DOL Changes AEWR Methodology

Last week, the Department of Labor published an Interim Final Rule, better known as an IFR, revising the methodology for determining the H-2A Adverse Effect Wage Rate.  That new rule will result in lower AEWR for each of all Northwest H-2A workers; with rates dropping around $1.80 an hour in Idaho, $2.10 in Oregon and nearly $2.50 an hour in Washington.

"Farmers and ranchers in Central Washington have been at a disadvantage for years due to high wages in the H-2A program," said central Washington Representitive Dan Newhouse. "The new AEWR methodology from the Department of Labor will allow employers to pay workers at a competitive rate that is commensurate with their work and experience. This will save employers who utilize the H-2A program billions of dollars per year in costs and deliver much needed relief to producers who have been strained by workforce costs.

"I want to thank my former House colleague and current Secretary of Labor Lori Chavez-DeRemer for her decisive action," Newhouse continued.

Established Workers Keep Their Old Rate

The new methodology applies to new contracts filed after October 2nd.  Workers currently in the U.S. under existing H-2A contracts must continue to receive their current wage rates as detailed in the job order.

Below are skill level I and II AEWRs for employees who fall within the “big five” SOC codes under this IFR:   

Labor Costs Have Jumped 60%

“In less than three years, grower prices for apples have fallen 28%, while labor costs over that time have risen 9 percent, and 60% over the last decade,” said Jim Bair, President and CEO of the U.S. Apple Association. “The economic strain of that picture is seen in the thousands of growers that are just barely hanging onto their farms, many of which have been passed down through generations.”

The proposed H-2A changes reflect many of the reforms USApple has long advocated for, including a more market-based system that discontinues use of the flawed Farm Labor Survey to underpin the AEWR.

“The Administration’s action should help anchor the AEWR to market reality, providing much-needed relief to growers who have seen rising labor costs consume their returns, in many cases pushing them into the red,” said Bair. “We are grateful to the Department of Labor and the Administration for advancing policies that reflect business realities for apple growers.”

The specific impact for apple growers will depend on job classifications and state-by-state wage levels. USApple and its coalition partners are closely reviewing those details.

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