The Department of Labor (DOL) published a new final rule this week that will change its process for certifying U.S. farmers to hire foreign guest workers under the H‑2A visa category. DOL initially proposed the rule in 2019 under the Trump administration, but the proposed rule contained a variety of cost-saving and streamlining measures for employers. The Biden DOL went line-by-line removing all those positive aspects leaving only the cost-increasing parts.
This new rule will add to the already sky-rocketing food prices in the United States. In September, food prices had already increased 11.2 percent over last year—the highest amount in over four decades and a sixfold increase over the prepandemic rate. Yet DOL is about to impose even more costs on farmers and U.S. consumers. The rule has several cost-inflating measures, but the most significant would indirectly cause the H‑2A minimum wage for many farmers to go up, increasing the cost for hiring, reducing the number of H‑2A workers hired, and thereby reducing food production.
The new rule inflates H‑2A minimum wage rates.
H‑2A farmers must pay H‑2A workers (and U.S. workers in corresponding employment) the higher of: 1) the Adverse Effect Wage Rate (AEWR), 2) the prevailing wage, or 3) a collective bargaining (union) wage (very rare on H‑2A farms). The AEWR is the regional average wage of field and livestock workers in the U.S. Department of Agriculture’s Farm Labor Survey. Almost always, the binding wage has been the AEWR—which already has several elements designed to inflate wages—but this rule seeks to impose even higher “prevailing” wages.
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