The U.S. Department of Labor (DOL) recently announced its plan to update how Adverse Effect Wage Rates (AEWRs) are calculated for H-2A workers in some highly skilled job categories.

The AEWR is currently set by DOL annually using the Farm Labor Survey (FLS). After March 30, the AEWR will be set using a combination of Farm Labor Survey data and Occupational Employment and Wage Statistics (OEWS) data. The change reflects six wage classifications not included in the FLS: graders and sorters, agricultural products; agricultural equipment operators; farmworkers and laborers, Crop, Nursery, and Greenhouse; farmworkers, Farm, Ranch, and Aquacultural Animals; packers and packagers, Hand; agricultural workers, All Other.

Agricultural employers will have to be aware of the changes to wage rules because of the new way in which wages are awarded. If there are classifications of farm tasks performed by the same person in both the AEWR and OEWS systems, the employer must pay whichever classification is higher to their employees. For example, if a farmworker also does light truck driving for the farm, the farm will need to determine which wage classification system sets a higher wage rate and pay the higher of the two.

Both the FLS and OEWS have been held up as a “fair” way to set wages for each state in the U.S. However, there are some significant flaws in the federal reliance on the FLS and OEWS. The most obvious being not all states participate in these wage surveys, which skews the data.

The AEWR in Washington state has risen more than 30 percent since 2017 and shows no signs of stopping. Washington state’s 2023 AEWR is $17.97 an hour but it is a de facto minimum wage, not the actual wage being paid to our farmworker community. On average, farmworkers in Washington state are being paid $20 an hour for their work.

Additionally, the skewed data means there is a disparity of about $5 an hour between the highest and lowest AEWR rates among the 50 states. The lowest 2023 AEWR – $13.67 an hour – is being paid in southeastern states. The highest AEWR for 2023 is in California, where employers are paying $18.65 an hour.

Farms, like all other businesses and households, are not recession-proof. The current cost of operating a farm in the United States has increased by 50 percent year-over-year and that trend seems to be continuing. 

If DOL really wants to fix the AEWR so it is reasonable and effective for both employees and employers, the agency will have to devise a better system that addresses on-the-ground conditions in each state and the cost of living associated with those states. More specifically, each state must encourage better participation in wage data collection.

The FLS is based on 18,000 surveys for the more than 2 million farms in the United States. To find data that is statistically significant and covers each state, there should be a tiered reporting process with every state in the U.S. collecting data that is statistically significant in their state. That data should then be collected with the aggregate being sent to DOL to help inform the AEWR rate.