The USDA recently published the results of the National Ag Statistics Service (NASS) Farm Labor Survey (FLS). Generally, the annual FLS is used to establish the Adverse Effect Wage Rate (AEWR) for H2A workers for the following year. The law that established the H-2A program states that the importation of foreign workers shall not have an ‘adverse effect’ on local wages. Domestic wages cannot be reduced by using cheaper foreign workers. This is why the AEWR was established.
This year’s FLS shows an increase in wages for TX, NM, and KS of about 5% (TX current $14.87, proposed $15.55; NM current $15.62, proposed $16.32; KS current $17.33, proposed $18.32). The new AEWR wages will begin when the Dept of Labor (DOL) publishes them in the Federal Register. This will likely be at the end of the year. We will send an alert when we see them published.
The FLS is conducted annually and is thought to be a good representation of the ag industry. However, there are issues using the FLS wages. The FLS wages do not reflect the true labor costs on ag employers. It does not distinguish between employers using H2A workers and those that do not. It also does not account for the added costs of using H2A workers (i.e. housing, meals, travel to and from the employee’s country, etc.). To compound issues with H2A wages, the DOL recently instituted a new rule potentially changing the way H2A wages are computed. Depending on how the Job Order is described, some orders may require use of the AEWR, and some may require use of the Occupational Employment Wage Survey (OEWS) wages. The wages on the OEWS survey are noticeably higher than the AEWR wages. A lawsuit was filed against the DOL on this new H2A Wages rule earlier this year and it is currently being litigated.
As always, we will keep you updated as more information is released. Please contact us if you have questions about this, or any other issues affecting your operation.