Labor Department Raises H-2A Wages

Farms Across US to Pay 4.5% Higher Wages in H-2A Guest Worker Program

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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The U.S. Department of Labor announced wage increases for H-2A guest workers. (DTN file photo by Chris Clayton)

OMAHA (DTN) -- Farms across the country will be paying on average 4.5% higher wages to H-2A agricultural guest workers in 2021 after a recent injunction against a Trump administration rule to freeze those wages.

The U.S. Department of Labor this week issued a notice announcing the adverse effect wage rate (AEWR) for 2021, https://public-inspection.federalregister.gov/…, following a successful court challenge to the Trump administration rule. The AEWR is effectively the minimum wage for H-2A guest workers.

In December, a federal court granted national farmworkers groups a preliminary injunction to stop the rule, https://www.dtnpf.com/….

The U.S. District Court for the District of Eastern California in Fresno said in its order the plaintiffs were likely to succeed on the merits of their case.

Farms across the Corn Belt will be paying H-2A workers substantially more because of the latest wage boost.

Illinois and Indiana farms will pay $15.31 per hour, an increase of 79 cents. In Iowa, H-2A wages increased also by 79 cents to $15.37. In Kansas, Nebraska, South Dakota and North Dakota, farms will pay 90 cents more per hour at $15.89.

Minnesota farms will pay $14.72 an hour, or a 32-cent increase. California will see the biggest increase in the country, jumping from $14.77 per hour to $16.05.

At the beginning of November 2020, a Department of Labor regulation froze wages for 2021 and 2022 at the 2020 AEWR, or an average in the United States of $13.99 an hour in 2020. In a Nov. 2 statement, U.S. Secretary of Agriculture Sonny Perdue touted the rule as a way for farmers to save costs.

Currently, the lawsuit has been continued until March 17, 2021.

The United Farm Workers and the UFW Foundation filed a lawsuit in the federal court, alleging the rule would lead to substantial wage losses to ag workers.

In the order, the court cited a similar case ruled on by the U.S. Court of Appeals for the District of Columbia Circuit.

The court said it agrees with the plaintiffs in that the final rule "severs the relationship between the AEWR and current farm labor market conditions; freezes the AEWRs for two years at 2020 levels, even though recent trends establish that agricultural wages have been rising and will likely continue to do so; then lifts the wage freeze in 2023 based on the Employment Cost Index (ECI), a generic index of wages from across the economy, without ever compensating for the wage growth lost during the two-year wage freeze."

United Farm Workers argued in its lawsuit the wage freeze would cause workers to be paid more than 4% less on average than they would have otherwise in the current regulation.

The lawsuit alleged California farmworkers would be paid about $1 less per hour in the final rule compared to the current methodology, which would lead to about $170 in lost wages per month.

The H-2A agricultural guest worker program allows employers to hire foreign workers on temporary visas for seasonal jobs.

According to the United Farm Workers, the number of H-2A visas approved increased from about 200,000 in 2019 to more than 275,000 in 2020.

Current H-2A law prohibits the Department of Labor from approving employers' applications for guest workers if the wage rates offered would adversely affect the job opportunities or wage rates of U.S. farmworkers.

The lawsuit alleged the Department of Labor's new regulation violated the federal Administrative Procedure Act in several ways, including by failing to comply with the H-2A prohibition against adverse effects to farmworkers' wages, arbitrarily and capriciously selecting mechanisms that bear no relation to the farm labor market, and failing to give the public notice and an opportunity for comment on the wage freeze.

Todd Neeley can be reached at todd.neeley@dtn.com

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Todd Neeley