FINALLY, A REAL BREAK FOR AMERICAN AGRICULTURE By Jason Resnick, Senior Vice President and General Counsel
For years, the Adverse Effect Wage Rate (AEWR) has been the single biggest policy lever driving H-2A labor costs up while squeezing growers’ margins. Since 2005, the average AEWR has roughly doubled. That run-up was untethered from job requirements and blind to the value of housing that H-2A employers are legally obligated to provide. The Department of Labor’s (DOL) new interim final rule, effective Oct. 2, 2025, finally fixes both problems, and it deserves praise. This is the most important positive correction to H-2A economics in a generation. If it holds, it will restore balance to a system that was pricing out lawful, domestic food production. The rule’s core ideas are simple and sensible. First, the new rule uses Bureau of Labor Statistics’ Occupational Employment and Wage Statistics (OEWS) data and sets wages in two skill tiers tied to the duties and qualifications in the actual job offer. In California, for example, most farm jobs will slot into Level 1 at $16.45 or Level 2 at $18.71 per hour. Add the new $3.00 housing adjustment (more on that below) and the wage for most H-2A field jobs lands at the state minimum wage of $16.90, down from $19.97 in 2025. Occupational titles that fall outside the “big five” (formerly “big six”) like drivers and mechanics, will generally price a bit higher under Level 2. But pay will be tied to real job content, not to a stray high-skill task, and fixes the old “highest duty wins” distortion. The new rule uses a “majority of the workdays” test, which still needs to be fleshed out. Second, for the first time, the wage calculation recognizes a fact that is well understood, but not heretofore appreciated: H-2A employers build, maintain or rent housing that would cost workers real dollars in the market. Treating that zero-cost benefit as worth nothing never made sense. The new housing adjustment factors that value into what employers must pay in cash when housing is provided to H-2A workers. Wages must still clear statutory protections, and workers remain whole. But the rule stops pretending that a free bed, utilities and transportation to work aren’t valuable. These two changes move AEWRs toward what the law actually requires: preventing adverse effect on the wages of U.S. workers similarly employed, while keeping the program usable. Courts have long recognized that DOL has room to choose a reasonable methodology to meet that mandate. The new rule sticks to reliable labor- market data, ties pay to actual job content and accounts
for non-wage benefits that the program itself mandates. DOL is on solid legal ground. Critics will say this is a giveaway to employers. It is not. It is a correction to a policy that had drifted far from reality. When a wage floor increases over 21 percent in five years with no link to skills or total compensation, the result is not fairness. It is consolidation, fewer domestic acres and more imports. Rebalancing AEWRs toward skills and total comp pushes in the other direction. It keeps jobs in the U.S., supports farm communities and protects consumers from higher prices caused by policy, not by productivity. Labor advocates will likely sue to block the rule. We have seen this movie. Litigation followed the last several attempts to rationalize AEWRs. The difference this time is the Department’s footing. By choosing a transparent, skill-based structure grounded in OEWS data, and by acknowledging the value of employer-provided housing, DOL is executing the discretion Congress gave it to prevent adverse effect without destroying program usability. That is the right reading of the statute, and it is consistent with modern administrative law. Western Growers will join industry allies to help defend the rule in court. Credit where credit is due. The Administration heard industry’s concerns and took a tough, politically noisy problem and produced a workable fix. It targeted the right pressure points, kept worker protections intact and gave growers a fighting chance to compete with imports that do not face American labor standards. This is not an academic rewrite. It is a practical re-set that can halt the offshoring of our produce aisle. And when the nation’s farm workforce policy aligns with economic reality, consumers win at the checkout line. Now the job is to keep it. The rule needs a strong legal defense and prompt, predictable implementation. Western Growers stands ready to support both.
"This is the most important positive correction to H-2A economics in a generation."
6 Western Grower & Shipper | www.wga.com November | December 2025
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