DOL Plans to Make the H2A Program Too Expensive for Many Farms to Use

By David J. Bier
The H2A 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.

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