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Summary

The H-2A temporary agricultural worker program allows American agricultural employers to hire foreign workers to perform full-time temporary or seasonal work on farms in the United States. H-2A workers must be paid at least the highest of the adverse effect wage rate (AEWR), the prevailing wage, or the applicable federal or state minimum wage. The prevailing wage is based on state surveys funded by the U.S. Department of Labor (DOL). The AEWR is based on wage data from the Farm Labor Survey (FLS), which is conducted by the U.S. Department of Agriculture. On February 13, 2008, the U.S. Department of Labor (DOL) published proposed regulations that would change the way the AEWR is determined. Final action on the proposed rule is expected in November 2008. Under the rule, the AEWR would be calculated from the Occupational Employment Statistics (OES) survey, which is conducted by the Bureau of Labor Statistics of the U.S. Department of Labor and state workforce agencies. Wages from the OES survey are available at four levels of skill and experience. The four wage levels are called Level I, Level II, Level III, and Level IV. Under the proposed rule, the AEWR could not be less than $7.25 an hour. The FLS and OES surveys cover different farm-related employers and provide different levels of detail by occupation and geographic area. An issue for Congress is the impact of the proposed change on the wages and employment of unauthorized farmworkers, H-2A workers, and U.S. workers. Generally speaking, under the proposed rule, in most areas both the minimum AEWR of $7.25 and the OES Level I wage (for entry level workers) would be lower than the current AEWR. In some areas, however, the Level I wage would be higher than the current AEWR. On the other hand, in most areas, the OES Level IV wage (for workers with management or supervisory duties), especially for livestock workers and farm equipment operators, would be higher than the current AEWR. Compared to the current AEWR, the proposed AEWR is more likely to be lower for crop workers than for livestock workers or farm equipment operators. In some areas, the prevailing wage could become the highest of the AEWR, prevailing wage, or minimum wage. In some areas in some states, the state minimum wage could become the highest of the three wage rates. In areas where the proposed rule would lower the wages that employers must offer H-2A workers, the rule should create an incentive for employers to hire more H-2A, as opposed to unauthorized, workers. In areas where the rule would increase the wages that employers must offer H-2A workers, the rule would probably not create an incentive to hire more H-2A workers. On the other hand, in areas where the rule would increase the wages of H-2A workers, it should create an incentive for employers to hire more U.S. workers. However, in areas where the rule would lower the wages that employers must offer H-2A workers, it could lower the wages employers offer U.S. workers. This report will be updated as issues warrant.

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