The H‑2A program provides work visas for seasonal or temporary foreign farm workers. In my paper on the program, I explained how complex the process already is, containing over 200 rules that farmers must follow to hire workers legally. Now the Department of Labor (DOL) is proposing to make it even more expensive and costly to hire legal farm workers in the midst of an unprecedented labor shortage and a dramatic increase in inflation, particularly in the United States and especially for food. It is also attacking a program designed to prevent illegal immigration, while Border Patrol is recording record arrests at the southern border.

Currently, all H‑2A workers, as well as any U.S. workers in comparable positions, must be paid the same Adverse Effect Wage Rate (AEWR)—the H‑2A program’s minimum wage—but under the proposed regulation, several job types on farms will now have separate and higher AEWRs. The rule will both inflate the required wage rates and create a new massive administrative burden for all H‑2A farmers to separately track every activity of every employee—H‑2A and U.S. employees—on their farms to avoid violating these new wage rules. DOL also proposes to intentionally misclassify H‑2A workers into higher wage occupations if they perform any job duties that could fit under that job category.

In my paper, I explained how the AEWR already inflates H‑2A wages:

DOL adjusts the AEWR annually based on a survey and uniquely classifies overtime, hazard pay, bonuses, performance incentives, and all other payments as wages. This inflates the [required] base hourly rate before adding these types of extra compensation for the following year. This inflated average rate then applies to all workers, pricing out H‑2A and U.S. workers who had below-average wages. When these workers drop out, the surveyed wage is artificially inflated even further. Many farmers feel these procedures put the AEWR on an upward escalator that becomes more disconnected from reality each year. The average AEWR has grown about twice the rate of inflation.…

The AEWR has other methodological problems. For instance, it is based on the average farm wage (which includes many high-end outliers) rather than the median wage, nor does it include the cost of mandatory benefits provided to H‑2A workers and U.S. workers in similar jobs such as housing and transportation.

One purpose of the H‑2A program is to prevent a farm labor shortage, and it has failed. The most important reason why is that the AEWR is set much too high, so farmers cannot afford to hire enough workers. The results are lost productivity, higher prices, and illegal immigration.

How DOL Plans to Raise H‑2A Minimum Wages

Now DOL wants to make the AEWR even more problematic. The AEWR has so far been based on the regional average rate for field and livestock workers as determined by the U.S. Department of Agriculture’s (USDA) Farm Labor Survey (FLS). The average of each state’s AEWR reached a record $15.03 in 2022. “Range” workers (e.g., sheepherders) have a special AEWR of $1,807.23/month in all states.

DOL now proposes to require separate wages for various specific types of farm work other than field and livestock positions. Farmers will have to pay higher wage rates if they want to hire workers who perform, for instance, construction tasks or truck driving. In addition, the USDA does not collect any data for Puerto Rico and Alaska, so they have always been subject only to the federal minimum wage. But DOL is now proposing to create new AEWRs using data from the Bureau of Labor Statistics (BLS) Occupational Employment and Wage Statistics (OEWS) non-farm survey, which will increase the AEWRs in Puerto Rico and Alaska substantially: 31 percent and 117 percent, respectively.

These new special AEWRs will be based on the average rate paid to all construction workers, tractor trailer drivers, etc., as recorded in the OEWS survey. In addition to having the same methodological issue as the FLS (e.g. including total compensation to estimate the average base wage rate), the OEWS adds a new problem: unlike the current FLS survey, it is the average for the occupation for non-farm employers, not reflective of the wages for workers on farms. Thus, the switch to the OEWS fails to account for specific farm labor issues, contrary to the intent of the H‑2A program.

The National Council of Agricultural Employers (NCAE) notes that DOL is pointlessly trying to attract employed truck drivers away from jobs that are “full-time, year-round, come with benefits, and the drivers usually start their day at 7 am, and are done by 4 pm” to seasonal jobs on farms with many non-driving tasks. If this works (which it won’t), the strategy will make the truck driver shortage in the United States worse—at a time when it is reaching catastrophic levels. DOL does not supply any evidence that these H‑2A workers are having an “adverse effect” on any U.S. workers, and there is none.

There is another problem. DOL claims that the FLS does not include data on farm workers that, for instance, drive trucks. But that is not completely true. The FLS says that activities like “trips to buy feed or deliver products to local market” do qualify as agricultural work and are included in the survey. Assuming that these workers do receive a higher wage, DOL is now double counting. The presence of truck drivers raises the overall wage for field workers, and now DOL plans to also require an even higher wage for truck drivers using OEWS data collected away from farms.

The Effects of the DOL Rule

Table 1 lists the occupations subject to the new wage rules. Altogether, the proposed rule would have affected 6,945 H‑2A workers and mandated at least $44.7 million in additional wages for these workers based on how they were classified in 2021 (huge caveat). The hourly wage effects in virtually all the affected occupations would be substantial: 26 percent for construction, 69 percent of tractor-trailer truckers, 113 percent for supervisors (more than double), and 189 percent for farm managers (nearly triple).

But this estimate radically understates the true cost of the rule because any of the more than 300,000 other H‑2A workers who conduct any tasks that fall under one of these classifications will also be assigned these inflated wages. If DOL finds that even 5 percent of H‑2A workers have non-field or livestock related tasks, the total cost of the rule would more than triple. The AEWR also applies to every U.S. worker in comparable employment, and DOL cannot even estimate how many U.S. workers would be affected, which could make these costs double or triple again. Altogether, the costs could easily be more than $500 million and perhaps as high as $1 billion or more. This huge level of uncertainty is, in and of itself, a major problem with the rule.

Bureaucratic Problems with the Rule

While the 6,945 H‑2A workers subject to the new wage requirements based on how they were classified in 2021 (huge caveat) represent just 2.2 percent of the H‑2A workers, the rule will affect all H‑2A workers.

1. Multiple job categories

The most important reason that DOL wants to regulate the wages for this small share of H‑2A workers is that it wants the authority to inquire into the job duties of every H‑2A worker to see if they can be classified under one of these alternative job categories. DOL plans to assign the highest AEWR that it identifies in any situation where the job tasks involve multiple occupations, even if the vast majority of the job is in the lower-paying occupation. AmericanHort’s economists call it the “most wrongheaded, punitive, and potentially damaging provision of the entire proposal.”

As attorney Wendel Hall noted in his comments on the rule, the OEWS survey classifies workers based on their primary job duties, not based on ancillary tasks, so DOL is misusing the OEWS in order to intentionally misclassify H‑2A workers under higher-wage jobs. Since farm workers often mend fences, fix motors, drive vehicles, and engage in other ancillary tasks, tens of thousands of additional H‑2A workers risk being swept into these higher-wage classifications. The NCAE notes that many H‑2A workers drive the bus with the crew to the job site for an hour each day and then work in the field alongside them. They will now receive a “bus driver” wage (based on nonfarm wages) for that work despite it being a small minority of their activities. Wendel Hall points out that if the bus driver gets sick, no other worker could legally drive the bus, even if they had a license to do so.

DOL will also be able to scrutinize the activities of all domestic U.S. workers to see if they fall into any of these classifications and would be required a much higher wage. Consider this passage from DOL on how to determine the proper classification for a truck driver:

for job opportunities involving driving duties, the CO will look at factors such as the type of equipment involved (e.g., pickup trucks, custom combine machinery, or semi tractor-trailer trucks; makes and models of machines to be used), the location where the work will be performed (e.g., on a farm or off), and the qualifications and requirements for the job opportunity in order to determine the most appropriate SOC code to assign to the employer’s job opportunity.

DOL is only willing to say it will “consider” these factors, not that any of these factors will be determinative of the proper classification, so no employer will know going into an application what wage will be required nor will they know whether they will be required to pay backpay to any U.S. workers who drove trucks during a post-employment audit. California Farm Labor Contractor Association told DOL that the “vague explanation of the SOC code classification process will leave employers confused.”

DOL does provide one concrete example: a worker who needs a Commercial Driver’s License (CDL) to drive grain to storage would now be classified a “truck driver,” even though they are currently classified as an agricultural equipment operator and are subject to a 69 percent wage increase. While DOL claims that 98 percent of H‑2A workers will not see their wages change at all, this example proves that the rule will cover vastly more H‑2A workers.

If farmers don’t want all their workers to be subject to the higher wage, DOL says that they will have to file multiple applications for each set of workers with some of these special tasks, but this assumes that there will be enough work for the H‑2A worker in the assigned occupation. A worker whose only task is driving to and from the jobsite would not have enough driving work to keep them occupied their entire time as driver. If there’s not enough work, the rules require that employers still pay the worker at least three quarters of the wage that they promised at the higher wage level.

AmericanHort notes that this new wage structure will pose the “greatest hardship on smaller and/​or highly diversified and vertically integrated farms, where there will be less of an ability to ‘silo’ job duties.” The Office of Advocacy for the Small Business Administration (SBA) believes that DOL “significantly underestimates the economic impacts of this rule on small businesses,” in part, by ignoring the cost of reclassifying workers.

2. Multiple applications

Until now, farmers could submit a single “job order” request to a state workforce agency requesting U.S. workers and a single H‑2A temporary labor certification application to DOL for the entire season. Now farmers will need to submit multiple job orders and applications to request even 1 additional worker who is not a field and livestock worker. This means more legal costs and more potential delays and problems.

The U.S. Apple Association told DOL, “One medium sized employer explained he would have to file four contracts instead of one. Each contract costs $5,000 so even without taking into consideration these higher wages—which would be significant—he would pay $15,000 in additional fees.” Since the highest possible wage would apply to all workers on a single application, farms would have to file 4 or 5 applications any time they wanted to add any new duties so that they would not get stuck with an absurd wage for dozens or hundreds of workers.

3. Delays

More applications will also impose more work on the agency, which will likely result in delays—particularly since the H‑2A filing fees are not set based on the actual cost of filing. This is true for both DOL, where the fees were set decades ago, and U.S. Citizenship and Immigration Services, which offers “premium” 15-day processing but only requires the regular filing fee. There is no explanation from where the resources will come to adjudicate hundreds or thousands of new applications.

Moreover, the H‑2A process involves multiple reviews—first a review of the job order by a State Workforce Agency (SWA), which is used to recruit U.S. workers at the required wage. The SWA will get the first crack at deciding if the wage is right. Then DOL still reserves the authority to reverse the SWA at a later stage and impose a higher wage. If that happens, the employer will have to restart the entire process so the SWA is advertising the right wage. As the description above indicates, the task of deciding the proper wage is difficult, so by itself, this deeper review will add a new bureaucratic delay for a very time-sensitive process. If workers fail to arrive in time, crops will die in the fields.

4. Two mid-season wage increases

The AEWR currently has the unfair attribute of requiring employers to increase wages in the middle of the contract period whenever a new survey comes out. However, the AEWR currently is based on just 1 survey: the FLS, which comes out in November, a down period for most farms when H‑2A workers have not yet arrived. By contrast, the OEWS is published on March 31, and DOL plans to make those rates effective on July 1 at the height of the farm’s busy season.

This proposal reflects a complete disregard of business realities and will make the H‑2A program far more difficult for employers to use. The American Farm Bureau Federation notes, “Farmers’ existing contracts and price expectations cannot account for a significant change in the middle of the growing season as would occur under this proposal to have wage determinations be implemented at separate times.”

5. Management and record keeping nightmares

This new rule will unleash a management and recordkeeping disaster on H‑2A farms. They will have to document all activities and strictly separate activities that fall under the terms of this new rule. If any U.S. worker perform activities covered by the new AEWR rule, that would need to be recorded and a higher wage paid not just during the time that they engaged in the activity, but for the entire contract. If an H‑2A worker engages in any incidental construction work or carpentry work (such as mending fences), DOL could assert that the farmer “stole” wages from that worker and require backpay.

Conclusion

No U.S. workers will be helped by this proposal. It will only result in the elimination of many H‑2A positions. The DOL’s proposal has no other purpose than to inflate H‑2A wages, which will harm farmers, exacerbate food inflation, worsen the labor shortage, and increase illegal immigration. These goals are completely contrary to the purpose of the H‑2A program. The H‑2A program was created to stop illegal immigration, prevent labor shortages, and stop food inflation. The DOL should scrap this ill-conceived, half-baked proposal.