The Department of Labor (DOL) recently issued an Interim Final Rule (IFR) that significantly revises the methodology for determining the Adverse Effect Wage Rates (AEWRs) for H-2A nonimmigrant workers in non-range occupations across the United States. This rule aims to ensure fair compensation for temporary foreign workers while safeguarding the wages of U.S. workers in similar roles. Here’s a breakdown of the key provisions and implications of this new rule:
Key Provisions of the Final Rule
- Revised Wage Determination Methodology
- The new rule introduces a state-specific approach to calculating AEWRs, utilizing wage data reported for each U.S. state and territory. This replaces the previous methodology that relied on a single average gross hourly wage for most H-2A jobs.
- Skill-Based Wage Levels
- The rule establishes two distinct wage levels: Skill Level I (Entry-Level) and Skill Level II (Experience-Level). This differentiation aims to more accurately reflect the qualifications and experience required for various agricultural roles.
- Required Wage Rates
- Under the rule, employers must pay the higher of the following wage rates to H-2A workers:
- The Adverse Effect Wage Rate (AEWR): This is determined based on state-specific data and varies by skill level (Skill Level I for entry-level and Skill Level II for experience-level positions).
- The Wage Rate Listed in the Certified Job Order: If the wage rate specified in the currently certified job order is higher than the applicable AEWR, the employer must continue to pay this higher rate for the duration of the work contract.
- Other Applicable Wage Rates: If there are other applicable wage rates, such as the prevailing wage rate, the agreed-upon collective bargaining wage, the federal minimum wage or the state minimum wage, the employer must pay the highest of these rates.
- Housing Adjustments
- Employers providing housing at no cost to H-2A workers can apply a downward compensation adjustment to the AEWRs. This adjustment varies by state, allowing employers to deduct a specified amount from the required wage rate.
- Effective Date and Compliance
- The new wage rates are effective as of Oct. 2, 2025. Employers must adhere to the wage rate specified in the currently certified job order if it is higher than the newly published AEWR.
Implications for Employers and Workers
- For Employers: The revised methodology provides a more precise framework for determining wage obligations, potentially reducing labor costs while ensuring compliance with federal regulations. Employers must carefully assess job qualifications to determine the appropriate skill level and corresponding wage rate.
- For H-2A Workers: The rule aims to protect the wages of both U.S. and foreign workers by ensuring compensation reflects the skills and experience required for the job. However, some current H-2A workers may experience wage reductions due to lower prevailing wage rates.
- For U.S. Workers: By aligning H-2A wages more closely with local labor market conditions, the rule seeks to prevent adverse effects on the wages of U.S. workers similarly employed in the agricultural sector.
Conclusion
The DOL’s Interim Final Rule represents a significant shift in the administration of the H-2A program, emphasizing a more localized and skill-based approach to wage determination. While the rule aims to balance the interests of employers, foreign workers and domestic labor, it also underscores the importance of compliance and careful planning for agricultural employers navigating these changes.
