Department of Labor Proposes New Formula For H-2A Guest Worker Wages

As December began, the U.S. Department of Labor (“DOL”) proposed a modified formula for calculating minimum wages for agricultural guest workers on H-2A visas. The proposal was necessitated by a federal judge in California striking down a prior proposal in December 2020 for the DOL failing to provide sufficient justification for two fundamental changes.

The new proposal mirrors most of the previous methodology but deletes a provision that would have frozen minimum wages for time periods that were no less than two years. Another revision directs the DOL to use data from the U.S. Department of Agriculture’s (“USDA”) Farm Labor Survey rather than the Bureau of Labor Statistics’ Economic Cost Index to calculate wages for field and livestock workers.

“The department believes the proposed methodology will strike a reasonable balance between the statute’s competing goals of providing employers with an adequate legal supply of agricultural labor and protecting the wages and working conditions of workers in the United States similarly employed,” the DOL proposal stated.

The DOL first attempted to revamp its procedure for making wage calculations for H-2A workers in November 2020, announcing that field and livestock guest workers’ wage rates would be based on Bureau of Labor Statistics data rather than the Farm Labor Survey data on which the DOL had historically relied. In October 2020, the USDA announced that it would cease conducting the survey entirely.

The United Farm Workers union filed separate lawsuits against the DOL and the USDA in California federal court, challenging the DOL’s decisions to stop collecting the farm labor data and change the way it recalculates wage rates. The farmworkers’ union claims that the new formula would have led to lower, stagnated wages.

In October 2020, a California district judge ordered the USDA to resume conducting the survey. The court found that the federal government failed to abide by the Administrative Procedure Act’s rulemaking procedures when canceling the survey. Two months later, another federal district judge blocked the DOL from implementing the final rule. This prohibition was based on a finding that the department failed to justify the freezing of wages, as well as its digression from the department’s historical use of Farm Labor Survey data.

The new DOL proposal would bifurcate H-2A workers into two groups, with multiple field and livestock worker categories subject to the same single hourly wage rate based on USDA data.

For all other ancillary job opportunities to which these field and livestock worker categories do not apply, the DOL would adopt occupation-specific approaches to calculating hourly wages, based on Occupational Employment and Wage Statistics data collected by the Bureau of Labor Statistics.

The new proposal may also result from DOL awareness and concern that guest workers are being paid less than the industry’s prevailing wage rate. However, the proposed solution could lead to further instability, depending on workers’ job descriptions and responsibilities. Employers have historically complained that the wage rate of guest workers’ is arbitrarily high. And that the USDA survey data used to calculate wages leads to sharp increases as high as 20% in some regions of the country.

Industry attorney Kristi Boswell stated: “You will have the state workforce agency making determinations or the Department of Labor making determinations on these applications. You may [have] one worker whose primary duties are farm work, but maybe they do another task moving equipment or moving a truck, and all of a sudden they’re now in the higher wage category.”

But the DOL defended its decision to rely on the data in the proposed rule. “​​The concerns about [adverse effect wage rate] increases also appear overstated when considering long-term historical trends in agricultural worker wages and the agricultural labor market,” the DOL said. “Despite higher-than-average wage increases in some recent years, farmworkers remain among the lowest-paid workers in the United States,” the department said.

Bruce Goldstein, president of Farmworker Justice, stated that the proposed rule is a welcome return to the approach taken in years preceding the Trump administration’s attempted rule change. “The Biden administration’s proposed rule would continue the long history of using the USDA wage findings for most farmworker jobs,” Goldstein said, describing the bifurcation of ancillary jobs as “likely helpful.”

The DOL has provided the public with a comment period on the proposed rule change that extends to January 31, 2022.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.

The following two tabs change content below.

Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.