H-2A program's wage methodology overhauled by Labor Department

U.S. Labor Department overhauls H-2A wage methodology in victory for farmers

U.S. Labor Department overhauls H-2A wage methodology in victory for farmers

The U.S. Department of Labor has announced a final rule that will allow farms that use H-2A workers to pay lower wages, in a major victory for U.S. farmers who have long complained of labor high costs.

In a sweeping overhaul of the guestworker program, the Department said it is changing the methodology for determining the program's annual Adverse Effect Wage Rates (AEWRs). 

For the vast majority of agricultural jobs, the rule uses the average hourly wages for field and livestock workers (combined), as reported by the U.S. Department of Agriculture’s Farm Labor Survey published in November 2019, as the AEWRs for field and livestock worker occupations through calendar year 2022.

However, beginning in 2023, and annually thereafter, the Department will adjust these AEWRs by the percentage change in the Bureau of Labor Statistics’ (BLS) Employment Cost Index for wages and salaries for the preceding 12-month period. 

For all other agricultural jobs, DOL will set and annually adjust the AEWRs using the average hourly wages for the occupational classification reported by the BLS Occupational Employment Statistics (OES) Survey program.

These agricultural jobs are often supervisory or higher skilled/uniquely skilled, such as construction jobs, which pay higher wages than typical farming occupations, according to the release.

The change is a major victory for farm groups that have been lobbying the Trump administration to change the way the department calculates the AEWRs.

The AEWR was intended to ensure that farmers can't undercut domestic workers by importing cheaper foreign labor.

But in its economic analysis of the rule, the department acknowledged that the wage cuts would encourage farms to rely more heavily on foreign workers imported under the H-2A program. 

“This final rule provides greater consistency and predictability in the H-2A nonimmigrant visa program,” said Assistant Secretary for Employment and Training John Pallasch.

“It is a victory for farmers, agricultural workers, and the American people, who rely on a vibrant agricultural sector to supply food for our families.”

U.S. Agriculture Secretary Sonny Perdue praised the final rule, which will become effective in 45 days after publication in the Federal Register.

Perdue said that the rule delivers on President Trump’s promise to stabilize farm labor costs and reform the H-2A wage rate. 

“This rule shows once again President Trump’s commitment to America’s farmers by delivering lower costs when they need it the most,” Perdue said in the release.

“Over the past several years farm wages have increased at a higher pace than other industries, which is why this DOL rule could not come at a better time. This is an example of good government that will ensure greater stability for farmers and help them make long term business decisions rather than facing uncertainty year after year.” 

The Department intends to issue a second final rule to finalize the remainder of the July 29, 2019, proposed rule that will govern other aspects of the certification of agricultural labor or services performed by H-2A workers, and enforcement of the contractual obligations applicable to employers of such nonimmigrant workers.

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