DOL Reduces Wages for H-2A Workers

There are two major options to supply Americans with fresh fruits and vegetables:

• Produce grown in the U.S. harvested with machines or migrant workers, or
• Produce imported from lower-wage countries.

The U.S. imports 60 percent of its fresh fruit and 35 percent of its fresh vegetables for reasons that range from climate (the U.S. does not produce tropical fruits such as bananas) to lower labor costs (Mexican farm wages are a tenth of U.S. levels).

The Make America Healthy Again movement is increasing the demand for fresh produce, and suppliers are responding with MMI: more Machines, more Migrants, and more Imports. Laser-equipped robots have replaced hand weeders in many crops, H-2A guestworkers pick most Florida oranges and Washington apples, and Peru has emerged as a major supplier of avocados, blueberries, and table grapes.

The Trump administration has sent conflicting signals about the desirability of machines, migrants, and imports. President Trump in June 2025 wrote that “Our great Farmers and people in the Hotel and Leisure business have been stating that our very aggressive policy on immigration is taking very good, long-time workers away from them, with those jobs being almost impossible to replace.” After a short-lived suggestion to reduce immigration enforcement in agriculture, Trump said: “We can’t let our farmers not have anybody,” and created a DHS-DOL-USDA task force to deal with farm labor.

October 2025 IFR

On October 2, 2025, the U.S. Department of Labor issued an Interim Final Rule (IFR) to reduce the wages of H-2A workers. U.S. farm employers may hire H-2A migrant workers if they try and fail to recruit U.S. workers while offering at least a higher-than-minimum Adverse Effect Wage Rate (AEWR) that ranged in 2025 from $15 an hour in southeastern states to $20 an hour in California. The purpose of AEWR wages is to protect U.S. workers from any adverse effects of H-2A workers.

The IFR reduces the AEWR in several ways, including by changing the database on which the AEWR is based and introducing different AEWRs by skill and for H-2A workers who receive housing. Since 1987, the AEWR for farm jobs has almost always been the average hourly earnings of field and livestock workers as determined by USDA’s 100-year-old Farm Labor Survey (FLS) for the year before. USDA cancelled the FLS in August 2025 and DOL responded by switching to another database, the Occupational Employment and Wage Statistics (OEWS) survey, to set and adjust AEWRs.

DOL predicts that the H-2A program will expand to over 500,000 by 2030, exceeding the peak of the Bracero program in the mid-1950s, when agriculture was far less mechanized.

The switch from the FLS to the OEWS creates a problem: USDA surveys only farm employers, while the OEWS surveys only nonfarm employers. This means that AEWRs for farm occupations in 2026 will be based on the wages of about a million workers who are brought to farms by nonfarm businesses, including labor contractors, pesticide applicators, and workers in fruit warehouses. In fact, two-thirds of the workers in the Big 5 “farm occupations” whose wages will be used to set AEWRs for 2026 are in SOC 53-7064, hand packers and packagers, and most are employed in nonfarm warehouses such as Amazon rather than packing apples.

The second major change is different AEWRs for jobs that require different skills. In 2025, there was one AEWR per state, and all H-2A workers and U.S. workers employed alongside them had to be paid the same wage. In 2026, there will be three AEWRs:

• Skill Level 1 AEWR for jobs that require little or no experience;
• Skill Level 2 AEWR for jobs that require at least three months experience; and
• An adverse compensation adjustment (ACA) AEWR paid to H-2A workers who receive free employer-provided housing.

DOL expects 92 percent of H-2A jobs to be Skill 1 and predicts that the H-2A program will expand from 400,000 today to over 500,000 by 2030. The Bracero program reached 455,000 jobs at its peak in the mid-1950s, when agriculture was far less mechanized.

The public comment period for the AEWR rule ends December 1.

Implications

Farmers will be able to pay lower wages to H-2A workers in 2026, $8 to $17 an hour rather than the $15 to $20 an hour required in 2025. DOL expects the H-2A wage bill to drop from $6.6 billion in 2025 to $5 billion in 2026. Wage savings may be greater if farmers also reduce wages for the 80 percent of crop workers who are settled in the U.S., including up to 40 percent who are unauthorized workers.

Farm employers are considering how to respond to the new AEWR regulations. One source of uncertainty is whether the IFR will survive court challenges. An earlier 2020 USDA effort to cancel the FLS resulted in a court order to resume the FLS so that DOL could continue to set AEWRs using FLS data.

A second question is whether farm employers will try to reduce wages to the lowest allowable level, likely the state’s minimum wage, or try to argue that federal regulations pre-empt local laws and pay less than a state’s minimum wage. California has announced that farm employers will have to pay the state minimum wage of $16.90 even though the ACA Skill 1 AEWR is $13.45. In states such as Louisiana, where the minimum wage is $7.25, farmers may pay the ACA Skill 1 AEWR of $8.24 an hour, which is four to five times higher than Mexican farm worker wages.

The new wage regulations may have the effect of expanding the number of guestworkers rather than promoting the mechanization necessary for long-term competitiveness.

A third question is what happens to worker morale if wages are reduced. Consumer prices have been rising, so many workers expect their wages to increase each year. If AEWR reductions also reduce wages for U.S. farm workers, they may exit farm work faster, increasing the employment of H-2A workers and reducing incentives to adopt labor-saving machines. Farms with U.S. and H-2A workers may find it difficult to manage workforces when workers doing the same job are paid different wages.

Some farm employers are likely to restructure work in ways that separate workers who are paid different wages by outsourcing work to the farm labor contractors who already bring 45 percent of H-2A workers to farms. However, many labor contractors violate labor laws, which means that the new AEWR regulations may increase employment among the type of employer most likely to violate labor, immigration, tax, and other laws.

If the new AEWR regulations save employers money, their focus may shift from investing in machines to replace workers to investing in housing for H-2A guestworkers. In the mid-1950s, the immigration enforcement program Operation Wetback was accompanied by relaxed Bracero regulations that doubled the number of Braceros in a few years. The October 2025 AEWR regulations may have a similar effect of expanding the number of guestworkers rather than promoting the mechanization necessary for long-term competitiveness.

(See a more detailed analysis at Rural Migration News.)