Federal Court Halts Labor Department Move on H-2A Wage Freeze

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A federal court has granted a national farmworkers group a preliminary injunction to stop the U.S. Labor Department (DOL) from freezing wages under the H-2A agricultural guest-worker program. The U.S. District Court for the District of Eastern California said in its order the plaintiffs are likely to succeed on the merits of their case.

At the beginning of November, a DOL regulation froze wages for 2021 and 2022 at the 2020 adverse effect wage rate, or an average in the United States of $13.99 an hour in 2020. In a Nov. 2 statement, U.S. Secretary of Agriculture Sonny Perdue touted the rule as a way for farmers to save costs. However, the United Farm Workers and the UFW Foundation filed a lawsuit in the U.S. District Court for the Eastern District of California, alleging the DOL rule would lead to substantial wage losses to ag workers.

In the order, the court cited a similar case ruled on by the U.S. Court of Appeals for the District of Columbia Circuit.

“Defendants assert in this case, and the court agrees, that the INA (Immigration and Nationality Act of 1952) does not prescribe the methodology for calculating the AEWR (adverse effect wage rate) — or even require that the DOL set an AEWR — but instead broadly delegates to the DOL the responsibility to craft a mechanism to certify that hiring H-2A workers ‘will not adversely affect the wages of workers in the United States similarly employed.'”

“Here, the court finds that plaintiffs have demonstrated a likelihood of success on the merits of this claim,” the court said in its ruling.

The court said it agrees with the plaintiffs in that the final rule “severs the relationship between the AEWR and current farm labor market conditions; freezes the AEWRs for two years at 2020 levels, even though recent trends establish that agricultural wages have been rising and will likely continue to do so; then lifts the wage freeze in 2023 based on the ECI, a generic index of wages from across the economy, without ever compensating for the wage growth lost during the 2-year wage freeze.”

The court ordered both parties to submit a proposed order within 14 days that includes deadlines for the Department of Labor to set the 2021 adverse effect wage rate.

United Farm Workers argued in its lawsuit that the wage freeze would cause workers to be paid more than 4% less on average than they would have otherwise in the current regulation. The lawsuit alleged California farmworkers would be paid about $1 less per hour in the final rule compared to the current methodology, which would lead to about $170 in lost wages per month.

“Indeed, DOL itself estimated that the methodological change would transfer more than $1.6 billion in wages from H-2A farmworkers to agricultural employers over the next 10 years,” the lawsuit said, “with average losses to these foreign guest workers totaling $167.76 million per year.”

The H-2A agricultural guest worker program allows employers to hire foreign workers on temporary visas for seasonal jobs. According to the United Farm Workers, the number of H-2A visas approved increased from about 200,000 in 2019 to more than 275,000 in 2020.

Current H-2A law prohibits the Department of Labor from approving employers’ applications for guest workers if the wage rates offered would adversely affect the job opportunities or wage rates of U.S. farmworkers.

The lawsuit alleged that the DOL’s new regulation violates the federal Administrative Procedure Act in several ways, including by failing to comply with the H-2A prohibition against adverse effects to farmworkers’ wages, arbitrarily and capriciously selecting mechanisms that bear no relation to the farm labor market, and failing to give the public notice and an opportunity for comment on the wage freeze.

The lawsuit asked for an injunction, preventing the DOL from implementing the rule, a vacating of the rule and declaring it is unlawful for violating the Administrative Procedure Act.

 

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DTN – 2020


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