By: Rebecca A. Hause-Schultz and Trevor White
On November 2, 2020, the U.S. Department of Labor (“DOL”) published a new rule on how the Adverse Effect Wage Rate (“AEWR”) will be calculated. Under current DOL regulations, employers who employ foreign workers under the H-2A program are required to pay a wage that is the highest of the AEWR, prevailing wage, agreed-upon collective bargaining wage, federal minimum wage, or state minimum wage.
The United States Department of Agriculture (“USDA”) reports that the new rule will improve the consistency of the AEWR, establishing better stability and predictability for employers in complying with wage obligations. You can read the USDA’s press release here.
Minimum pay rates for most agricultural guest workers will remain at this year’s rate through 2022, which were calculated by the 2019 USDA Farm Labor Survey. Afterwards, the rate is to be based on a national average Employment Cost Index.
The DOL has posted a helpful FAQ page for employers regarding the implementation of this new rule which can be found here.
This development follows many years of conflict regarding how the AEWR should be calculated. Although the USDA announced it would no longer conduct the Farm Labor Survey, on October 28, the Eastern District of California issued an Order which requires the USDA to move forward with the Survey. The injunction was sought by farmworker advocacy groups including the United Farm Workers and is available here.
COUNSEL TO MANAGEMENT:
H-2A labor remains a hot button issue—and litigation surrounding this change will undoubtedly continue. Be watchful for future e-blasts with updates on this new rule. If you have any questions about the proper wage rate for H-2A employees, contact the experts at The Saqui Law Group.
Disclaimer: The goal of this article is to provide employers with current labor and employment law information. The contents should neither be interpreted as, nor construed as legal advice or opinion. The reader should consult with The Saqui Law Group at (916)782-8555 or help@laborcounselors.com for individual responses to questions or concerns regarding any given situation.
