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Growers Lose Case Over Wage Hikes for Agricultural Guestworkers

March 19, 2019, 1:13 PM

A group of growers unhappy with the hike in wages that must be paid to agricultural guestworkers this year have lost their court bid to overturn that requirement.

A federal judge in Washington March 18 said the growers’ underlying beef wasn’t with the 2019 wage rates themselves, but rather the Labor Department’s methodology for calculating them. The DOL adopted that methodology in a 2010 regulation, meaning the growers’ January 2019 lawsuit was filed too late.

The National Council of Agricultural Employers and Nevada-based Peri & Sons Farms said the adverse effect wage rates for 2019 were so high that they will threaten the viability of farming businesses in the U.S.

Peri & Sons, for example, estimated an increase in labor costs from $45 million in 2018 to $49 million in 2019, causing a net loss of $3 million this year.

The United Farm Workers and three individual farmworkers intervened in the case to argue in favor of the increased wages.

Greater H-2A Use

The DOL updates the adverse effect wage rate, or AEWR, annually as a means of preventing the employment of foreign guestworkers from harming the wages and job opportunities of U.S. workers.

It’s taken on added significance as more and more growers turn to the H-2A program as the supply of undocumented farm workers—traditionally a large portion of the agricultural workforce—continues to dry up.

In 2016, there were an estimated 10.7 million undocumented immigrants in the U.S., down from a peak of 12.2 million in 2007, according to the Pew Research Center. That drop is attributable mainly to a decline in new undocumented immigrants coming into the U.S., primarily those from Mexico.

The percentage of the farm labor force made up of undocumented immigrants went from 55 percent to 47 percent between 2000 and 2014, according to the Migration Policy Institute.

At the same time, H-2A labor certification applications in fiscal year 2018 went up by 16.7 percent from FY 2017. Applications for the first quarter of FY 2019 were up 22.7 percent from the first quarter of FY 2018.

Stems From 2010 Regulation

The crux of the growers’ lawsuit is that the DOL should have determined first whether H-2A workers were hurting U.S. workers’ wages before hiking the AEWR by as much as 23 percent in some states.

But the DOL’s decision to calculate the AEWR without that determination was made in its 2010 regulation, said Judge Timothy J. Kelly of the U.S. District Court for the District of Columbia.

The deadline for filing a lawsuit was March 15, 2016, he said. This case was filed Jan. 7, 2019.

Meanwhile, a public advocacy group is pursuing litigation against the DOL that argues the agency is allowing growers to pay workers less than the prevailing wage in some areas.

The agency is allowing some growers to hire H-2A workers in areas where a wage survey hasn’t been conducted or where a survey was conducted but no finding was made as to the prevailing wage, the lawsuit says.

The case is Peri & Sons Farms, Inc. v. Acosta, 2019 BL 92021, D.D.C., No. 1:19-cv-00034, 3/18/19.

To contact the reporter on this story: Laura D. Francis in Washington at lfrancis@bloomberglaw.com

To contact the editor responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com