The Department of Labor (DOL) published its final rule on how it will determine the Adverse Effect Wage Rate (AEWR) for certain positions within the H-2A program, largely ignoring ag-industry concerns over the impacts of skyrocketing labor costs at the farm level.
Labor already accounts for nearly 40% of total production costs on some farms, according to AFBF. Michigan’s AEWR will rise 12.8% this year to $17.34 per hour, a cost that has some people considering leaving farming altogether.
In the rule, DOL revises the methodology by which it determines the hourly AEWR for non-range occupations — which are all jobs other than herding and production of livestock on the range — using a combination of wage data reported by USDA’s Farm Labor Survey (FLS) and the Bureau of Labor Statistics Occupational Employment and Wage Statistics (OEWS) survey.
“The department uses the data for field and livestock workers combined as reported by the Department of Agriculture’s Farm Labor Survey to set the Adverse Effect Wage Rate, but on a few occasions in recent years, the FLS has not been conducted,” DOL stated.
In December 2021, DOL proposed using the Bureau of Labor Statistics’ Occupational Employment and Wage Statistics (OEWS) survey to set the AEWR for field and livestock workers if the FLS is not available.
DOL also proposed that the AEWR for all other H-2A job opportunities, such as when those occupations are not included in the FLS survey, be based on occupation-specific OEWS wage data “to ensure accurate wage rates are offered and paid to workers performing more skilled jobs which command higher pay, such as supervisors of farmworkers, truck drivers and agricultural construction workers.”
In the new rule, DOL admits the new methodology could result in more than one AEWR for a single contract.
For any jobs that contain work that falls outside of the six field and livestock workers Standard Occupational Classification (SOC) codes, there will be a distinct statewide AEWR for each SOC code, and the employer will have to pay the higher AEWR for all workers on the contract who lists that duty.
Truck driving in particular will be a very complicated piece of the new rule for farmers to sort out for H-2A employees, said Sarah Black, general manager of Great Lakes Ag Labor Services (GLALS), an ag labor agency for MFB members focused on H-2A or seasonal visas.
“There will be a lot of confusion with the new rule because so many job descriptions on farms have lots of different responsibilities,” Black said.
“The new rule is just one of the reasons why it’s critical for people to understand the program, and to work with a trusted partner who is in their corner and focused on compliance.”
The final rule establishes the following methodology for determining AEWR:
- DOL will continue to use the average annual hourly wage as reported by the FLS for field and livestock workers, combined, occupations — which DOL claims represent most agricultural jobs — for the state or region.
- For all other agricultural jobs “not represented adequately or reported by current FLS data,” the department will use the statewide or national average annual hourly wages for the occupational classification reported by OEWS program.
- For job opportunities that cover more than one classification, DOL will base adverse effect rates on the highest wage for the applicable occupations.
“This transition to using more OEWS data to calculate farmworker wages will increase labor expenditures for much of the agriculture industry that utilizes the H-2A program,” said John Kran, MFB national legislative counsel.
“The rule takes no steps to incorporate market realities or the capacity of the American agricultural industry to absorb increasing labor expenses.”
Kran noted the new rule was written before the latest round of AEWR increases and fails to consider the drastic wage increases over the past five years.
In December 2022, MFB members urged Congress, President Biden and the U.S. Department of Labor to freeze AWER for one year.
“Ultimately, we need Congress to step in and help us find a long-term solution to address our workforce challenges or we’re going to be dependent on foreign countries to produce our food, which hurts farmers, local communities, and families who purchase food in grocery stores,” Kran added.
The National Council of Agricultural Employers (NCAE) called the new rule “a disaster” and said it’s working to determine options and next steps moving forward.
More than 60% of the fresh fruit and more than 35% of the fresh vegetables consumed in the U.S. are produced offshore, according to NCAE, which said the problem will only worsen from the new rule.
“With this new rule, American consumers can be confident in one thing, they will be more likely to find tomatoes in their grocery store grown in Mexico, than those grown in Florida, California, or Michigan,” wrote Michael Marsh, NCAE president and CEO, in a statement.
“A country forced to rely on others for its sustenance has forfeited a key element of its national security. America expects and deserves better than this!”