers applauded the return to the 2010 methodology. However, they’re still hammering on the point that they need a final, comprehensive rule.

“For the last three years, our growers couldn't even plan for next spring,” Butts added. “So providing that certainty, to allow them to plan, just like any other business in any other industry, is critical.”

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