[Federal Register Volume 88, Number 39 (Tuesday, February 28, 2023)]
[Rules and Regulations]
[Pages 12760-12802]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-03756]
[[Page 12759]]
Vol. 88
Tuesday,
No. 39
February 28, 2023
Part III
Department of Labor
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Employment and Training Administration
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20 CFR Part 655
Adverse Effect Wage Rate Methodology for the Temporary Employment of
H-2A Nonimmigrants in Non-Range Occupations in the United States; Final
Rule
Federal Register / Vol. 88, No. 39 / Tuesday, February 28, 2023 /
Rules and Regulations
[[Page 12760]]
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DEPARTMENT OF LABOR
Employment and Training Administration
20 CFR Part 655
[DOL Docket No. ETA-2021-0006]
RIN 1205-AC05
Adverse Effect Wage Rate Methodology for the Temporary Employment
of H-2A Nonimmigrants in Non-Range Occupations in the United States
AGENCY: Employment and Training Administration, Department of Labor.
ACTION: Final rule.
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SUMMARY: The Department of Labor (Department or DOL) is amending its
regulations governing the certification of agricultural labor or
services to be performed by temporary foreign workers in H-2A
nonimmigrant status (H-2A workers). Specifically, the Department is
revising the methodology by which it determines the hourly Adverse
Effect Wage Rates (AEWRs) for non-range occupations (i.e., all
occupations other than herding and production of livestock on the
range) using a combination of wage data reported by the U.S. Department
of Agriculture's (USDA) Farm Labor Reports (better known as the Farm
Labor Survey, or FLS), and the Department's Bureau of Labor Statistics
(BLS) Occupational Employment and Wage Statistics (OEWS) survey,
formerly the Occupational Employment Statistics (OES) survey prior to
March 31, 2021. For the vast majority of H-2A job opportunities
represented by the six Standard Occupational Classification (SOC) codes
comprising the field and livestock worker (combined) wages reported by
USDA, the Department will continue to rely on the FLS to establish the
AEWRs where a wage is reported by the FLS. For all other SOC codes, the
Department will use the OEWS survey to establish the AEWRs for each SOC
code. Additionally, in circumstances in which the FLS does not report a
wage for the field and livestock workers (combined) occupational group
in a particular State or region, the Department will use the OEWS
survey to determine the AEWR for that occupational group. These
regulatory changes are consistent with the Secretary of Labor's
(Secretary) statutory responsibility to certify that the employment of
H-2A workers will not adversely affect the wages and working conditions
of workers in the United States similarly employed. The Department
believes this methodology strikes a reasonable balance between the
statute's competing goals of providing employers with an adequate
supply of legal agricultural labor and protecting the wages and working
conditions of workers in the United States similarly employed.
DATES: This final rule is effective on March 30, 2023.
FOR FURTHER INFORMATION CONTACT: Brian Pasternak, Administrator, Office
of Foreign Labor Certification, Employment and Training Administration,
U.S. Department of Labor, 200 Constitution Avenue NW, Room N-5311,
Washington, DC 20210, telephone: (202) 693-8200 (this is not a toll-
free number). Individuals with hearing or speech impairments may access
the telephone numbers above via TTY/TDD by calling the toll-free
Federal Information Relay Service at 1 (877) 889-5627.
SUPPLEMENTARY INFORMATION:
Preamble Table of Contents
I. Background
A. Legal Authority
B. Purpose for the Regulatory Action
C. Recent Rulemaking
D. Implementation of This Final Rule
II. Summary of Proposed Changes to the AEWR Methodology and the
Changes Adopted in This Final Rule
A. General Overview of Comments
B. Definition of AEWR
C. AEWR Methodology
D. Out-of-Scope Comments on the Proposed Rule
III. Administrative Information
A. Executive Order 12866: Regulatory Planning and Review; and
Executive Order 13563: Improving Regulation and Regulatory Review
B. Regulatory Flexibility Analysis and Small Business Regulatory
Enforcement Fairness Act and Executive Order 13272: Proper
Consideration of Small Entities in Agency Rulemaking
Table of Acronyms and Abbreviations
AEWR Adverse Effect Wage Rate
ALS Agricultural Labor Survey
ARIMA Autoregressive integrated moving average
ASB Agricultural Statistics Board
BLS Bureau of Labor Statistics
CFR Code of Federal Regulations
CO Certifying Officer
CPS Current Population Survey
CY calendar year
DOL U.S. Department of Labor
DWL deadweight loss
E.O. Executive Order
ECI Employment Cost Index
ETA Employment and Training Administration
FLR Farm Labor Report
FLS Farm Labor Survey
FY Fiscal Year
GVW Gross Vehicle Weight
H-2ALC H-2A Labor Contractor
INA Immigration and Nationality Act
IRCA Immigration Reform and Control Act of 1986
NAICS North American Industry Classification System
NASS National Agricultural Statistics Service
NPC National Processing Center
NPRM Notice of Proposed Rulemaking
O*NET Occupational Information Network
OES Occupational Employment Statistics
OEWS Occupational Employment and Wage Statistics
OFLC Office of Foreign Labor Certification
OIRA Office of Information and Regulatory Affairs
OMB Office of Management and Budget
Pub. L. Public Law
RFA Regulatory Flexibility Act of 1980
RIA Regulatory impact analysis
SBA Small Business Administration
SOC Standard Occupational Classification
Stat. U.S. Statutes at Large
SWA State Workforce Agency
U.S. United States
U.S.C. United States Code
USCIS U.S. Citizenship and Immigration Service
USDA U.S. Department of Agriculture
WHD Wage and Hour Division
I. Background
A. Legal Authority
The Immigration and Nationality Act (INA), as amended by the
Immigration Reform and Control Act of 1986 (IRCA), establishes an ``H-
2A'' nonimmigrant visa classification for a worker ``having a residence
in a foreign country which he has no intention of abandoning who is
coming temporarily to the United States to perform agricultural labor
or services . . . of a temporary or seasonal nature.'' 8 U.S.C.
1101(a)(15)(H)(ii)(a); see also 8 U.S.C. 1184(c)(1), 1188.\1\ Among
other things, a prospective H-2A employer must first apply to the
Secretary for a certification that (1) there are not sufficient workers
who are able, willing, and qualified, and who will be available at the
time and place needed to perform the labor or services involved in the
petition, and (2) the employment of the H-2A workers in such services
or labor will not adversely affect the wages and working conditions of
workers in the United States similarly employed. 8 U.S.C. 1188(a)(1).
The INA prohibits the Secretary from issuing this certification--known
as a ``temporary agricultural labor certification''--unless both of the
above-referenced conditions are met and none of the conditions in 8
U.S.C. 1188(b) apply concerning strikes or lock-outs, labor
certification program debarments, workers'
[[Page 12761]]
compensation assurances, and positive recruitment.
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\1\ For ease of reference, sections of the INA are referred to
by their corresponding section in the United States Code.
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The Secretary has delegated the authority to issue temporary
agricultural labor certifications to the Assistant Secretary,
Employment and Training Administration (ETA), who, in turn, has
delegated that authority to ETA's Office of Foreign Labor Certification
(OFLC).\2\ In addition, the Secretary has delegated to the
Administrator, Wage and Hour Division (WHD), the responsibility under
section 218(g)(2) of the INA, 8 U.S.C. 1188(g)(2), to ensure employer
compliance with the terms and conditions of employment under the H-2A
program.\3\ Since 1987, the Department has operated the H-2A temporary
agricultural labor certification program under regulations it
promulgated pursuant to the INA. The standards and procedures
applicable to the certification and employment of workers under the H-
2A program are found in 20 CFR part 655, subpart B, and 29 CFR part
501.
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\2\ See Secretary's Order 06-2010 (Oct. 20, 2010), 75 FR 66268
(Oct. 27, 2010); 20 CFR 655.101.
\3\ See Secretary's Order 01-2014 (Dec. 19, 2014), 79 FR 77527
(Dec. 24, 2014).
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When creating the H-2A visa classification, Congress charged the
Department with, among other things, regulating the employment of
nonimmigrant foreign workers in agriculture to guard against adverse
impact on the wages of agricultural workers in the United States
similarly employed. See 8 U.S.C. 1188(a)(1)(B). Congress, however, did
not ``define adverse effect and left it in the Department's discretion
how to ensure that the [employment] of farmworkers met the statutory
requirements.'' \4\ Thus, the Department has discretion to determine
the methodological approach that best allows it to meet its statutory
mandate.\5\ The INA ``requires that the Department serve the interests
of both farmworkers and growers--which are often in tension. That is
why Congress left it to [the Department's] judgment and expertise to
strike the balance.'' \6\
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\4\ AFL-CIO, et al. v. Dole, 923 F.2d 182, 184 (D.C. Cir. 1991).
\5\ United Farmworkers v. Solis, 697 F. Supp. 2d 5, 8-11 (D.D.C.
2010).
\6\ Dole, 923 F.2d ad 187.
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The AEWR is one of the primary ways the Department meets its
statutory obligation to certify that the employment of H-2A workers
will not have an adverse effect on the wages of agricultural workers in
the United States similarly employed, while ensuring that employers can
access legal agricultural labor. There is no statutory requirement that
the Department determine the AEWR at the highest conceivable point, nor
at the lowest, so long as it serves its purpose to guard against
adverse impact on the wages of agricultural workers in the United
States similarly employed.\7\ The Department also considers factors
relating to the sound administration of the H-2A program in deciding
how to determine the AEWR.
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\7\ See 68 FR 11,460, 11,464 (Apr. 9, 1987) (``[T]he labor
certification program is not the appropriate means to escalate
agricultural earnings above the adverse effect level or to set an
`attractive wage.''').
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B. Purpose for the Regulatory Action
The Department has determined this rulemaking is necessary to
ensure that the employment of H-2A foreign workers will not have an
adverse effect on the wages of agricultural workers in the United
States similarly employed. As discussed in the notice of proposed
rulemaking (NPRM) published on December 1, 2021, concerns about the
employment of foreign workers adversely affecting the wages of
agricultural workers in the United States similarly employed are
heightened in the H-2A program because the program involves an
especially vulnerable population.\8\ Setting the AEWR and requiring
employers who desire to employ H-2A foreign workers to offer,
advertise, and pay at least the AEWR when it is the highest applicable
wage is one of the primary regulatory controls the Department uses to
meet its statutory obligation to certify that the employment of H-2A
foreign workers will not have an adverse effect on the wages of
agricultural workers in the United States similarly employed.\9\ The
AEWR's role in the Department's administration of the H-2A program is
distinct from and complementary to local prevailing wage findings,
which are specific to a particular crop or agricultural activity. In
the absence of a local prevailing wage finding, or where there is a
local prevailing wage finding but that finding is lower than the
prevailing wage of workers performing similar work within an
occupational classification and broader geographic area (e.g.,
statewide or regional), the AEWR establishes a wage floor that serves
to prevent localized wage stagnation or depression relative to the
wages of workers similarly employed in areas and occupations in which
employers desire to employ H-2A workers.
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\8\ See Proposed Rule, Adverse Effect Wage Rate Methodology for
the Temporary Employment of H-2A Nonimmigrants in Non-Range
Occupations in the United States, 86 FR 68174, 68176 (Dec. 1, 2021)
(2021 AEWR NPRM).
\9\ An employer seeking H-2A workers is required to offer,
advertise in its recruitment, and agree to pay a wage that is at
least equal to the AEWR, the prevailing hourly wage rate, the
prevailing piece rate, the agreed-upon collective bargaining rate,
or the Federal or State minimum wage rate, in effect at the time
work is performed, whichever is highest, and pay at least that rate
to workers for every hour or portion thereof worked during a pay
period. 20 CFR 655.120(a), 655.121(l).
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The Department has expressed concerns with the current methodology
used to determine the AEWR in the H-2A program, which was set forth in
the 2010 Final Rule,\10\ and has engaged in rulemaking activities to
address its concerns.\11\ As discussed below regarding recent
rulemaking and related litigation, the Department determined that the
2010 Final Rule AEWR methodology does not adequately prevent adverse
effect on the wages of agricultural workers in the United States
similarly employed in two principal ways. First, the 2010 Final Rule
AEWR methodology uses Farm Labor Survey (FLS) wage data for field and
livestock workers (combined) to determine a single AEWR for all non-
range H-2A job opportunities in each State or region, including job
opportunities in Standard Occupational Classification (SOC) codes that
the FLS does not include in the field and livestock worker (combined)
data collection (e.g., supervisors, construction, logging, tractor-
trailer truck drivers). Not only is an AEWR determined under this
methodology not reflective of the wages of workers performing similar
work in those SOC codes, but the SOC codes not included in FLS field
and livestock worker (combined) data collection generally account for
more specialized or higher paid job opportunities. As a result, an AEWR
determined using FLS field and livestock worker (combined) data does
not adequately guard against adverse effect on the wages of
agricultural workers similarly employed in the United States in these
SOC codes. Second, the 2010 Final Rule AEWR methodology does not enable
the Department to determine an AEWR for all geographic areas in which
employers may seek to employ H-2A workers (e.g., Alaska or Puerto Rico)
due to FLS' data collection methodology and procedures.\12\ Although
the Department
[[Page 12762]]
requires consideration of several wage sources other than the AEWR
(e.g., local prevailing wage finding, State or Federal minimum wages)
to determine the minimum wage rate an employer must offer, advertise in
its recruitment, and pay covered workers, not all of those wage sources
are available or applicable to H-2A applications in all circumstances
(e.g., a CBA or a local prevailing wage finding). Regardless of the
availability or applicability of other wage sources, the AEWR currently
serves as a primary wage source to protect against adverse effect
relative to the wages of workers similarly employed in occupations and
geographic areas included in FLS data collection. However, workers in
geographic areas not included in FLS data collection procedures do not
have an AEWR's protection against adverse effect.
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\10\ Final Rule, Temporary Agricultural Employment of H-2A
Aliens in the United States, 75 FR 6884 (Feb. 12, 2010) (2010 Final
Rule).
\11\ See, e.g., Proposed Rule, Temporary Agricultural Employment
of H-2A Nonimmigrants in the United States, 84 FR 36168, 36171 (July
26, 2019) (2019 NPRM); 2020 AEWR Final Rule, Adverse Effect Wage
Rate Methodology for the Temporary Employment of H-2A Nonimmigrants
in Non-Range Occupations in the United States, 85 FR 70445, 70447-
70465 (Nov. 5, 2020) (2020 AEWR Final Rule).
\12\ USDA's National Agricultural Statistics Service (NASS)
publishes Farm Labor Methodology and Quality Measures, a document
that describes the methodology and quality measures used for the
FLS. Most recently updated on May 25, 2022, this document may be
accessed at https://www.nass.usda.gov/Publications/Methodology_and_Data_Quality/Farm_Labor/05_2022/fmlaqm22.pdf.
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To address these concerns, this rule revises the methodology by
which the Department determines the hourly AEWRs for non-range
occupations (i.e., all occupations other than herding and production of
livestock on the range).\13\ Using a combination of wage data reported
by the USDA FLS and the Department's BLS OEWS survey, the methodology
adopted in this final rule enables the Department to establish
appropriate AEWRs in all geographic areas and for all SOC codes in
which employers may seek to employ H-2A workers, which the Department
considers a reasonable approach that strikes an appropriate balance
under the INA, as discussed below.
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\13\ Range occupations are subject to a minimum monthly AEWR, as
set forth in 20 CFR 655.211(c).
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C. Recent Rulemaking
As part of the comprehensive H-2A program notice of proposed
rulemaking published on July 26, 2019 (2019 NPRM), the Department
proposed to adjust the methodology used to establish the AEWRs in the
H-2A program.\14\ That approach would have provided occupation-specific
statewide hourly AEWRs for non-range occupations using data reported by
FLS for the SOC code in the State or region,\15\ if available, or data
reported by the OES (now OEWS) survey for the SOC code in the State, if
FLS data in the State or region was not available. At the time, the
Department explained that establishing AEWRs based on data more
specific to the agricultural services or labor being performed under
the SOC system would better protect against adverse effect on the wages
of agricultural workers in the United States similarly employed. For
example, the Department expressed concern that the AEWR methodology
under the 2010 Final Rule could have had an adverse effect on the wages
of workers in higher paid agricultural SOC codes, such as supervisors
of farmworkers and construction laborers, whose wages may have been
inappropriately lowered by use of a single hourly AEWR based on the
wage data collected for the six SOC codes covering field and livestock
workers (combined).\16\
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\14\ See 84 FR 36168, 36171.
\15\ For more information about the states and regions in the
FLS survey, you may visit the following web page: https://
www.nass.usda.gov/Surveys/Guide_to_NASS_Surveys/Farm_Labor/
#:~:text=The%20Farm%20Labor%20Survey%20provides%20the%20basis%20for,t
urn%2C%20provide%20the%20basis%20for%20annual%20average%20estimates.
\16\ See 84 FR 36168, 36180-36185.
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The Department received thousands of comments on the proposed
changes to the methodology for setting the AEWRs in the 2019 NPRM. The
commenters represented a wide range of stakeholders interested in the
H-2A program, and their comments were both in support of and in
opposition to the proposed changes to establish occupation-specific
hourly AEWRs for non-range occupations.\17\
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\17\ A detailed discussion of the public comments as well as
further background on the 2019 NPRM, specifically related to the
hourly AEWR determinations, was included in the Department's 2020
AEWR Final Rule and will not be restated here. See 85 FR 70445,
70447-70465 (Nov. 5, 2020). The public comments are accessible in
the public docket in regulations.gov. See https://www.regulations.gov/document/ETA-2019-0007-0002.
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As the Department worked on drafting a comprehensive H-2A program
final rule, USDA publicly announced, on September 30, 2020, its intent
to cancel the planned October 2020 data collection and November 2020
publication of the Agricultural Labor Survey (ALS) and Farm Labor
Reports (better known as the FLS).\18\ The USDA's announcement created
uncertainty regarding the annual average hourly gross wage rates for
the six SOC codes covering field and livestock workers (combined)
within the FLS that were necessary for the Department to establish and
publish the hourly AEWRs for the next calendar year (CY) period on or
before December 31, 2020, under the existing 2010 Final Rule
methodology. To ensure AEWRs for each State were published before the
end of CY 2020, the Department published the 2020 AEWR Final Rule on
November 5, 2020, with an effective date of December 21, 2020.\19\ In
revising the AEWR methodology in the 2020 AEWR Final Rule, the
Department acknowledged that USDA had suspended FLS data collection on
at least two prior occasions, and that the USDA decision to cancel both
the October data collection and the related November 2020 report was
the subject of ongoing litigation.\20\ In addition, the Department took
into account the public comments received in response to the proposal
to revise the AEWR methodology in the 2019 NRPM.
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\18\ Notice of Revision to the Agricultural Labor Survey and
Farm Labor Reports by Suspending Data Collection for October 2020,
85 FR 61719 (Sept. 30, 2020); USDA NASS, Guide to NASS Surveys: Farm
Labor Survey, https://www.nass.usda.gov/Surveys/Guide_to_NASS_Surveys/Farm_Labor (last modified Dec. 10, 2020); see
also USDA NASS, USDA NASS to Suspend the October Agricultural Labor
Survey (Sept. 30, 2020), https://www.nass.usda.gov/Newsroom/Notices/2020/09-30-2020.php.
\19\ The Department's 2020 H-2A AEWR Final Rule revised the
methodology by which the Department determines the hourly AEWR for
non-range agricultural occupations, including the corresponding
definition of the AEWR. The 2020 H-2A AEWR Final Rule addressed only
that aspect of the 2019 NPRM, while the Department's Final Rule,
Temporary Agricultural Employment of H-2A Aliens in the United
States, 87 FR 61660 (Oct. 12, 2022) (2022 Final Rule) addressed the
remaining aspects of the 2019 NPRM.
\20\ 85 FR 70445, 70446.
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The 2020 AEWR Final Rule set the 2021 AEWR for the six SOC codes
covering field and livestock workers (combined) at the 2020 AEWR rates,
which were based on results from FLS wage data published in November
2019, and provided for those AEWRs to adjust annually, starting at the
beginning of CY 2023, using the BLS Employment Cost Index (ECI), Wages
and Salaries. For all other SOC codes, and for geographic areas not
included in the FLS, the 2020 AEWR Final Rule set the 2021 AEWR at the
statewide annual average hourly gross wage for the SOC code reported by
the OEWS survey or, where a statewide average hourly gross wage is not
reported, the national average hourly gross wage for the SOC code
reported by the OEWS survey, to be adjusted annually based on the OEWS
survey.
Litigation challenging USDA's cancellation of the October data
collection and November publication of the FLS followed USDA's
September 30, 2020, announcement. On October 28, 2020, in United Farm
Workers, et al. v. Perdue, et al., No. 20-cv-01452 (E.D. Cal. filed
Oct. 13, 2020), the court preliminarily enjoined USDA from giving
effect to its decision to cancel the October 2020 FLS data collection
and cancel its November 2020 publication of the FLS.\21\ The USDA
National
[[Page 12763]]
Agricultural Statistics Service (NASS) therefore proceeded with its
data collection, and the USDA published the FLS report on February 11,
2021.\22\ Meanwhile, the Department's 2020 AEWR Final Rule was
challenged in United Farm Workers, et al. v. Dep't of Labor, et al.,
No. 20-cv-01690 (E.D. Cal. filed Nov. 30, 2020). On December 23, 2020--
two days after that rule went into effect--the court issued an order
preliminarily enjoining the Department from further implementing
it.\23\ Additionally, the court issued a supplemental order on January
12, 2021, requiring the Department to publish the AEWRs for 2021 in the
Federal Register on or before February 25, 2021, using the methodology
set forth in the 2010 Final Rule, and to make those AEWRs effective
upon their publication.\24\ Pursuant to the court's January 12, 2021,
supplemental order, the Department published the 2021 AEWRs using the
2010 Final Rule methodology on February 23, 2021, with an immediate
effective date.\25\
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\21\ United Farm Workers, 2020 WL 6318432 (E.D. Cal. Oct. 28,
2020); see also United Farm Workers v. Perdue, 2020 WL 6939021 (E.D.
Cal. Nov. 25, 2020) (denying USDA's motion to modify or dissolve the
injunction).
\22\ See USDA, Farm Labor Report (Feb. 11, 2021), https://downloads.usda.library.cornell.edu/usda-esmis/files/x920fw89s/f7624565c/9k420769j/fmla0221.pdf; see also Notice of Reinstatement
of the Agricultural Labor Survey Previously Scheduled for October
2020, 85 FR 79463 (Dec. 10, 2020).
\23\ United Farm Workers, et al. v. U.S. Dep't of Labor, et al.,
509 F. Supp. 3d 1225 (E.D. Cal. 2020).
\24\ Supplemental Order Regarding Preliminary Injunctive Relief,
United Farm Workers, et al. v. U.S. Dep't of Labor, et al., No. 20-
cv-1690 (E.D. Cal. Jan. 12, 2021), ECF No. 39.
\25\ See Labor Certification Process for the Temporary
Employment of Aliens in Agriculture in the United States: 2021
Adverse Effect Wage Rates for Non-Range Occupations, 86 FR 10996
(Feb. 23, 2021).
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In its order preliminarily enjoining the Department from further
implementing its 2020 AEWR Final Rule, the court recognized that the
Department has broad discretion in determining the methodology for
setting the AEWR so long as the Department's approach is sufficiently
explained.\26\ However, the court concluded that the plaintiffs were
likely to succeed on their claims that the Department failed to justify
freezing wages for two years, and failed to properly analyze the
economic impact of the 2020 Final AEWR Rule on farmers.27 28
In addition, the court found that, although the Department recognized
``the importance of the AEWR reflecting the market rate'' throughout
the 2020 AEWR Final Rule,\29\ the plaintiffs were likely to succeed on
their claim that the Department failed to adequately explain its
departure from its longstanding use of the FLS--which plaintiffs had
asserted better reflected such market rates--to determine AEWRs for the
field and livestock workers (combined) category.\30\
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\26\ United Farm Workers, et al. v. U.S. Dep't of Labor, et al.,
509 F. Supp. 3d 1225, 1241 n.5 (E.D. Cal. 2020).
\27\ Id. at 1241-42.
\28\ Id. at 1243-45.
\29\ Id. at 1241 (internal quotation and citation omitted).
\30\ Id. at 1247-48.
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In its decision granting plaintiffs' motion for summary judgment,
the court adopted its rationale from its decision granting the
requested preliminary injunction in holding that the 2020 Final Rule
(1) did not protect against adverse effect as required by the INA, (2)
did not adequately explain the 2-year wage freeze, and (3) failed to
properly analyze the economic impact of the rule.\31\ Accordingly, the
court vacated the 2020 Final AEWR Rule, and remanded to the Department
for further rulemaking consistent with the court's opinion.\32\
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\31\ United Farm Workers, et al. v. U.S. Dep't of Labor, et al.,
No. 20-cv-01690-DAD-BAK, 2022 WL 1004855, at *6-7 (E.D. Cal. April
4, 2022).
\32\ Id.
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D. Implementation of This Final Rule
Any job order submitted to the OFLC National Processing Center
(NPC) in connection with an Application for Temporary Employment
Certification for H-2A workers and before the effective date of this
final rule will be processed using the 2010 Final Rule methodology,
under which the AEWR for all non-range H-2A job opportunities is equal
to the annual average hourly gross wage rate for field and livestock
workers (combined) in the State or region as reported by FLS.\33\ In
addition, if an updated AEWR is published by the OFLC Administrator in
the Federal Register during the work contract period for a temporary
agricultural labor certification processed using the 2010 Final Rule
methodology, and the updated AEWR is higher than the highest of the
previous AEWR, the prevailing wage, the agreed-upon collective
bargaining wage, or the Federal or State minimum wage in effect at the
time the work is performed, the employer must pay at least the updated
AEWR upon the effective date published in the Federal Register, as
required by 20 CFR 655.120.\34\
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\33\ Although a job order filed before the effective date of
this rule is not subject to the AEWR methodology of this rule, it
may be subject to the same AEWR as a job order for field and
livestock workers filed on or after the effective date of this rule
because an AEWR determined under the 2010 Final Rule's AEWR
methodology is the same as an FLS-based AEWR determined under
paragraph (b)(1)(i)(A) of this final rule.
\34\ See 20 CFR 655.120(c) of the 2010 Final Rule (providing for
AEWR adjustments ``at least once each calendar year'').
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The methodology established by this final rule will apply to any
job orders for non-range job opportunities submitted to the NPC in
connection with an Application for Temporary Employment Certification
for H-2A, as set forth in 20 CFR 655.121, on or after the effective
date of this final rule, including job orders filed concurrently with
an Application for Temporary Employment Certification to the NPC for
emergency situations under 20 CFR 655.134. In order for employers to
understand their wage obligations upon the effective date of this final
rule, the Department is listing the statewide AEWRs applicable to the
field and livestock workers (combined) category pursuant to 20 CFR
655.120(b)(1)(i) of this final rule below and providing the URL that
provides a search tool enabling interested parties to search by State
and SOC code for the AEWR applicable to all other non-range job
opportunities pursuant to 20 CFR 655.120(b)(1)(ii) of this final rule.
In addition, the Department will post the AEWR applicable to each SOC
code and geographic area contemporaneously with the publication of this
final rule in the Federal Register on the OFLC website at https://www.dol.gov/agencies/eta/foreign-labor/. Employers will therefore have
30 days from the date of the publication of this final rule to
understand their new wage obligations before they go into effect.
Table--Hourly AEWRS Determined Under Sec. 655.120(b)(1)(i) Effective
on or After March 30, 2023
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Alabama...................................................... $13.67
Alaska....................................................... 17.21
Arizona...................................................... 15.62
Arkansas..................................................... 13.67
California................................................... 18.65
Colorado..................................................... 16.34
Connecticut.................................................. 16.95
Delaware..................................................... 16.55
District of Columbia......................................... 20.33
Florida...................................................... 14.33
Georgia...................................................... 13.67
Guam......................................................... 10.40
Hawaii....................................................... 17.25
Idaho........................................................ 15.68
Illinois..................................................... 17.17
Indiana...................................................... 17.17
Iowa......................................................... 17.54
Kansas....................................................... 17.33
Kentucky..................................................... 14.26
Louisiana.................................................... 13.67
Maine........................................................ 16.95
Maryland..................................................... 16.55
[[Page 12764]]
Massachusetts................................................ 16.95
Michigan..................................................... 17.34
Minnesota.................................................... 17.34
Mississippi.................................................. 13.67
Missouri..................................................... 17.54
Montana...................................................... 15.68
Nebraska..................................................... 17.33
Nevada....................................................... 16.34
New Hampshire................................................ 16.95
New Jersey................................................... 16.55
New Mexico................................................... 15.62
New York..................................................... 16.95
North Carolina............................................... 14.91
North Dakota................................................. 17.33
Ohio......................................................... 17.17
Oklahoma..................................................... 14.87
Oregon....................................................... 17.97
Pennsylvania................................................. 16.55
Puerto Rico.................................................. 9.17
Rhode Island................................................. 16.95
South Carolina............................................... 13.67
South Dakota................................................. 17.33
Tennessee.................................................... 14.26
Texas........................................................ 14.87
Utah......................................................... 16.34
Vermont...................................................... 16.95
Virgin Islands............................................... 13.24
Virginia..................................................... 14.91
Washington................................................... 17.97
West Virginia................................................ 14.26
Wisconsin.................................................... 17.34
Wyoming...................................................... 15.68
------------------------------------------------------------------------
Hourly AEWRs determined under Sec. 655.120(b)(1)(ii) effective on
or after March 30, 2023 are available for each SOC code and geographic
area using the search tool or searchable spreadsheet that may be
accessed here: https://flag.dol.gov/.
When the OFLC Administrator publishes subsequent updates to the
AEWRs in the Federal Register, as required by 20 CFR 655.120(b)(2) of
this final rule, the adjusted AEWRs will be effective on the date
specified in the Federal Register notice.\35\ As of the effective date
of an AEWR adjustment, the updated AEWR applies to both H-2A
applications in process (e.g., filed, but no final determination made;
or those with a final determination, but under appeal), and certified
H-2A applications that remain in effect.\36\ If the AEWR is adjusted
during a work contract period, the employer must reassess its wage
obligation(s) under 20 CFR 655.122(l). If the new AEWR applicable to
the employer's certified job opportunity is higher than the highest of
the previous AEWR, the current prevailing hourly wage rate, the current
prevailing piece rate, the current agreed-upon collective bargaining
wage, the current Federal minimum wage rate, or the current State
minimum wage rate, the employer must pay that adjusted AEWR upon the
effective date of the new rate. See 20 CFR 655.120(b)(3). For a job
order subject to the 2022 Final Rule, if the adjusted AEWR is lower
than the rate guaranteed on the job order, the employer must continue
to pay at least the rate guaranteed on the job order. See 20 CFR
655.120(b)(4).
---------------------------------------------------------------------------
\35\ See 20 CFR 655.120(b)(3) of the 2022 Final Rule, 87 FR at
61796 (providing that ``the employer must pay at least the updated
AEWR upon the effective date of the updated AEWR published in the
Federal Register'').
\36\ See 20 CFR 655.120(a) (requiring the employer to ``offer,
advertise in its recruitment, and pay a wage that is at least the
highest of'' the applicable wage sources) and 20 CFR 655.120(b)(3)
and 655.122(l) (requiring the employer to increase a worker's pay
due to an AEWR adjustment after certification, if applicable).
---------------------------------------------------------------------------
II. Summary of Proposed Changes to the AEWR Methodology and the Changes
Adopted in This Final Rule
On December 1, 2021, the Department issued the 2021 AEWR NPRM
announcing its intent to amend the regulations governing the
methodology by which it determines the hourly AEWRs for non-range H-2A
occupations (i.e., all H-2A occupations other than herding and
production of livestock on the range). See 86 FR 68174 (Dec. 1, 2021).
Specifically, the Department proposed to use a single FLS-based AEWR
for most agricultural work performed in a given State (i.e., work
performed in the ``field and livestock workers (combined) occupational
group'' reported by FLS). Only in the event FLS did not report a wage
finding for the field and livestock workers (combined) occupational
group (e.g., in Alaska, where FLS does not survey) would the OEWS serve
as a wage source for setting the single statewide AEWR applicable to H-
2A job opportunities for field and livestock workers (combined) in that
State or region, or equivalent district or territory. For each SOC code
not included in the field and livestock workers (combined) occupational
group reported by FLS, the Department proposed to use SOC-specific
OEWS-based AEWRs in each State or equivalent district or territory.
Additionally, for agricultural labor or services to be performed by H-
2A workers that cannot be encompassed within a single SOC code, the
Department proposed to determine the AEWR using the SOC code assigned
to the employer's job opportunity with the highest applicable AEWR.
In addition, the Department proposed to continue to adjust the
AEWRs for each State or region at least once in each calendar year. The
Department explained that because the FLS is released in or around
November and the OEWS is released in or around June, the Department
intended to update the AEWRs through two separate annual announcements
in the Federal Register. One Federal Register notice would announce
annual adjustments to the AEWRs based on the FLS, effective on or about
January 1, and a second Federal Register notice would announce annual
adjustments to the AEWRs based on the OEWS survey, effective on or
about July 1.
Finally, the Department proposed to revise the definition of AEWR.
The proposed definition clarified that the Department uses a different
methodology to establish AEWRs for range occupations (i.e., job
opportunities processed under the Department's herding and production
of livestock regulations at 20 CFR 655.200 through 655.235) than it
uses to establish AEWRs for non-range occupations. The Department
explained that a different methodology is required to establish the
national monthly AEWR for range occupations due to the nature of range
occupations (i.e., occupational requirements for workers to be on call
24 hours per day, 7 days a week, to perform herding and production of
livestock duties on the range).
The Department invited interested parties to submit written
comments on all aspects of this proposal. Because the 2020 AEWR Final
Rule had been preliminarily enjoined before the NPRM for this Final
Rule was published, there was uncertainty as to whether the 2020 AEWR
Final Rule would be vacated prior to the issuance of this Final Rule.
The Department therefore sought comment on all aspects of the NPRM for
this Final Rule that mirrored provisions in the 2020 AEWR Final Rule.
In addition, the Department requested comments on use of the FLS and
OEWS surveys and the conditions under which each survey should be used
to establish the AEWR. For example, the Department sought comments on
the continued use of a single statewide hourly AEWR for the field and
livestock worker (combined) category, rather than statewide AEWRs for
each SOC code within the FLS field and livestock workers (combined)
category. In addition, the Department requested comments on use of the
OEWS survey to establish the AEWR for the field and livestock workers
(combined) category in the absence of the FLS or where the FLS does not
report a wage finding for these SOC codes in a particular State or
region or equivalent district or territory, and also sought comments on
use of the OEWS to establish AEWRs for all job opportunities that do
not fall within the
[[Page 12765]]
FLS field and livestock workers (combined) occupational group.
The Department specifically stated that it was not considering
eliminating the AEWR or changing the AEWR's role in determinations of
an employer's required minimum wage rate in the H-2A program, for
reasons explained at length in prior rulemakings, including in the 2020
AEWR Final Rule and 2010 Final Rule.
The comment period closed on January 31, 2022.
A. General Overview of Comments
The Department received a total of 92 public comments in docket
number ETA-2021-0006 in response to the 2021 AEWR NPRM prior to the
comment submission deadline. The commenters represented a range of
stakeholders from the public, private, and not-for-profit sectors. The
Department received comments from a geographically diverse cross-
section of stakeholders. These commenters included workers' rights
advocacy organizations, farm owners, trade associations for
agricultural products and services, not-for-profit organizations
interested in agricultural issues, and other organizations with an
interest in farming, ranching, and other agricultural activities.
Public sector commenters included State agencies, while private sector
commenters included business owners, employer representatives, workers'
rights advocacy groups, public policy organizations, and trade
associations interested in agricultural and immigration-related issues.
The Department recognizes and appreciates the value of comments, ideas,
and suggestions from all those who commented on the proposal, and this
final rule was developed after review and consideration of all public
comments timely received in response to the 2021 AEWR NPRM.
Among the comments received, the Department received 16 requests
for an extension of the comment period for the 2021 AEWR NPRM.\37\
While the Department appreciates the issues raised concerning the
public's opportunity to examine the rule and comment, the Department
decided not to extend the comment period and posted its response in the
rule's electronic docket (ETA-2021-0006-0046) for public viewing. In
that response, the Department explained that the proposed changes would
have an economic impact on the regulated community, and the 60-day
comment period provided was consistent with the comment periods
provided in rules on similar subject matter that were more
comprehensive and complex. For example, the Department published the
2019 NPRM, which proposed comprehensive revisions to the entire H-2A
regulatory framework, including revisions to the AEWR methodology that
were more complex than those proposed in the 2021 AEWR NPRM. The 2019
NPRM received extensive public review and comments within the 60-day
comment period even though the Department declined at that time to
extend the comment period.
---------------------------------------------------------------------------
\37\ The Department also received an ex parte communication
during the comment period seeking clarification on one of the
regulatory alternatives mentioned in the NPRM. The Department
responded to the communication and posted the correspondence (ETA-
2021-0006-0013) on the public docket associated with this
rulemaking.
---------------------------------------------------------------------------
Most commenters specifically addressed one or more of the
Department's proposed changes to the methodology used to determine the
AEWR in the H-2A program, such as the Department's proposed use of FLS
and OEWS as the wage sources for setting AEWRs and conditions under
which each source would be used to determine the AEWR for a particular
job opportunity. These comments are discussed in the subject-by-subject
analysis below.
Some commenters expressed support or opposition, generally,
regarding the Department's rulemaking efforts to modify the AEWR
methodology, regarding the AEWR, itself, or regarding the Department's
balancing of employer and worker interests. For example, a variety of
commenters asserted that there is no reason to change the methodology,
or objected to the proposed changes by themselves without balancing
them with other program changes or addressing the undocumented
workforce. Some commenters expressed a preference for the current
methodology (i.e., the 2010 Final Rule methodology) if the only
alternative is the proposed 2020 AEWR Final Rule methodology. Comments
from employers, trade associations, a law firm, and a government agency
objected to both the 2010 AEWR methodology and the AEWR methodology
proposed in the 2021 AEWR NPRM. In general, these commenters asserted
that both the 2010 and 2021 (proposed) AEWR methodologies were
disconnected from agricultural industry realities, such as labor
shortages despite wage increases; the impact of labor and program costs
on agricultural operations' viability and competitiveness in interstate
and international markets; whether employers are able to absorb labor
costs; and the impact of such costs on job availability, downstream
industry, and food cost and supply.
Other commenters expressed general concern about increases in
required wage rates or asserted that the AEWR is too high, comparing it
to the minimum wage rate or to general wage trends in the U.S. economy,
using the ECI for comparison. Some commenters objected to the
Department setting a wage floor, rather than permitting the employer to
offer a wage based on work performance or experience, knowledge,
loyalty, and contribution to the employer's operation. In contrast, a
nonprofit public policy advocacy organization observed that farmworkers
are not receiving unusually high wages or wages that are increasing at
an unreasonable rate; rather, its review of wage data indicated that
farmworkers are among the lowest-paid workers in the United States--
lower than other comparable low-paid workers--and the rate of
farmworker wage changes over time has been reasonable and consistent
with labor market trends, with the impact on farmers offset by rising
productivity and/or output prices.
Although the Department is sensitive to the commenters' general
concerns, the Department notes the purpose of this rulemaking effort is
to establish an AEWR methodology that guards against potential wage
depression among similarly employed workers in areas where employers
hire H-2A workers in accordance with H-2A program requirements. As
stated above, the AEWR is a longstanding regulatory mechanism the
Department uses to certify that the employment of H-2A workers will not
adversely affect the wages of agricultural workers in the United States
similarly employed. In addition, the Department's effort to improve the
AEWR methodology through rulemaking is one part of the Department's
larger efforts to update and improve the H-2A program within the scope
of the Department's authority. Throughout the course of several
rulemakings, the Department has articulated reasons for changing the
AEWR methodology, including geographic limitations of the FLS survey
and the need to address potential adverse effect on the wages of
similarly employed workers in occupations outside the field and
livestock workers (combined) occupations. The Department responds to
specific comments about the proposed changes adopted by this final rule
in the subject-by-subject analysis in Section II.B. Before beginning
the subject-by-subject analysis, however, the Department here clarifies
three significant
[[Page 12766]]
misconceptions about the 2021 AEWR NPRM reflected in the comments.
First, one commenter objected to the Department's inclusion of any
aspect of the 2020 AEWR Final Rule, noting that the rule was enjoined
in Federal court. As discussed above, although the Federal court's
decision determined that specific aspects of the methodology adopted in
the 2020 AEWR Final Rule were inconsistent with the Department's
mandate to ensure employment of foreign workers does not adversely
affect the wages and working conditions of workers in the United States
similarly employed, the Department reevaluated the 2020 AEWR Final
Rule's provisions, in conjunction with the Federal court's findings,
and proposed only aspects of the 2020 AEWR Final Rule that are
consistent with the Department's objectives and the court's opinion.
The Department solicited public comment on the specific aspects of the
2020 AEWR Final Rule the Department proposed to retain, and these
comments are addressed in subject-by-subject analysis in Section II.B.
Second, some commenters misunderstood, or requested clarification
regarding, the Department's statement in the 2021 AEWR NPRM that the
proposed AEWR methodology would not change labor costs or wage
requirements for the ``vast majority'' of H-2A job opportunities. The
Department appreciates the opportunity to clarify. The Department
proposed to retain the 2010 Final Rule AEWR methodology for field and
livestock workers (combined) job opportunities, whenever the FLS
reports the average hourly gross wage rate for field and livestock
workers (combined) in a State or region. Apart from three instances in
the past three decades in which USDA suspended the survey, which are
discussed above, the FLS has consistently collected and reported wage
data for field and livestock workers (combined) in 49 States. Thus, the
Department's proposal would not change the methodology by which the
AEWRs are established for field and livestock workers (combined) job
opportunities in most of the United States. In addition, the FLS field
and livestock workers (combined) category reports aggregate wage data
covering six SOC titles and codes: Farmworkers and Laborers, Crop,
Nursery and Greenhouse Workers (45-2092); Farmworkers, Farm, Ranch, and
Aquacultural Animals (45-2093); Agricultural Equipment Operators (45-
2091); Packers and Packagers, Hand (53-7064); Graders and Sorters,
Agricultural Products (45-2041); and All Other Agricultural Workers
(45-2099). Based on the Department's program estimates, 98 percent of
H-2A job opportunities are classified within these six SOC titles and
codes.\38\ The Department acknowledges that some of the job
opportunities within that 98 percent may involve some work that cannot
be classified solely within the field and livestock workers (combined)
occupational group and, instead, constitutes a combination of job
duties covering multiple SOC codes subject to different AEWRs under the
proposed methodology. However, as clarified in the subject-by-subject
analysis in Section II.B, the Department anticipates the AEWRs
established for the vast majority of H-2A job opportunities will not
change under this final rule, and will impact H-2A wage requirements
only for: (1) the small percentage of job opportunities that cannot be
encompassed within the six SOC codes and titles in the FLS field and
livestock workers (combined) reporting category, and (2) the small
number of field and livestock workers (combined) job opportunities in
States or regions, or equivalent districts or territories, for which
the FLS does not report a wage (e.g., Alaska and Puerto Rico).
---------------------------------------------------------------------------
\38\ Based on a review of H-2A applications certified during the
5-year period of October 1, 2017, through September 1, 2022, OFLC
certified 76,547 H-2A applications covering 1,484,699 worker
positions across all SOCs. Of the total worker positions certified,
1,459,792 (98.3%) worker positions were certified in the following
six SOCs comprising the field and livestock workers (combined)
category that the FLS reports: 3,056 worker positions as Graders and
Sorters, Agricultural Products (45-2041); 86,157 worker positions as
Agricultural Equipment Operators (45-2091); 1,302,604 worker
positions as Farmworkers and Laborers, Crop, Nursery and Greenhouse
(45-2092); 58,741 worker positions as Farmworkers, Farm, Ranch, and
Aquacultural Animals (45-2093); 437 worker positions as Packers and
Packagers, Hand (53-7064); and 8,797 worker positions as
Agricultural Workers, All Other (45-2099). See https://www.dol.gov/agencies/eta/foreign-labor/performance (accessed September 12,
2022).
---------------------------------------------------------------------------
Third, comments reflecting employers' interests asserted a variety
of objections to the Department continuing to require employers to
adjust wage offers and rates of pay due to annual AEWR adjustments. An
employer and a trade association expressed concern with wage increases
after growers calculate payroll and receive loans for their production
year or crop loan cycle, while a law firm expressed concern with wage
increases after agricultural construction companies negotiate multiyear
contracts with growers. An agent stated that AEWR adjustments appeared
to require wage increases after the State Workforce Agency (SWA) has
accepted a job order. Trade associations and employers objected to wage
increases due to AEWR adjustments as infringing on negotiated
employment contract terms. The Department appreciates the opportunity
to clarify that wage requirement adjustments based on annual AEWR
adjustments are not new for employers who choose to use the H-2A
program. The 2010 H-2A Final Rule specified the employer's obligation
to pay the wage rate ``in effect at the time work is performed,'' which
required wage offer and payroll adjustments if the Department provided
notice of an updated AEWR or prevailing wage determination higher than
an employer's current wage offer or pay rate.\39\ In the 2022 Final
Rule, the Department clarified and codified in 20 CFR 655.120(b)(3) and
655.120(c)(3) an employer's wage adjustment obligation in the event of
an AEWR or prevailing wage determination update.
---------------------------------------------------------------------------
\39\ See 75 FR at 6901.
---------------------------------------------------------------------------
The Department appreciates all of the comments received, which
reflect the importance and complexity of the Department's objective--to
strike a reasonable balance between the statute's competing goals of
providing employers with an adequate supply of legal agricultural labor
and protecting the wages and working conditions of workers in the
United States similarly employed--and its responsibility to certify H-
2A employment only where the Department determines such employment will
not adversely affect the wages of workers in the United States
similarly employed. The Department proposed changes to the AEWR
methodology in the 2021 AEWR NPRM after reflection on recent
rulemaking, related litigation, and the need to strengthen wage
protections. Having now considered the public comments received on the
proposed methodology, the Department continues to believe that the
changes proposed in the 2021 NPRM best strike the balance between the
statute's competing goals of providing employers with an adequate
supply of legal agricultural labor and protecting the wages of workers
in the United States similarly employed. Accordingly, the Department is
adopting the methodology proposed in the 2021 AEWR NPRM without change.
B. Definition of AEWR
The Department proposed to define AEWR as ``[t]he wage rate
published by the OFLC Administrator in the Federal Register for non-
range occupations as set forth in Sec. 655.120(b) and range
occupations as set forth in Sec. 655.211(c),'' mirroring the
definition in the 2020 AEWR Final Rule.
One commenter opposed the use of any part of the 2020 AEWR Final
Rule,
[[Page 12767]]
including the definition of AEWR, because of the litigation history in
Federal court. The commentor misinterpreted the impact of the
litigation, as the court's decision vacating the 2020 rule was
unrelated to the definition of AEWR, and the court's vacatur of the
2020 rule does not prevent the Department from proposing and
subsequently adopting the same definition of AEWR in this rulemaking.
The Department has reevaluated the definition of AEWR and determined
that the definition adopted in the 2020 AEWR Final Rule and proposed in
the 2021 AEWR NPRM remains consistent with the Department's objectives.
The same commenter suggested that the Department, instead, continue
to use the AEWR definition provided in the 2010 Final Rule, and wait
for the FLS to adjust its methodology, an endeavor the commentor
asserted is underway. The Department declines to adopt this suggestion,
as the 2010 Final Rule definition \40\ is inconsistent with the
methodology adopted in this final rule. In addition, the 2010 Final
Rule definition failed to account for the distinct AEWR methodology
applicable to H-2A range occupations, implemented in 2015.
---------------------------------------------------------------------------
\40\ See 75 FR 6883, 6960 (defining AEWR as ``[t]he annual
weighted average hourly wage for field and livestock workers
(combined) in the States or regions as published annually by the
USDA based on its quarterly wage survey'').
---------------------------------------------------------------------------
C. AEWR Methodology
1. Wage Sources Used To Determine the AEWR
The Department proposed a contingency approach to calculate the
AEWR in which the FLS is the primary data source for the overwhelming
majority of workers with backup wage sources for each occupational
classification grouping based on availability of wage source data. The
Department recognizes that having contingencies in place when data are
not available is a practical necessity in certain circumstances to
determine an AEWR. Thus, the Department proposed to implement secondary
and, in some instances, tertiary safeguards to determine the AEWR when
data is not available using the primary wage source in a particular
State or region.
For the field and livestock workers (combined) occupational group
within a given State or region, or equivalent district or territory,
the Department proposed to determine the AEWR using, as its primary
wage source, the annual average combined hourly gross wage from the
USDA's NASS quarterly FLS for the State or region. Hourly wage rates
are calculated based on employers' reports of total wages paid and
total hours worked for all hired workers during the survey reference
week each quarter. In the event FLS data is not available to calculate
the AEWR for field and livestock workers in a particular State or
region, or equivalent district or territory, the Department proposed to
determine the AEWR using, as its secondary wage source, the OEWS
statewide annual average hourly gross wage for the field and livestock
workers (combined) category. In the event that neither the FLS nor the
OEWS report a wage for the field and livestock workers (combined)
category for a State, or equivalent district or territory, the
Department proposed to determine the AEWR for the field and livestock
workers (combined) category using, as its tertiary wage source, the
OEWS national annual average hourly gross wage for the field and
livestock workers (combined) category.
For all SOC codes other than the six covering field and livestock
workers (combined), the Department proposed to determine the AEWR
using, as its primary wage source, the statewide annual average hourly
gross wage for the SOC code for the State, or equivalent district or
territory, as reported by the OEWS survey. In the event the OEWS survey
does not report a statewide annual average hourly gross wage for the
SOC code, the Department proposed to determine the AEWR for that State,
or equivalent district or territory, using as its secondary wage
source, the national annual average hourly gross wage for the SOC code,
as reported by the OEWS survey. After considering public comments
discussed in detail below, the Department has adopted these proposals
without change.
a. The Department Will Use the FLS To Establish the AEWR for Field and
Livestock Worker Job Opportunities in the Vast Majority of Cases
The Department received some comments in support of its proposal to
continue using the FLS to determine the AEWR for H-2A job opportunities
for field and livestock workers. Several comments noted that the FLS
provides the most accurate and reliable source of wage data to
represent the field and livestock workers (combined) category. A trade
association stated that the FLS is the only wage survey that collects
data directly from farm and ranch employers. Additional comments in
support of using the FLS over other data sources noted that the FLS
most accurately captures seasonal peaks in farmworker wages by
measuring wages quarterly (January, April, July, and October), and
provides the most up-to-date data on worker wages by using only single-
year data. One of these commenters asserted that the Department's
current proposal is not too burdensome or expensive to use and it
provides consistency for employers and workers because--in most cases--
the AEWR methodology proposed is the same methodology the Department
has used for more than three decades.
The Department also received numerous comments opposing its
proposal to continue using the FLS to determine the AEWR for H-2A
applications for job opportunities in the field and livestock workers
(combined) occupational group for various reasons. Several commenters
asserted that the Department's use of the FLS to determine the AEWR is
arbitrary and capricious and does not meet the Department's statutory
obligations. A trade association stated that the proposal is ``likely
to cost exponentially more than what the Department estimates to the
users of the H-2A program and will most certainly drive some to shutter
operations.'' Other commenters also expressed concern that using the
FLS to determine the AEWR in the H-2A program would lead to curtailed
operations, more automated processes, or closing farms. These
commenters suggested that using the FLS would result in diminished job
opportunities and an inadequate labor supply. Many of these commenters
provided alternative suggestions, such as setting a static wage rate of
115 percent of the Federal or State minimum wage, or adopting the
Canadian model of farmworker wage setting (without providing any
information regarding that model), which are addressed in the
discussion of alternative methodology suggestions in this preamble,
below.
In response to commenters' concerns that the use of the FLS to
determine the AEWR for H-2A job opportunities in the field and
livestock workers (combined) occupational group will result in
operational and labor supply issues for employers who choose to
participate in the H-2A program, the Department reiterates that, with
the exception of brief periods, it has used FLS data to establish the
AEWR for such field and livestock job opportunities since 1987. While
the Department is sensitive to the concerns raised, continuing to use
FLS data will not introduce new operational or labor supply issues. In
carrying out its statutory responsibility under the INA, the Department
seeks to balance employers' and workers' interests by, among other
things, using the best available actual wage data for workers in the
United States similarly employed
[[Page 12768]]
(when available) to determine the AEWR.
As discussed in the legal authority section above (Section I.A),
the Department has discretion to determine the methodological approach
that best allows it to meet its statutory mandate.\41\ The Department
continues to believe the FLS is the best available wage source for
establishing AEWRs covering the vast majority of H-2A job opportunities
(i.e., the field and livestock workers (combined) category), whenever
such data is available. The FLS is the most comprehensive survey of
wages paid by farmers and ranchers.\42\ The data collected in the FLS
allows the Department to establish AEWRs using the most current wage
rates, which protects workers in the United States similarly employed
against adverse effects on their wages resulting from the employment of
foreign workers willing to work for less.
---------------------------------------------------------------------------
\41\ See AFL-CIO v. Dole, 923 F.2d 182, 187 (D.C. Cir. 1991);
AFL-CIO v. Brock, 835 F.2d 912, 915 (D.C. Cir. 1987).
\42\ 85 FR 70445, 70458 (Nov. 5, 2020) (AEWR 2020 Final Rule);
75 FR 6883, 6898-6899 (Mar. 15, 2010) (AEWR 2010 Final Rule).
---------------------------------------------------------------------------
In addition, the Department considers the broad geographic scope of
the survey an advantage of the FLS. The FLS consistently collects
sufficient data to generate a wage finding for the field and livestock
workers (combined) category in each State or region surveyed, making it
a reliable source of wage data year-to-year. As explained in the 2021
AEWR NPRM, the geographic scope of the FLS, covering California,
Florida, and Hawaii, and 15 multi-State groupings for other States, and
the statewide and regional wages issued ``provide[s] protection against
wage depression that is most likely to occur in particular local areas
where there is a significant influx of foreign workers.'' \43\ The
broad geographic scope of the FLS is also ``consistent with both the
nature of agricultural employment and the statutory intent of the H-2A
program,'' reflecting the migratory pattern of many workers providing
agricultural labor or services across wide areas, and Congress's
recognition of ``this unique characteristic of the agricultural labor
market with its statutory requirement that employers recruit for labor
in multi-State regions as part of their labor market before receiving a
labor certification . . . .'' \44\ The Department continues to believe
that use of FLS data serves to prevent adverse effect on the wages of
farmworkers in the United States by establishing a prevailing wage
defined over a broader geographic area and over a broader occupational
span (i.e., the six SOC codes covering all field and livestock workers
(combined), rather than a narrow crop or job description).\45\ For
similar reasons, the Department explained that the FLS-based AEWR may
serve ``to mobilize domestic farm labor in neighboring counties and
States to enter the subject labor market over the longer term and
obviate the need to rely on . . . foreign labor on an ongoing basis.''
\46\
---------------------------------------------------------------------------
\43\ 86 FR 68174, 68180 (Dec. 1, 2021).
\44\ 75 FR 6883, 6899 (Mar. 15, 2010).
\45\ Id.
\46\ Id.
---------------------------------------------------------------------------
Several commenters expressed concerns related to the accuracy,
reliability, and future availability of FLS data. One of these
commenters suggested that the Department's use of the FLS is
``inconsistent, difficult to measure, and should be discontinued'' as a
wage source to calculate the AEWR, without clearly explaining its
characterization of the FLS as ``inconsistent'' and ``difficult to
measure.'' In addition, this commenter asserted the FLS ``artificially
inflates the reported wage'' both by not differentiating between the
U.S. workforce and H-2A workforce--thereby creating an echo chamber of
rising wages--and by including incentive pay such as piece rate,
bonuses, and overtime. Noting that the FLS is used for various purposes
other than determining AEWRs, two commenters suggested the Department
should ``ensure it only uses the data that applies to its use . . .''.
Another commenter suggested the Department should coordinate with the
USDA to ensure that FLS data is accurate and does not result in
creation of an artificial wage rate. To the extent the commenters
suggested the Department change the FLS' methodology, those comments
are beyond the scope of the present rule, as well as beyond the
Department's authority. Regarding the comments directed toward the
Department's continued reliance on the FLS to determine the AEWR and
the value of the FLS for that purpose, the Department responds in this
section.
The USDA has conducted the FLS since 1910, and has developed
extensive expertise analyzing, measuring, and assessing the accuracy
and reliability of its annual wage estimates.\47\ USDA NASS publishes
FLS data semiannually in May and November in the Farm Labor Report
(FLR).\48\ The May report includes employment and wage estimates based
on January and April reference weeks, and the November report includes
estimates based on July and October reference weeks. In each case, the
reference week is the Sunday to Saturday period that includes the 12th
day of the month. The November report also provides annual data based
on quarterly estimates. The Department uses the annual data from the
November report to determine AEWRs.
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\47\ 86 FR 40802 (July 29, 2021).
\48\ See USDA NASS, Surveys: Farm Labor, https://www.nass.usda.gov/Surveys/Guide_to_NASS_Surveys/Farm_Labor/.
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The scope, purpose, and statistical methodology for each FLR is
extensively outlined in NASS's ``Methodologies and Quality Measures
Report,'' which is published concurrently with each FLR publication. In
the ``Methodologies and Quality Measures Report,'' the NASS states that
``the employment and wage estimates published support USDA and DOL
programs'' and inform other ``government agencies, educational
institutions, farm organizations, and private sector employers of farm
labor.'' \49\ Each FLR contains specific information about the types
and purposes of the statistical methods used for analysis of the data
collected in that round of the FLS. Additionally, each FLR outlines the
quality metrics for that round of the FLS, including the sample size,
response rate and outliers, calibration for survey nonresponses, and
coefficient of variation for each survey. For the final step in the
survey process, NASS convenes farm labor experts from its Agricultural
Statistics Board (ASB), a panel of senior statisticians and program
specialists, to perform a national review, reconcile the State-level
evaluations to regional and national estimates, and prepare the
official findings for release.
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\49\ Farm Labor Methodology and Quality Measures (May 2022),
USDA, National Agricultural Statistics Service (May 25, 2022)
https://www.nass.usda.gov/Publications/Methodology_and_Data_Quality/Farm_Labor/05_2022/fmlaqm22.pdf at 1.
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Some commenters stated that FLS data should not be used to
determine AEWRs because average gross wage data is a byproduct of the
survey instrument, and ``the survey is intended to identify the number
of workers employed in the U.S.'' One commenter stated, ``the U.S.
Department of Agriculture has indicated that using the FLS as a means
to manufacture a wage rate is a misuse of its survey,'' based on a
footnote citation to a ``Letter from Secretary Perdue.'' This
commenter's assertion and the reference to a letter from former
Secretary of Agriculture Sonny Perdue were echoed by several other
commenters. The Department notes that; however, no commenter included a
letter or statement from former Secretary Perdue and the Department has
not identified such a statement in its research. In any event, even if
such a
[[Page 12769]]
statement had been made, it would not affect the Department's decision
to utilize the FLS, particularly in light of other statements that
contradict any such statement. For example, a 2019 Memorandum of
Understanding (MOU) between USDA and the Department explicitly
acknowledged the Department's ``continued and recurring bona fide need
for the information provided by the [FLS], which will allow [DOL] to
produce the official AEWRs.'' \50\ In enjoining the Department of
Agriculture from suspending the 2020 FLS, a Federal district court
cited this MOU, observing that ``USDA has recognized that FLS data is
used . . . `by farm worker organizations to help set wage rates and
negotiate labor contracts as well as determine the need for additional
workers.' '' \51\ Subsequently, the Department of Agriculture issued a
court-ordered notice of reinstatement of the Agricultural Labor
Survey.\52\
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\50\ United Farm Workers v. Perdue, No. 1:20-cv-01452-DAD-JLT,
17-18 (E.D. Cal. Oct. 28, 2020) (citing USDA-DOL MOU at 2-6).
\51\ United Farm Workers v. Perdue, No. 1:20-cv-01452-DAD-JLT,
17-18 (E.D. Cal. Oct. 28, 2020) (citing USDA-DOL MOU at 2-6 and 83
FR at 50632).
\52\ 85 FR 79463 (December 10, 2020).
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Additionally, NASS itself recognizes on its website that ``the
employment and wage estimates published in the Farm Labor report are
used by Federal, State, and local government agencies; educational
institutions; farm organizations; and private sector employers of farm
labor.'' \53\ One of the listed current uses of FLS data includes the
Department's use of the ``annual weighted average hourly wage rate for
field and livestock workers combined'' to set the AEWR in the
administration of the H-2A program.\54\ As the Department explains at
length below and in prior rulemakings, ``only the FLS directly surveys
farmers and ranchers and the FLS is recognized by the BLS as the
authoritative source for data on agricultural wages.'' \55\ As the
Department has noted, BLS refers the public to USDA and NASS for
statistics on U.S. agriculture employment and wages.\56\ Therefore, the
Department disagrees with the assertions made by these commenters.
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\53\ https://www.nass.usda.gov/Surveys/Guide_to_NASS_Surveys/Farm_Labor/.
\54\ https://www.nass.usda.gov/Surveys/Guide_to_NASS_Surveys/Farm_Labor/.
\55\ 84 FR 36168, 36243 (Jul. 26, 2019); See also 85 FR 70445,
70473 (Nov. 5, 2020).
\56\ 84 FR at 36182 (citing OEWS Frequently Asked Questions,
https://www.bls.gov/oes/oes_ques.htm, which states, ``[f]or
statistics on the U.S. agricultural sector, please visit the United
States Department of Agriculture's National Agricultural Statistics
Service program website.'').
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Other commenters noted that the Department decided against using
the FLS to determine the AEWR for range occupations, noting that ``the
Department determined utilization of the FLS would harm herding
operations by causing them to downsize or close altogether.'' The
Department, however, issued separate regulations governing the
employment and wages of foreign workers in jobs related to the herding
or production of livestock on the range (i.e., range occupations) in
2015,\57\ in recognition of the unique nature of such occupations,
which made it necessary to use a different AEWR methodology.\58\ Such
occupations are located in remote areas, and have nontraditional work
schedules that generally require workers to be on call 24 hours per
day, 7 days per week. Additionally, even prior to the 2015 Herder Final
Rule, the Department generally relied on wage surveys, historically
conducted by the SWAs, for range occupations. The nature of these
occupations and scarcity of U.S. workers employed in such occupations
made it difficult to conduct statistically valid wage surveys for these
occupations, and the lack of adequate survey data ultimately resulted
in 20 years of wage stagnation for workers in these range occupations.
Due to the unique nature of the occupations, challenges in producing
valid wage surveys, and the inadequacy of wages produced by these
circumstances, the Department established a new methodology to
determine a monthly AEWR for all range occupations.\59\ In contrast,
non-range occupations do not present these unique circumstances that
rendered use of the FLS for range occupations inadequate. Additionally,
as discussed below, the Department declines to adopt an AEWR
methodology that incorporates a broad index like the ECI as it did in
the 2015 Herder Final Rule.
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\57\ 2015 H-2A Herder Final Rule, 80 FR 62958. The Department
recently rescinded Sec. 655.215(b)(2) in a separate rulemaking.
Final Rule, Adjudication of Temporary and Seasonal Need for Herding
and Production of Livestock on the Range Applications Under the H-2A
Program, 86 FR 71373 (Dec. 16, 2021) (2021 H-2A Herder Final Rule).
\58\ See 20 CFR 655.210(g) and 655.211(a).
\59\ The Federal minimum wage serves as the basis for an initial
national monthly wage rate (calculated based on a 48-hour workweek),
and beginning in 2017, the Department adjusts the AEWR annually
based on the ECI for wages and salaries. See 20 CFR 655.211(c).
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b. The Department Will Use OEWS Data for Field and Livestock Workers
(Combined) Only if FLS Data Is Not Available
As set forth above, the Department's preference is to use the FLS,
whenever possible, to determine the AEWR for all job opportunities that
fall within the FLS field and livestock workers (combined) category.
The Department recognizes, however, that there may be instances in
which the FLS is unavailable to determine the AEWR for some or all such
workers. In such circumstances, the Department believes that it is
appropriate to determine the AEWR using the next best alternative data
source (i.e., the OEWS), as discussed below.
In the event the FLS cannot report the annual average hourly gross
wage for the field and livestock workers (combined) category in a
particular geographic area (e.g., in Alaska, which is not covered in
FLS data) or in the unanticipated circumstance that the FLS survey
becomes unavailable (e.g., suspension of the survey), the Department
proposed to use the OEWS to determine a statewide AEWR for the field
and livestock workers (combined) category. The Department also proposed
a tertiary safeguard if neither the FLS nor the OEWS survey reports a
statewide annual average hourly gross wage for the field and livestock
workers (combined) category in a particular State, or equivalent
district or territory. In these instances, the Department proposed to
use the OEWS survey's national annual average hourly gross wage for the
field and livestock workers (combined) category to determine the AEWR
in that State. After consideration of comments, discussed below, the
Department adopts this proposal without change.
The Department received several comments opposed to use of the OEWS
as a wage source to establish the AEWR for the field and livestock
workers (combined) category, when the FLS is not available to do so.
Some of these commenters generally opposed use of the OEWS to establish
the AEWR or set a wage floor for primarily agricultural operations,
while others expressed concern that use of the OEWS in these cases may
disconnect the AEWR from actual market wages paid to workers employed
on farms because the OEWS does not survey farms and ranches.
The Department appreciates the concerns of the commenters, but
maintains that the OEWS is the best available alternative source of
wage data to use to determine the AEWR for the field and livestock
worker (combined)
[[Page 12770]]
category if the FLS is not available. Aside from the FLS, the OEWS
survey is the only comprehensive and statistically valid source of wage
data for agricultural occupations and geographic areas common in the H-
2A program. The OEWS is also the wage source most consistent with the
SOC-based wage collection of the FLS. Within the agricultural sector of
the U.S. economy, the OEWS survey collects employment and hourly gross
wage data from farm labor contractors that support fixed-site
agricultural employers. Although the OEWS survey does not collect data
from such fixed-site agricultural employers, the farm labor contractors
surveyed by OEWS employ workers to provide agricultural labor or
services similar to that of workers employed by fixed-site agricultural
employers. In addition, farm labor contractors participate in the H-2A
program and represent an increasing share of the H-2A worker positions
certified by the Department.\60\ Data reported by these types of
employers, therefore, represent the best information available for
purposes of establishing the AEWRs when FLS data is unavailable. BLS
has the capability of providing a single annual average hourly gross
wage for the six SOC codes that comprise the field and livestock
workers (combined) category that mirrors the FLS, at both the statewide
and national levels, based on the OEWS survey data.\61\ The Department
will make these OEWS-based AEWRs, both at the statewide and national
levels, accessible to the public online.
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\60\ For example, the proportion of all H-2A worker positions
certified by DOL for employment in non-range occupations with
employers qualifying as H-2A Labor Contractors (i.e., farm labor
contractors) has increased significantly from 33.1 percent in FY
2016 (54,787 positions out of 165,741 positions) to 42.6 percent in
FY 2021 (135,314 positions out of 317,619 total positions) and 43.1
percent through August FY 2022 (151,439 positions out of 351,268
total positions).
\61\ An overview of the OEWS survey methodology is available at
https://www.bls.gov/oes/current/oes_tec.htm. An explanation of the
survey standards and estimation procedures is available at https://www.bls.gov/opub/hom/oews/pdf/oews.pdf.
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One commenter suggested alternative AEWR determination methods
would be unnecessary because, the commenter predicted, the FLS will
always be available. On the contrary, there have been, currently are,
and likely will be future instances where FLS data is unavailable to
establish an AEWR for at least some workers. For example, FLS data has
not been and currently is not available for AEWR determinations in
certain locations such as Alaska and Puerto Rico. Additionally, the FLS
may become unavailable in the future for reasons that cannot be
anticipated. As previously noted, the Department does not have control
over the FLS; the USDA does, and it could elect to suspend or even
terminate the survey at some point in the future--as it has three times
previously. In 2007 \62\ and 2011,\63\ the USDA did not conduct the
survey due to budget constraints. In 2020, the USDA announced its
intention to suspend data collection for the October 2020 survey,\64\
but was ultimately forced to conduct the survey by a federal court.
Thus, in order to ensure the Department's ability to determine AEWRs in
any circumstances in which the FLS is, or becomes, unavailable, the
Department has identified the OEWS as its alternative source of wage
data for the reasons discussed in the proposed rule and here.
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\62\ Notice of Intent to Suspend the Agricultural Labor Survey
and Farm Labor Reports, 72 FR 5675 (Feb. 7, 2007).
\63\ Notice of Intent to Suspend the Agricultural Labor Survey
and Farm Labor Reports, 76 FR 28730 (May 18, 2011).
\64\ 85 FR 61719.
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c. The Department Will Use the OEWS Survey To Establish SOC-Specific
AEWRs for All Other Job Opportunities
For H-2A job opportunities that do not fall within the FLS field
and livestock workers (combined) category, the Department proposed to
use the OEWS survey to determine SOC-specific AEWRs. Under this
methodology, the AEWR for all non-range SOC codes outside the field and
livestock workers (combined) category would be the statewide annual
average hourly gross wage for the SOC code, as reported by the OEWS
survey. If the OEWS survey does not report a statewide annual average
hourly gross wage for the SOC code, the AEWR for that State would be
the national annual average hourly gross wage for the SOC code, as
reported by the OEWS survey. In this final rule, the Department is
adopting the OEWS-based, SOC-specific AEWR methodology for these job
opportunities for the reasons explained below and in the 2020 AEWR
Final Rule (which was vacated on other grounds).\65\
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\65\ 85 FR 70445, 70453, 70458-70459.
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The Department received several comments in support of using an
OEWS-based AEWR determination for SOC codes outside of field and
livestock workers (combined) category, as well as several comments in
support of not using the FLS for SOC codes other than field and
livestock workers. For example, two workers' rights advocacy
organizations noted the FLS does not ``adequately or consistently
survey'' farm employers about positions beyond the six field and
livestock SOC codes, and many of the SOC codes outside the six field
and livestock SOC codes are more often filled as contract positions
than hired positions; thus, for positions outside the six field and
livestock SOC codes, the advantages of FLS wage findings no longer
apply. One of these two workers' rights organizations emphasized that
the multisector reach of the OEWS survey does a better job of
accurately reflecting market wage rates for positions such as truck
drivers and construction workers whose work inherently includes work
both in and outside the agricultural sector. The Department agrees with
these commenters for the reasons outlined below.
As the Department stated in the NPRM, the OEWS survey is a reliable
and comprehensive wage survey that consistently produces annual average
hourly gross wages for nearly all SOC codes other than the six codes
covering the field and livestock workers (combined) occupational
category and is, therefore, a better wage source for those other SOC
codes. The OEWS survey, which began collecting occupational employment
and wage data from employer establishments in 1996, is among the
largest ongoing statistical survey programs of the Federal government,
producing wage estimates for more than 800 SOC codes, and is used as
the primary wage source for prevailing wage determinations in the H-2B
temporary non-agricultural labor certification program, and other
nonimmigrant and immigrant programs.\66\ The OEWS program surveys
approximately 200,000 establishments every 6 months and over a 3-year
period collects the full sample of 1.2 million establishments,
accounting for approximately 57 percent of employers in the United
States.\67\ Every 6 months, the oldest data from the previous 3-year
cycle is removed and new data is added. The wages previously reported
are adjusted by the ECI, which is a BLS index that measures the change
in labor costs for businesses. The OEWS survey is conducted primarily
by mail, with telephone follow-ups to nonrespondents, or, if needed, to
clarify written responses.\68\ The OEWS
[[Page 12771]]
average \69\ hourly gross wage reported includes all gross pay,
exclusive of premium pay, but including piece rate pay.
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\66\ See, e.g., 20 CFR 655.731(a)(2)(ii)(A) (H-1B program, for
specialty (professional) workers) and 20 CFR 656.40(b)(2) (Permanent
Labor Certification program, for permanent employment of foreign
workers).
\67\ See BLS, Occupational Employment and Wage Statistics
Frequently Asked Questions, https://www.bls.gov/oes/oes_ques.htm
(last modified Aug. 13, 2021).
\68\ Id.
\69\ The OEWS uses the term ``mean.'' However, for purposes of
this regulation the Department uses the term ``average'' because the
two terms are synonymous, and the Department has traditionally used
the term ``average'' in setting the AEWR from the FLS.
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While the FLS is the most accurate and comprehensive wage source to
determine the AEWRs for the field and livestock workers (combined)
occupational group, the OEWS survey is a more accurate data source for
other SOC codes common in agricultural operations, such as supervisors,
that the FLS does not adequately or consistently survey, as noted above
and in response to comments discussed below. In addition, the OEWS
survey includes SOC codes that are more often contracted-for services
(e.g., construction supporting farm production) than farmer-employed
positions, which makes the OEWS data collection from farm labor
contractors a more direct, relevant data source for determining AEWRs
for these SOC codes than the FLS.
The Department received several comments opposing the proposed use
of the OEWS as a wage source because the OEWS does not survey fixed-
site agricultural employers directly. For that reason, some commenters
asserted that using the OEWS survey as a wage source would not reflect
the intricacies of the agricultural industry and would further remove
the wages paid using this wage source from actual market wages in
agriculture. For example, a trade association and an employer alleged
that the use of OEWS-based AEWRs for SOC codes outside the six field
and livestock workers (combined) category would force employers to pay
workers what the commenters considered to be ``private sector rates''
for certain positions, such as truck drivers, farm managers, and farm
mechanics. These commenters also shared the perspective that the skill
sets needed for each of these positions is ``materially different'' in
the agricultural versus non-agricultural sectors, primarily based on
factors such as the location, scale, or commodity involved, rather than
the qualifications or requirements of the work to be performed, a
perspective the Department disagrees with and addresses further in
Section II.C.4, below. Another employer stated that ``wages based on
surveys outside of agriculture will skew labor costs out of our ability
to pay.'' Similarly, an agent asserted that if the Department
classifies a job opportunity using an inappropriate SOC code, the
Department's OEWS-based methodology would ``widen the gap . . . in the
direction of higher AEWRs than market conditions dictate.'' \70\ The
Department is not persuaded for the reasons discussed below.
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\70\ Other commenters also addressed the potential for SOC code
assignments that employers may view as inaccurate, including
assignment of more than one SOC code to an employer's job
opportunity; these comments are addressed in the Department's
discussion of job opportunity evaluation and SOC code assignment in
Sections II.C.3 and II.C.4, below.
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As noted in the 2020 AEWR Final Rule (vacated on other grounds) and
the NPRM, the OEWS is more accurate than the FLS for SOC codes, such as
supervisors, that the FLS does not adequately or consistently survey,
and positions that are more often employed by farm labor contractors
(e.g., construction supporting farm production) than by fixed-site
agricultural employers; therefore, use of the OEWS will better protect
against adverse effects for those SOC codes. In contrast, an AEWR based
solely on the field and livestock worker (combined) category wage may
have the effect of depressing wages in these other, typically higher-
paid SOC codes because the FLS field and livestock worker (combined)
category does not reflect the wages in these SOC codes as accurately as
the OEWS survey does. This aspect of the methodology under the 2010
Final Rule did not adequately prevent adverse effects on the wages of
such workers in the United States similarly employed, contrary to the
Department's statutory mandate, as discussed above. In addition,
whereas in 2010 H-2A Labor Contractors (H-2ALCs) comprised a much
smaller percentage of participants in the H-2A program, H-2ALC
participation has grown in recent years, which supports using OEWS wage
data collected from farm labor contractors who employ workers to
perform duties not covered by the six field and livestock workers
(combined) category SOC codes, as an appropriate source of actual
market wages in agriculture to determine the AEWR for these SOC
codes.\71\
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\71\ For example, based on a review of OFLC H-2A certification
data covering 2010 through 2019, the USDA Economic Research Service
(ERS) reported that H-2ALCs (also known as Farm Labor Contractors
(FLC)) have become the dominant employer type in the vegetable and
melon sector--among the most labor-intensive agricultural sectors in
the United States. Specifically, USDA ERS noted that ``the number of
certifications obtained by both individual employers and FLCs
increased every year between 2011 and 2019; however, the number of
certifications obtained by FLCs increased faster, which led
contractors to overtake individual employers in 2016. The share of
certifications obtained by FLCs steadily increased from 17 percent
in 2011 to its maximum of 57 percent in 2018, decreasing slightly to
53 percent in both share and number in 2019.'' See USDA, Examining
the Growth in Seasonal Agricultural H-2A Labor (August 2021),
Economic Information Bulletin No. (EIB-226), https://www.ers.usda.gov/webdocs/publications/102015/eib-226.pdf?v=8349.1
(accessed September 12, 2022). More recently and based on a review
of H-2A applications covering all agricultural sectors certified by
OFLC during the most recent 3 fiscal years covering October 1, 2019,
through September 1, 2022, the proportion of H-2A worker positions
certified for employers operating as H-2ALCs increased from 36
percent in FY 2020 to more than 43 percent in FY 2022. In FY 2020,
of the 275,430 worker positions certified nationally, 99,505 (or
36.1 percent) were issued to H-2ALCs. From October 1, 2021, through
September 1, 2022, for FY 2022, of the 352,103 worker positions
certified nationally, 151,706 (or 43.1 percent) were issued to
employers operating as H-2ALCs. See https://www.dol.gov/agencies/eta/foreign-labor/performance (accessed September 12, 2022).
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The Department understands the common concern of several employers
and trade associations that OEWS-based AEWRs would, in some cases,
result in wage increases compared to the FLS-based AEWR applicable
under the 2010 Final Rule AEWR methodology. For example, a trade
association compared average wages for the three SOC codes covering
Construction Laborers, Bus Drivers, and Light Truck Drivers, based on
the 2020 OEWS and the 2021 FLS, which showed that the 2020 OEWS for
each occupation resulted in a higher AEWR than when using the 2021 FLS
for field and livestock workers (combined). Based on its independent
research, which is a topic the Department addresses in the
Administrative Information section below (Section III), another trade
association expressed concern that OEWS-based AEWRs would be
significantly higher than the national average 2010 H-2A Final Rule
FLS-based AEWR. These comments reflect the Department's concerns about
the continued use of FLS-based AEWRs for SOC codes outside the field
and livestock workers (combined) category not adequately addressing the
Department's statutory mandate regarding all H-2A job opportunities,
concerns that resulted in this rulemaking. In addition, some commenters
appeared to believe, without providing supporting evidence, that using
the OEWS survey would always produce SOC-specific AEWRs higher than the
FLS rate for the field and livestock workers (combined) category,
which, if true, would bolster the Department's concerns regarding
adverse effect of the 2010 AEWR methodology and the need for
rulemaking.
As previously stated, the Department has discretion to determine
the
[[Page 12772]]
methodological approach that best allows it to meet its statutory
mandate.\72\ The Department remains cognizant of the fact that the
``clear congressional intent was to make the H-2A program usable, not
to make U.S. producers non-competitive'' and that ``[u]nreasonably high
AEWRs could endanger the total U.S. domestic agribusiness, because the
international competitive position of U.S. agriculture is quite
fragile.'' \73\ However, the Department is not required to set the AEWR
at the highest conceivable point, nor at the lowest, so long as it
serves its purpose, and the Department may also consider factors
relating to the sound administration of the H-2A program in deciding
how to set the AEWR. The approach adopted in this final rule is
reasonable and strikes an appropriate balance under the INA. The
Department recognizes that the revised methodology may result in some
AEWR increases in those SOC codes for which the Department will use the
OEWS survey, depending upon geographic location and the specific SOC
code. These changes, however, would be the result of the Department's
use of more accurate occupational data that better reflect the actual
wage paid, and thus better protect against adverse effect. In the
Department's policy judgement, any incremental burden placed on
employers is outweighed by the benefits attendant to better protection
against adverse effect on the wages of workers in the United States
similarly employed.
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\72\ 2020 AEWR final rule at 70450, 2021 AEWR NPRM at 68176, and
Section I.A above, which cite AFL-CIO, et al. v. Dole, 923 F.2d 182,
184 (D.C. Cir. 1991) (Congress did not ``define adverse effect and
left it in the Department's discretion how to ensure that the
[employment] of farmworkers met the statutory requirements.'');
United Farmworkers v. Solis, 697 F. Supp. 2d 5, 8-11 (D.D.C. 2010)
(the Department has discretion to determine the methodological
approach that best allows it to meet its statutory mandate).
\73\ 54 FR 28037, 28046 (July 5, 1989).
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With regards to commenter concerns about variation in OEWS-based
AEWRs from year to year, the OEWS-based AEWRs generally would
experience lower rates of change per year than the FLS AEWR variations
to which employers are accustomed to adjusting. While the FLS
calculates annual findings from quarterly estimates of data collected
during a single year, ``each set of OE[W]S estimates is calculated from
six panels of survey data collected over three years,'' an approach
that moderates year-to-year fluctuation. However, as the AEWR
methodology adopted in this final rule bases AEWR adjustments on
changes in wages actually paid to similarly employed workers from year
to year, annual variation in the AEWRs--both FLS-based AEWRs and OEWS-
based AEWRs--are normal and provide the best available information on
changing market conditions.
Several commenters were concerned that by factoring in wages in
both non- metropolitan areas and metropolitan areas (where they assume
wages are higher because of a higher cost of living), the use of a
statewide OEWS wage would mean that employers in non-metropolitan areas
would be required to pay inflated wages. Another commenter expressed a
similar concern with respect to statewide or national AEWRs generally.
Two additional commenters justified support for using OEWS wage data,
rather than the FLS, for SOC codes outside of field and livestock
workers (combined) category by noting that the OEWS produces available
data at the local level, while the FLS does not capture data at this
level of precision. While the OEWS can provide data at a smaller
geographic level than statewide, such as by Metropolitan and Non-
Metropolitan Statistical Areas, the Department is adopting the proposal
to use statewide OEWS data to better protect against localized wage
depression. As explained in prior rulemakings, the Department is
concerned about localized wage depression in the H-2A program,
particularly because of the economic vulnerability of agricultural
workers and the fact that the H-2A program is not subject to a
statutory cap, which allows an unlimited number of nonimmigrant workers
to enter a given local area.\74\ Thus, a statewide wage, which includes
a broad variety of geographic areas, is more likely to protect against
wage depression from a large influx of nonimmigrant agricultural
workers that is most likely to occur at the local level.\75\ In the
Department's policy judgment, even if the commenter's assumptions were
accurate (e.g., that agricultural wage rates in metropolitan areas are
higher than those in non-metropolitan areas; that metropolitan and non-
metropolitan areas house distinct labor markets), protecting a
vulnerable workforce from wage depression outweighs potential concerns
regarding potential upward pressure on wages that may occur because of
the inclusion of metropolitan areas. For these reasons, the Department
believes it is important to use the statewide OEWS wage where one
exists for the particular SOC code. In the limited circumstances in
which there is no statewide wage, use of the national annual average
gross hourly wage reported for the particular SOC code will ensure an
AEWR determination can be made each year for each SOC code outside of
the field and livestock workers (combined) category.
---------------------------------------------------------------------------
\74\ See, e.g., 75 FR 6883, 6895.
\75\ Id. at 6899 (The Department ``consistently has set
statewide AEWRs rather than substate [ ] AEWRs because of the
absence of data from which to measure wage depression at the local
level'' and use of surveys reporting data at a broader geographic
level ``immunizes the survey from the effects of any localized wage
depression that might exist.'')
---------------------------------------------------------------------------
d. The Department's Decision Not To Use ECI-Adjusted AEWRs or Other
Methodologies Suggested in Comments
The Department received comments from employers, trade
associations, agents, and workers' rights advocacy organizations
suggesting alternative methods of determining the AEWR, including use
of the ECI; use of the wage source that produces the highest wage,
regardless of geographical or occupational scope; use of the median
wage rate, instead of the mean; implementation of a two-tiered wage
system permitting employers to pay foreign workers less; and imposition
of caps on AEWR growth. As discussed below, the Department declines to
adopt the suggested alternatives because none of them provides an
administratively feasible method of allowing the Department to carry
out its statutory mandate of ensuring that the employment of foreign
workers will not adversely affect the wages of workers in the United
States similarly employed.
Several commenters suggested the Department reconsider use of a
broad index like the ECI instead of using the FLS to determine the
AEWR, and some specifically asserted these indices are less likely to
be suspended than the FLS, and more likely to produce consistent,
moderate wage increases. Such indices, the commenters asserted, would
avoid wage stagnation among agricultural workers and ``provide wage
stability [that] is critically important to the viability of the H-2A
program.'' Three of these commenters also urged the Department to cap
AEWR increases by setting a ``percentage-change `floor' and `ceiling'
to further limit uncertainty.'' Some commenters suggested the
Department should determine the AEWR based on ``one of the myriads of
models passed in the U.S. House of Representatives,'' such as setting
the AEWR at 115 percent of Federal or State minimum wage, or by using
other similar models.
As in prior rulemakings, some commenters also asserted that the
Department should or must determine the existence of adverse effect in
particular areas or occupations before issuing any AEWR determination.
For
[[Page 12773]]
example, one commenter noted recent efforts to address truck driver
labor shortages in the United States and asserted the Department
``should provide additional analysis to determine if there is an
adverse effect on U.S. workers given these current dynamics.'' However,
as the Department and courts have long explained, the INA does not
require DOL to prove or rely on the existence of past adverse effect
but instead is focused on prevent[ing] future adverse effect.'' \76\
Further, the AEWR is one of the primary regulatory controls to
prevent--not compensate for--adverse effects.
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\76\ 54 FR 28,037, 28,046-47 (Jul. 5, 1989); 75 FR 6884, 6895
(Feb. 12, 2010) (reiterating justification for protection against
future adverse effect in 1989 rule); 73 FR 77110, 77167 (Dec. 18,
2008) (noting the D.C. Circuit observed there is no ``statutory
requirement to adjust for past wage depression''); see also 75 FR
6884, 6891 (Feb. 12, 2010) (``By computing an AEWR to approximate
the equilibrium wages that would result absent an influx of
temporary foreign workers, the AEWR serves to put incumbent farm
workers in the position they would have been in but for the H-2A
program. In this sense, the AEWR avoids adverse effects . . .'');
Overdevest Nurseries v. Walsh, 2 F.4th 977, 984 (D.C. Cir. 2021)
(finding reasonable the Department's definition of ``corresponding
employer'' based on prospective view of adverse effect, i.e.,
intended to prevent future adverse effect).
---------------------------------------------------------------------------
In contrast, a nonprofit public policy advocacy organization and a
workers' rights advocacy organization suggested the Department should
use the wage sources that results in the highest wage rate, whether
determined by either the FLS or OEWS, regardless of the SOC code or
geographic level of specificity (e.g., the Department should consider
State, regional, and national FLS data; and local, State, and national
OEWS data, when determining the AEWR). Similarly, two commenters urged
the Department to require the employer to pay the FLS-based AEWR to
workers performing duties outside the six SOC codes covering field and
livestock workers (combined) category, such as construction labor and
first-line supervisor, if this wage is higher than the OEWS-based AEWR
for the SOC code(s).
The Department declines to adopt the use of the ECI or other broad
indices to determine the AEWR, even if the use of such indices would
provide greater wage continuity and predictability from year-to-year.
Unlike the FLS and OEWS, which provide actual wage data in the States
and regions where these workers are employed, the ECI provides a
general measure of changes in the cost of labor across the private
sector in the United States, but does not provide actual wage data for
agricultural workers in particular geographic areas. In addition, the
FLS--the Department's preferred wage source for establishing the AEWR
for the field and livestock workers (combined) category--is again
available, eliminating the Department's primary impetus for having
elected to use the ECI to adjust AEWRs in future years under the since-
vacated 2020 AEWR Final Rule. Where the FLS is not available, the
Department believes that the OEWS survey is better suited to
determining the AEWR for H-2A applications involving non-range job
opportunities, and a better substitute to use to determine the AEWR
when the FLS is not available than using the ECI for adjusting AEWRs,
because the OEWS survey provides actual wage data specifically tailored
to geographic areas and non-range occupations common in the H-2A
program.\77\ As the FLS and OEWS surveys both consistently report wage
data annually, the Department declines to adopt an indexing mechanism,
like the ECI, to determine the AEWR.
---------------------------------------------------------------------------
\77\ Since 2015, the Department has adjusted the AEWR applied to
H-2A range occupations using the ECI. The nature of range
occupations--located in remote areas, with non-traditional work
schedules that generally require workers to be on call 24 hours per
day, 7 days per week--required the Department to adopt a different
AEWR methodology for range occupations than non-range occupations.
See 80 FR 62958, 62986 (Oct. 16, 2015). The Department explained at
length the reasoning for using a base minimum wage adjusted by the
ECI for these occupations, rather than the FLS or OEWS. See 80 FR at
62991-62992.
---------------------------------------------------------------------------
The Department also declines to adopt a methodology that would set
the AEWR at a predetermined minimum wage, such as the State minimum
wage, or some version of an enhanced local, State, or Federal minimum
wage. Such predetermined wages would be untethered from data on wages
employers pay to workers in the United States similarly employed. As
explained in prior rulemakings, the Department establishes the AEWR for
non-range job opportunities based on actual wages paid by agricultural
employers to workers in the United States similarly employed.
Establishing an AEWR for all H-2A job opportunities, based on either
the Federal minimum wage or the applicable local or State minimum wage,
would not meet that purpose, and would instead immediately and
dramatically reduce the wages of many H-2A and similarly employed
workers in the United States \78\ and not be responsive to actual
increases or decreases in wages paid in SOC codes common in the H-2A
program. As the Department noted ``a single national AEWR applicable to
all agricultural jobs in all geographic locations would prove to be
below market rates in some areas and above market rates in other areas,
resulting in all of the associated adverse effects'' discussed
above.\79\
---------------------------------------------------------------------------
\78\ For example, the AEWR in Nebraska in 2022 was $16.47 per
hour. Using the Nebraska State minimum wage of $9.00 per hour in
2022, or 115 percent of the Federal minimum wage (i.e., $10.35 per
hour) would significantly reduce the wages of H-2A workers and
workers in the United States similarly employed.
\79\ 73 FR 8537, 8550 (Feb. 13, 2008).
---------------------------------------------------------------------------
For similar reasons, the Department declines to impose an arbitrary
cap on wage increases. As discussed above, the AEWR is based on surveys
of actual wages paid or projected to be paid to workers in the United
States similarly employed, and changes in the AEWR reflect changes in
wages employers pay to these workers. Commenters did not provide a
reasoned economic basis to impose an arbitrary cap on H-2A wages, and
imposition of such a cap would produce wage stagnation, most
significantly in years when the wages of agricultural workers are
rising faster due to strong economic and labor market conditions. As
with the other methods suggested by commenters, this disconnection
between actual wages paid and a capped AEWR is contrary to the
Department's statutory mandate.
The Department also declines to implement the workers' rights
advocacy organization commenters' proposals to require employers to pay
the highest of all wage sources in the proposed methodology, regardless
of the applicable SOC code or geographic scope. As noted above and in
prior rulemaking, the FLS is a ``superior wage source. . .'' for field
and livestock worker job opportunities for many reasons, including the
comparatively broad geographic scope and the fact that ``only the FLS
directly surveys farmers and ranchers and the FLS is recognized by the
BLS as the authoritative source for data on agricultural wages.'' \80\
The workers' rights advocacy commenters did not state that the higher
wage would be a more accurate wage, nor did they allege deficiencies in
the FLS for particular States or regions or for specific field and
livestock worker job opportunities. Because the FLS is the most
accurate and best available wage information source for field and
livestock workers, the Department has limited use of the OEWS to
circumstances in which the FLS is not available to determine the AEWR
for the field and livestock workers (combined) category and for those
SOC codes not adequately surveyed or represented by the FLS. Requiring
payment of the highest wage rate among all available
[[Page 12774]]
sources at all levels of geographic specificity, regardless of the
applicable SOC code(s), would, in many cases, require an employer to
pay an enhanced wage untethered to the best available information on
the actual wages paid to similarly employed workers. This result would
not only unreasonably increase the labor costs of H-2A employers in
those cases, but could reduce agricultural job opportunities and place
unnecessary upward pressure on wages in order for employers to attract
a sufficient number of available workers. The Department believes this
approach does not reasonably ``balance the competing goals of the
statute--providing an adequate labor supply and protecting the jobs of
domestic workers.'' \81\
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\80\ 84 FR 36168, 36183-36184, 36243 (July 26, 2019).
\81\ Am. Fed'n. of Labor & Cong. of Indus. Organizations (AFL-
CIO) v. Dole, 923 F.2d 182, 187 (D.C. Cir. 1991).
---------------------------------------------------------------------------
The proposed system of multiple potential wage sources for all H-2A
job opportunities also would result in an exceedingly complex and
confusing set of minimum wages. The use of sub-state level OEWS wages,
for example, would introduce significant complexities in establishing
the offered wage. Agricultural associations filing master applications
that cover members and worksites across two States or other job
opportunities involving work across multiple States according to a
planned itinerary would have to keep pace with many dozens of different
local wage sources and the potential adjustments to each of those
during the course of a work contract period. The wage payment,
recordkeeping, and compliance burden associated with that kind of AEWR
methodology would be substantial and unjustifiable.
In addition to the comments discussed above, the Department
received some comments requesting specific changes to aspects of
existing wage data sources or the Department's use of them. One
commenter objected to the Department's use of the mean wage rate to
calculate the AEWR and suggested that the Department calculate the AEWR
using the median wage rate, which the commenter asserted would produce
a more representative wage because it would prevent ``outliers'' on
both the low and high end of the wage distribution from unduly
influencing the AEWR. In addition, the commenter suggested the
Department consider only guaranteed hourly rates, not piece or
incentive pay, when determining the AEWR to ``avoid a skewed wage
floor.'' The commenter noted that the USDA considered modifying the FLS
to capture only base pay data, but ``reverted back to reporting the
gross rate of pay'' due to ``funding limitations . . .'' The commenter
also suggested the Department consider data on wages paid to H-2A
workers and corresponding workers when determining the AEWR in areas
where ``more than ten percent of the agricultural workforce is composed
of H-2A workers . . .'' The commenter asserted that in these areas, an
AEWR based only on wages paid to U.S. workers would lead to
disproportionate annual wage increases because non-H-2A employers set
their wages above the AEWR each year to ensure retention of their U.S.
workers.
Another commenter suggested the Department adopt a two-tiered wage
system under which employers would pay the OEWS rate to U.S. workers
performing duties like construction labor but would pay foreign workers
performing the same or similar duties the AEWR based on FLS data for
the field and livestock workers (combined) category. The commenter
acknowledged this would provide employers an incentive to hire foreign
workers over U.S. workers, but suggested the Department could counter
this incentive by ``imposing additional penalties and scrutiny on U.S.
employers [for] failing to hire domestic labor . . .''
As noted in prior rulemakings, the Department believes use of the
mean wage best meets the Department's obligation to protect workers in
the United States similarly employed against the adverse effects on
their wages that could be caused by the employment of foreign
workers.\82\ The Department has a long-standing practice of using the
average or mean wage to determine the AEWR in the H-2A program, and it
uses the mean wage within the OEWS wage distributions to determine
prevailing wages for other employment-based visa programs. The
Department declines to use the median because it does not represent the
most predominant wage across a distribution, but instead represents
only a midpoint. The mean provides equal weight to the wage rate
received by each worker in the SOC code across the wage spectrum and
represents the average wage paid to workers to perform jobs in the SOC
codes.\83\ Setting the AEWR below the mean in the relatively less
skilled agricultural SOC codes that predominate in the H-2A program may
have a depressive effect on the wages of workers in the United States
similarly employed. Use of the mean is also consistent with the
Department's determination of prevailing wages for other foreign worker
programs.
---------------------------------------------------------------------------
\82\ See 80 FR 24146, 24159-24160 (Apr. 29, 2015); see also 78
FR 24047, 24058 (Apr. 24, 2013).
\83\ See 80 FR 24146, 24159 (Apr. 29, 2015).
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The Department also declines to exclude piece rate or incentive pay
from FLS data or to request that USDA modify the FLS so that it reports
a base pay that excludes piece rate and incentive pay. Comments
suggesting the Department modify or seek modification of FLS
methodology are beyond the scope of this rulemaking. As noted in prior
rulemaking, the Department does not have control over the FLS, and the
FLS is not conducted exclusively for the purpose of setting the AEWR.
Similarly, the OEWS survey is not produced exclusively for temporary
agricultural labor certification purposes, and it collects wage data
for straight-time, gross pay, exclusive of premium pay, which includes
incentive-based pay and production bonuses, for example. Moreover, as
some agricultural jobs guarantee only the State or Federal minimum wage
and otherwise pay based on a piece rate, advertising an hourly wage
that does not include ``incentive pay'' is not a reasonable ``base
rate'' for H-2A employers to advertise to U.S. workers.
With regard to the comment suggesting the wages of H-2A workers be
``considered'' when determining the AEWR using the FLS, the Department
notes that FLS collects wage data for all workers, which necessarily
includes wage data for H-2A workers. It is appropriate to base the AEWR
on actual wages paid to all similarly employed workers since the AEWR,
as the wage necessary to ensure the employment of foreign workers does
not adversely affect the wages of workers similarly employed in the
United States, should be based on market conditions. To the extent the
commenter may be suggesting a methodological change to wage data
collection through the FLS, the suggestion is beyond the scope of this
rulemaking.
Finally, the Department declines to adopt a two-tiered system by
which employers' wage obligations to U.S. workers are determined using
an OEWS-based, SOC-specific wage rate, while their wage obligations to
foreign workers are determined using the FLS without regard to the
applicable SOC code. To do so would create a wage system that
advantages H-2A employers over non-H-2A employers, bases skilled H-2A
worker wages on wage data that does not cover similarly employed
workers in the SOC code (e.g., construction), and provides a
disincentive to the hiring of U.S. workers that is contrary to the INA
and cannot be justified through increased
[[Page 12775]]
enforcement or scrutiny of program users and the labor market test.
Having considered the concerns of commenters, including both
employers and workers' rights advocacy organizations, the Department
has determined that adoption of the methodology proposed in the NPRM
will best allow the Department to fulfill its statutory mandate and
balance the competing goals of the statute. The methodology in this
final rule uses the OEWS to provide appropriate wage increases for many
highly skilled workers in positions like construction labor and first-
line supervisors, and will better protect the wages of workers in
States or regions where the FLS does not provide wage data. The
methodology continues to base the AEWR for the field and livestock
workers (combined) category on the FLS, the most accurate and reliable
source of wage information for most agricultural job opportunities in
the H-2A program. Finally, the Department notes that prevailing wages
for particular geographic areas and agricultural activities, determined
using State-conducted prevailing wage surveys, will continue to serve
as an important protection for workers in crop and agricultural
activities that offer piece rate pay or higher hourly rates of pay than
the AEWR.\84\
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\84\ See 84 FR 36168, 36179-36180 (July 26, 2019) (discussing
the purpose and interaction of the AEWR and PWD and changes the
Department recently proposed to modernize the PWD process and
``empower States to produce a greater number of reliable prevailing
wage survey results.'').
---------------------------------------------------------------------------
2. The Department Will Publish FLS-Based AEWRs and OEWS-Based AEWRs
Coinciding With Those Surveys' Publication Schedules
The Department proposed to continue to require the OFLC
Administrator to publish an AEWR update as a notice in the Federal
Register at least once in each calendar year, on a date to be
determined by the OFLC Administrator. The Department explained in the
NPRM that the OFLC Administrator would apply this annual notification
requirement to each of the AEWRs to be determined under the proposed
methodology. Therefore, the OFLC Administrator would publish an
announcement in the Federal Register to update the AEWRs based on the
FLS, effective on or about January 1, and a separate announcement in
the Federal Register to update the AEWRs based on the OEWS survey,
effective on or about July 1. See 86 FR 68174, 68184 (Dec. 1, 2021).
After considering the comments on this proposal, addressed in detail
below, the Department adopts the proposal with technical conforming
edits to 20 CFR 655.120(b)(2).\85\
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\85\ Technical changes to 20 CFR 655.120(b)(2) were necessary
because of the vacatur of the 2020 AEWR Final Rule and the
publication of the 2022 Final Rule. The 2022 Final Rule reinstated
the 2010 Final Rule's AEWR methodology and therefore reinstated the
2010 Final Rule's language regarding OFLC's publication of the
AEWRs, i.e., referring to publication of the AEWRs ``for each
State.'' 87 FR 61660, 61796 (Oct. 12, 2022); 75 FR 6884, 6962 (Feb.
12, 2010). The new methodology adopted in this AEWR Final Rule
renders the reference to ``each State'' inapt, and therefore section
655.120(b)(2) in this rule refers simply to ``each AEWR.''
---------------------------------------------------------------------------
Two workers' rights advocacy organizations expressed support for
the Department's proposal to issue new AEWRs at two points in the year
based on the separate release schedules of FLS and OEWS survey data.
These commenters viewed the proposal as a method of ensuring that the
AEWR reflects real-time changes to wages in the labor market. In
addition, these commenters stated the approach would provide clarity
and predictability to both employers and workers.
Comments from trade associations, an employer, and an agent opposed
the proposal to use two different AEWR adjustment cycles, one for FLS-
based AEWRs and one for OEWS-based AEWRs. These commenters expressed
concern that the two cycles of AEWR adjustment could create conflict
among employees and add complexity and confusion for employers. For
example, two trade associations observed that the different AEWR
adjustment cycles could result in some employees receiving a mid-season
wage increase, while other employees, whose work is subject to the
other AEWR adjustment cycle, would not. One of the same trade
associations and a third trade association asserted that separate
publications of the AEWRs, particularly with the OEWS-based AEWR
adjustment occurring during the growing season, would cause budget,
planning, and contracting challenges for farmers who use the H-2A
program.
The Department appreciates the opportunity to clarify that the
incidence of H-2A job opportunities that are assigned multiple SOC
codes and subject to two different AEWR adjustment cycles is expected
to be rare, and that the vast majority of H-2A job opportunities will
continue to be subject only to FLS-based AEWR adjustment, effective on
or about January 1. Based on program experience, discussed above, and
the Department's approach to evaluating the SOC code(s) applicable to
an employer's job opportunity, discussed below, the Department
estimates that approximately 98 percent of H-2A job opportunities will
experience no change in assigned SOC code, wage source, or AEWR
adjustment cycle under this final rule. The OFLC Administrator will
continue to announce the FLS-based AEWR adjustment--which potentially
impacts all job opportunities classified in the field and livestock
workers (combined) occupational group located in the 49 States covered
by the FLS--with an effective date on or about January 1. For those job
opportunities classified in the field and livestock workers (combined)
occupational group that are not located in the 49 States covered in the
FLS (e.g., job opportunities in Alaska), the methodology adopted in
this final rule will establish a single statewide AEWR, adjusted
annually based on the OEWS survey wage data release, with an effective
date on or about July 1. Similarly, an H-2A job opportunity classified
with an SOC code outside the six SOC codes within the field and
livestock workers (combined) category will be subject only to a single
AEWR adjustment cycle, as the final rule will establish a single
statewide AEWR for each SOC code outside the field and livestock
workers (combined) category, adjusted annually based on the OEWS survey
wage data release, with an effective date on or about July 1. Both
annual AEWR adjustment notices will potentially impact an employer's
wage obligation to workers under a temporary agricultural employment
certification only in the rare circumstances in which a job opportunity
requires workers under the job order or work contract to perform not
only field and livestock workers (combined) category duties (e.g.,
grading and sorting produce), but also duties from another SOC code
(e.g., transporting produce to storage or market using a heavy tractor
trailer, transporting workers using vans) for which the OEWS-based AEWR
may be higher. Also, where an employer files multiple H-2A
applications, each for distinct job opportunities within the employer's
agricultural operation, the employer's wage obligation to the workers
hired under one certified application may be potentially impacted by
one AEWR adjustment notice (e.g., the FLS-based AEWR adjustment in
January), and its wage obligation to the workers hired under the other
certified application may be potentially impacted by another AEWR
adjustment notice (e.g., the OEWS-based AEWR adjustment in July). For
example, if an employer submits an H-2A application for workers to
grade and sort produce and a separate H-2A application for a first-line
supervisor, the employer's
[[Page 12776]]
wage obligation for worker(s) engaged in grading and sorting produce
would potentially be impacted by the FLS-based AEWR adjustment notice
in January, and its wage obligation for the worker(s) engaged in first-
line supervisory duties would potentially be impacted by the OEWS-based
AEWR adjustment notice in July. Although some employers may be required
to evaluate and implement payroll adjustments corresponding with both
AEWR adjustment cycles, the Department anticipates the incidence of a
single temporary agricultural employment certification being subject to
both AEWR adjustment notices to be rare, primarily given the prevalence
of H-2A job opportunities encompassed within the field and livestock
workers (combined) category. In addition, the Department considers the
likelihood of confusion or disruption among workers subject to
different temporary agricultural employment certifications to be low.
Some employers and a trade association suggested the Department
revise the proposed rule to limit the potential for change in the AEWR
from year-to-year, such as by implementing an annual cap on AEWR
adjustment increases. Two of these commenters expressed concern that
unmoderated year-to-year AEWR increases could outpace wage growth in
local economies, may not reflect current conditions in the agricultural
economy, and would not allow the program to function properly. The
Department understands the importance of stability and predictability
for both growers and workers, but declines to adopt the commenters'
suggestion to cap annual AEWR increases. As explained in the previous
section, the AEWR serves its purpose best when it reflects actual wages
paid to similarly employed workers from year to year.
3. AEWR Bifurcation and Disaggregation of SOC Codes
The Department proposed to bifurcate the determination of AEWRs for
the field and livestock workers (combined) category, a group of six
SOCs, from the determination of AEWRs for work performed in any other
SOC codes that qualify for the H-2A program. For H-2A job opportunities
represented by the six SOC codes comprising the field and livestock
workers (combined) category that the FLS reports--which comprise
approximately 98 percent of H-2A job opportunities--the Department
proposed to continue to determine a single statewide AEWR, as proposed
in paragraph (b)(1)(i). For any non-range occupations other than the
six field and livestock workers (combined) SOC codes, the Department
proposed to determine a distinct statewide AEWR for each SOC code
(i.e., disaggregate the AEWR by SOC code), as proposed in paragraph
(b)(1)(ii). After considering comments, discussed in detail below, the
Department adopts these proposals without change.
A variety of commenters, including workers' rights advocacy
organizations, trade associations, a nonprofit public policy advocacy
organization, and an employer, supported the proposed bifurcation. The
consensus among commenters who supported the proposal was that a single
statewide AEWR for the field and livestock workers (combined) category
provides some stability and consistency for employers and workers.
Among commenters who expressed concern about the proposal to
bifurcate AEWR determinations, a trade association opposed bifurcation
as ``arbitrary and capricious,'' asserting that the Department did not
substantiate the premise that continuing to use a single statewide AEWR
for all workers in the H-2A program may adversely affect wages of
workers who perform the duties of SOC codes outside the field and
livestock workers (combined) category. Conversely, a workers' rights
advocacy organization suggested the Department use occupation-specific
AEWRs for all job opportunities, unless the Department would exclude
SOC code 45-2091 (Agricultural Equipment Operators) and aquaculture
work \86\ from paragraph (b)(1)(i) (field and livestock workers
(combined) category). This commenter asserted that agricultural
equipment operator and aquaculture work is differently skilled and
higher paying than the other work in the field and livestock workers
(combined) category, making an AEWR determined using field and
livestock workers (combined) category wage data inaccurate for this
work. In contrast, another trade association asserted that the
Department should expand the group of SOC codes subject to paragraph
(b)(1)(i) to include SOC code 53-3032 (Heavy and Tractor-Trailer Truck
Drivers), alleging that such job opportunities involve skills that are
readily learned in a short period of time and do not increase with
long-term experience. Similarly, several other commenters, including
trade associations and employers, advocated expanding the SOC codes
subject to the single statewide AEWR determination under paragraph
(b)(1)(ii) to include SOC code 53-3032 (Heavy and Tractor-Trailer Truck
Drivers) as well as, for example, SOC code 45-1011 (First-Line
Supervisors of Farming, Fishing, and Forestry Workers) and SOC code 47-
2061 (Construction Laborers),\87\ asserting that field and livestock
workers generally perform a variety of duties, some of which are
included within one (or more) of these SOC codes.
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\86\ Aquaculture is not a distinct SOC code within the SOC
system. Rather, aquaculture tasks are encompassed in SOC code 45-
2093 (Farmworkers, Farm, Ranch, and Aquacultural Animals).
\87\ The commenters did not identify the occupations by SOC
codes, although one capitalized the titles of the three occupations
highlighted, which correspond to the SOC codes noted.
---------------------------------------------------------------------------
Some commenters expressed concern regarding the potential impact of
the proposal on employers whose H-2A job opportunities involve tasks
not encompassed within the field and livestock workers (combined)
category SOC codes, which would be subject to the AEWR determinations
under paragraph (b)(1)(ii). Commenters, including trade associations, a
government agency, a State government, and an employer, commented that
the proposed methodology would have a greater impact on smaller
operations, where a worker is more likely to be required to perform a
wider variety of duties, than on a larger operation, which may be more
likely to have specialized positions. A trade organization asserted
that the proposals would price one part of the industry--presumably
those hiring workers to perform duties outside the field and livestock
workers (combined) occupational group--out of existence.
The Department declines to expand or contract the group of six SOC
codes for which the Department will use the FLS to establish a single
statewide AEWR, where available. The Department's objective in this
rulemaking is to establish an administratively efficient method for
producing AEWRs sufficiently tailored to protect workers in the United
States similarly employed. By using the same group of six SOC codes as
the FLS uses to report its single wage finding for its field and
livestock workers (combined) category, the Department satisfies its
objective of basing AEWR determinations on actual wage data for workers
in the United States similarly employed, when such data is available.
In addition, the broad, overlapping nature of tasks listed in the
Occupational Information Network (O*NET) for the six field and
livestock workers (combined) SOC codes is consistent with comments
above providing anecdotal accounts of common tasks performed in
agricultural
[[Page 12777]]
operations and the variety of duties employers may require of field and
livestock workers during a typical workday or intermittently during the
period of employment. Establishing a single statewide AEWR for this
group of six SOC codes provides a reasonable amount of flexibility with
respect to the type of duties a field and livestock worker may perform
without added recordkeeping, administrative burden, or uncertainty
regarding wage obligations. While the Department finds a single
statewide AEWR for this group of SOC codes to be appropriate, applying
that AEWR to other SOC codes would not satisfy the Department's
objective to strikes a reasonable balance between the statute's
competing goals of providing employers with an adequate supply of legal
agricultural labor and protecting the wages and working conditions of
workers in the United States similarly employed. For other SOC codes,
such an approach would not use actual wage data for workers similarly
employed to determine the AEWR. Both employers and workers benefit from
a clear process to ensure that work is correctly compensated.
Although the Department's experience indicates that the duties in
most H-2A job opportunities fall within the field and livestock workers
(combined) category, subject to the single statewide AEWR determination
under paragraph (b)(1)(i), the Department recognizes that some H-2A job
opportunities may include duties that fall both within and outside of
that category. For example, some employers may submit H-2A applications
for job opportunities that require workers to perform a variety of
duties (e.g., general crop tasks encompassed in SOC code 45-2092
(Farmworkers and Laborers, Crop, Nursery, and Greenhouse) and
construction work encompassed in, e.g., SOC code 47-2061 (Construction
Laborers)). For these types of mixed job opportunities, discussed in
Section II.C.4, the Department believes that using the AEWR for the
higher paid SOC code is necessary to prevent adverse effects on the
wages of workers in the United States similarly employed resulting from
inaccurate SOC code assignment.
Given the significance of the SOC code in determining the
applicable AEWR under the proposed rule, some commenters expressed
concern or requested clarification regarding the SWA and Certifying
Officer's evaluation of an employer's H-2A job opportunity to determine
its occupational classification (i.e., SOC code). Commenters expressed
concern that SOC code determination would create processing delays and
inefficiency, rather than simplifying the process for ensuring that
workers are correctly compensated. Several trade associations
anticipated that employers would file additional applications for each
distinct SOC code, and that SWAs and the Department would therefore be
required to process those additional applications, increasing the
administrative burden. One of the trade associations and an agent
expressed concern about uncertainty for employers who may not be able
to anticipate the AEWR to be applied to their H-2A job orders. Comments
expressed concern that it could be difficult and would be an
administrative burden for the Department to determine SOC codes, that
the Department's SOC code determinations would be based on infrequently
performed tasks, and that, as a result, wage obligations could
dramatically increase. Some commenters asserted the proposals would be
unworkable because tracking a worker's time performing tasks subject to
different pay rates would increase administrative burden, with one
employer additionally expressing concern about increased compliance
liability.
The Department shares the commenters' interest in methodological
clarity, processing efficiency, and accurate determinations; and
straightforward application of wage obligations during the employment
period. The Department accounted for these interests in its proposal to
apply a single statewide AEWR to all job opportunities within one of
the six field and livestock workers (combined) SOC codes. As a group,
the six field and livestock workers (combined) SOC codes encompass the
tasks required in approximately 98 percent of H-2A job opportunities.
Each of the six SOC codes encompasses a broad variety of tasks, some of
which overlap (i.e., the same or similar duties are included in more
than one of the six SOC codes). Although an employer may not be certain
whether the SWA and Certifying Officer (CO) will assign SOC code 45-
2092 (Farmworkers and Laborers, Crop, Nursery, and Greenhouse) or SOC
code 45-2091 (Agricultural Equipment Operators) to a particular job
opportunity, for example, the same statewide AEWR would apply to that
job opportunity under either SOC code. All job opportunities that
require workers to perform tasks fully encompassed in any one or more
of the field and livestock workers (combined) SOC codes will be subject
to the same statewide AEWR. Using this approach will provide a
reasonable level of flexibility in a worker's agricultural duties and
predictability in employer wage obligations, while ensuring that the
wages of workers in the United States similarly employed are not
adversely affected. This approach also provides continuity, a
reasonable level of predictability, and wage protections to workers who
may perform work encompassed within multiple SOC codes included in the
field and livestock workers (combined) category, whether during a
workday or a work contract period.
The Department reiterates that it has discretion to determine the
methodological approach that it believes best allows it to meet its
statutory mandate to ensure that the employment of H-2A foreign workers
does not adversely affect the wages of workers in the United States
similarly employed. In exercising that discretion, the Department
considered issues relating to the sound administration of the H-2A
program, such as uniformity in process and predictability in AEWR
determinations, protecting workers, and providing efficient temporary
agricultural labor certification determinations to employers, among
other factors. In the Department's policy judgment, the benefits of a
more tailored AEWR, based on actual wage data for similarly employed
workers, outweigh the added complexity of the proposed methodology
because it ensures work that is not encompassed within the six SOC
codes applicable to the field and livestock workers (combined) category
will be more accurate and better reflect market conditions for workers
in those occupational classifications. In addition, the Department is
not required to set the AEWR at the highest or lowest conceivable
point. The Department is exercising its broad discretion in this
rulemaking to revise the AEWR methodology in a way that more accurately
yields an appropriate wage determination reflective of wages paid to
workers in the United States similarly employed for each H-2A job
opportunity. The Department has determined the AEWR methodology that
best protects such workers and supports sound administration of the H-
2A program is the bifurcated methodology in this final rule, under
which the Department will continue to issue a single, statewide AEWR
for job opportunities in the field and livestock workers (combined)
category using the FLS, when available, and will issue an SOC-specific
statewide AEWR based on the OEWS survey for all other non-range
[[Page 12778]]
job opportunities. The Department adopts the proposal in this final
rule.
4. For Job Opportunities Involving a Combination of SOC Codes, the
Highest AEWR for the Assigned SOC Codes Governs the Employer's Wage
Obligation
The Department's H-2A regulations governing an H-2A employer's wage
obligations at 20 CFR 655.120(a), 655.120(c)(3), and 655.122(l) refer
to ``the AEWR'' in the singular. Similarly, 20 CFR 655.120(b)(3) refers
to ``the updated AEWR'' in the singular. The Department recognizes that
the AEWR methodology proposed in this rulemaking could result in more
than one AEWR determination applicable to an employer's H-2A job
opportunity; an employer's H-2A job opportunity may require skills and
duties that are encompassed within more than one SOC code and the
assigned SOC codes may be subject to different AEWR determinations. For
example, if an employer chooses to file a single H-2A application
requiring workers to perform a variety of duties covering multiple SOC
codes, the H-2A job opportunity may be assigned one SOC code that is
subject to the AEWR determined under paragraph (b)(1)(i) (e.g., SOC
code 45-2092 (Farmworkers and Laborers, Crop, Nursery, and Greenhouse))
and another SOC code subject to an AEWR determined under paragraph
(b)(1)(ii) (e.g., SOC code 45-1011 (First-Line Supervisors of Farming,
Fishing, and Forestry Workers)), or an employer's H-2A job opportunity
may be assigned more than one SOC code subject to more than one AEWR
determined under paragraph (b)(1)(ii) (e.g., SOC code 45-1011 (First-
Line Supervisors of Farming, Fishing, and Forestry Workers) and SOC
code 47-2061 (Construction Laborers)). To address potential confusion,
and for conformity, the Department proposed paragraph (b)(5). Under
proposed paragraph (b)(5), if an employer's H-2A job opportunity were
assigned more than one SOC code, and the SOC codes assigned are subject
to different AEWR determinations, the highest of the applicable AEWR
determinations would be ``the AEWR'' and ``the updated AEWR'' for
purposes of the employer's H-2A program wage obligations.\88\ That is,
the highest of the AEWRs applicable to the H-2A job opportunity would
be ``the AEWR'' in 20 CFR 655.120(c)(3) and 655.122(l) and ``the
updated AEWR'' in 20 CFR 655.120(b)(3), which is then compared to the
other wage sources (e.g., a prevailing wage determination or State
minimum wage) in 20 CFR 655.120(a). The highest wage rate applicable to
the H-2A job opportunity among those in 20 CFR 655.120(a) is the
employer's minimum H-2A wage obligation. After considering public
comments and providing clarification and examples of the provision's
application to H-2A job opportunities, the Department adopts the
proposal.
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\88\ The proposal in the 2021 AEWR NPRM is consistent with the
Department's proposal in the 2019 AEWR NPRM, which was adopted in
the now-vacated 2020 AEWR Final Rule.
---------------------------------------------------------------------------
A trade association commented that the Department's proposal in
paragraph (b)(5) is unnecessary because employers already voluntarily
offer wages higher than the AEWR for job opportunities that require
workers to perform the duties of multiple SOC codes due to market
pressure. Although the Department recognizes that some employers offer
and pay wages higher than the wage floor established through the AEWR,
the Department continues to view paragraph (b)(5) as an important
clarification regarding the AEWR determination to be used to evaluate
an employer's wage obligations in the H-2A program and an essential
component of the Department's responsibility to prevent adverse effect
on the wages of workers in the United States.
While H-2A job opportunity assessment and SOC code assignment,
discussed in more detail below, is both consistent with long standing
practice in the H-2A program and OFLC's practice across the employment-
based visa programs it administers (e.g., H-2B and H-1B), the proposed
AEWR methodology introduced the potential for an employer's H-2A job
opportunity to have more than one applicable AEWR determination.
Paragraph (b)(5) was intended to address the rare situation in which an
employer chooses to file a single H-2A application requiring workers to
perform a variety of duties covering multiple SOC codes by using an
approach consistent with prevailing wage determinations in other
employment-based programs OFLC administers (e.g., H-2B and H-1B).
Similarly, under paragraph (b)(5), the CO will use the highest AEWR
among those applicable to the SOC codes assigned an employer's H-2A job
opportunity as ``the AEWR'' used to evaluate the employer's wage
obligations under 20 CFR 655.120(a), 655.120(b)(3), 655.120(c)(3), and
655.122(l). As previously discussed, SOC codes not included in the
field and livestock worker (combined) data collection generally account
for more specialized, higher paid job opportunities (e.g., construction
labor, logging workers, heavy truck and tractor-trailer drivers, first-
line supervisors). However, in some cases, an SOC code not included in
the field and livestock workers (combined) data collection may have a
lower statewide OEWS survey result than the FLS survey result for field
and livestock workers (combined) category. Where an employer's job
opportunity involves a variety of duties, some of which are consistent
with higher paid SOC codes in the State, territory, or equivalent area,
the Department would not satisfy its statutory obligation if it were to
establish the required wage floor for H-2A employers at a lower rate
than the AEWR applicable to workers in the United States who perform
work in the higher paid SOC code. An AEWR determined using the lower-
paid SOC code does not adequately guard against adverse effect on the
wages of workers in the United States similarly employed. In contrast
to anecdotal concerns expressed in comments about a wage requirement
based on duties performed for a minimal amount of time, which are
discussed below, the Department generally finds that duties requiring
particular skills are typically assigned to a subset of an employer's
workforce--those workers who have qualifications or experience related
to the duties--and, as a result, the amount of time spent performing
those duties is not minimal. In addition, determining the AEWR
applicable to an employer's job opportunity using the highest of the
AEWRs applicable to all duties to be performed provides predictability,
consistency, and administrative efficiency with regard to H-2A program
wage requirements, which benefits both employers and workers.
Among comments that addressed this proposal, many expressed concern
regarding how employers would adjust their operations (e.g., division
of labor, number of jobs offered, types of jobs offered) due to the
perceived impact of paragraph (b)(5). Commenters asserted that the
proposal would result in higher wage obligations for employers who
include a variety of duties in the H-2A job order, which the employer
considers to be routine farm work, but which the Department views as a
combination of SOC codes subject to a higher AEWR determination.
Commenters asserted that employers would have to reorganize operations
in order to offer single-SOC code job opportunities in their H-2A
applications, which would result in more H-2A applications per employer
and operational disruptions, such as less flexibility in work
assignments, more recordkeeping and
[[Page 12779]]
worker oversight, and confusion or conflict among workers paid at
different rates. In addition, these commenters asserted that some
employers would have to hire more workers to perform the more limited
spectrum of duties of each SOC-specific H-2A application, potentially
for short periods, and some employers may not be able to offer a full-
time job opportunity to perform only those duties. Another trade
association asserted that employers would reduce operations or
otherwise reduce job opportunities due to the impact of the AEWR
methodology proposed. Expressing concern with burden and cost
associated with filing H-2A applications, a State government, an
employer association and its members, a trade association, and an agent
asked the Department to clarify whether employers will be required to
file multiple applications for different SOC codes and urged the
Department to permit an employer to include several SOC codes in one
job order.
The AEWR methodology adopted in this final rule does not dictate
how many H-2A applications an employer may choose to file, the duties
included in each H-2A application filed, or whether an employer chooses
to address its labor needs through the H-2A program or through options
other than the H-2A program. Rather, it provides a minimum wage rate
threshold that an employer must offer and pay a worker for performing
the H-2A job opportunity, including those H-2A job opportunities that
require a worker to perform a combination of tasks that cannot
reasonably be classified within a single SOC code. The Department
understands that the AEWR determination applicable to an H-2A job
opportunity--and the employer's resulting H-2A wage obligation--and the
costs or benefits associated with filing multiple single-SOC code-
specific H-2A applications or filing one H-2A application for a job
opportunity encompassing a combination of duties from multiple SOC
codes, subject to paragraph (b)(5), may be factors employers weigh when
making business decisions regarding their agricultural operations.
However, the Department maintains that the final rule does not require
employers to file additional SOC-specific H-2A applications for job
opportunities that require performing job duties encompassed by a
combination of SOC codes. Employers may determine whether it is more
cost effective--or beneficial to their business operation in other
ways--to file one H-2A application for a job opportunity encompassing
duties of more than one SOC code; to file more than one H-2A
application, each focused on the duties of a single SOC code; or, to
find avenues other than H-2A to address particular duties that are not
regularly required, such as driving a semi tractor-trailer truck to
market when crops are harvested. In any event, the Department has
determined that requiring the payment of the highest applicable AEWR is
necessary to protect against adverse effect, as discussed above.\89\
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\89\ See also 86 FR 68174, 68183 (Dec. 1, 2021) (``The
Department best protects against adverse effect by setting the AEWR
applicable to the job opportunity at the highest of the applicable
AEWRs.'').
---------------------------------------------------------------------------
In lieu of requiring an employer to pay workers the highest of the
AEWR determinations applicable to the SOC codes assigned to the
employer's H-2A job opportunity, some commenters suggested the
Department require the employer to compensate workers on a per-hour
basis at the AEWR determination applicable to the particular duties
performed during that hour. However, two commenters, who may have
misunderstood the Department's proposal to use a single AEWR
determination applicable to the job opportunity, regardless of when a
worker would perform particular duties within the employment period,
expressed concern regarding burdens associated with tracking duties,
time, and pay rates, even under the Department's proposed methodology,
which would not require extensive recordkeeping. The Department
declines to adopt the commenters' suggestion to apply an applicable
AEWR on a per-hour basis, which would increase complexity and confusion
regarding pay obligations for both employers and workers.
SOC Code Assessment
Commenters expressed various concerns regarding the SWA's and CO's
assessments of H-2A job opportunities and assignment of SOC code(s),
which commenters understood could impact the AEWR applicable to an
employer's job opportunity and, therefore, the employer's wage
obligations under 20 CFR 655.120(a), 655.120(b)(3), 655.120(c)(3), and
655.122(l). Several commenters stated that the Department had not
adequately explained how the SOC code assessment and related AEWR
determination process would function. Two trade associations expressed
concern about the potential for the SWA and CO to assess an H-2A job
opportunity differently, resulting in conflicting SOC code assignments,
including the assessment of whether a job opportunity involves duties
covering multiple SOC codes. An agent expressed concern about the
potential for misclassification of job opportunities under an
inappropriate SOC code. A law firm expressed concern about the
potential for inconsistencies in SOC code assignments (e.g., between
SWAs), the potential for increased use of general SOC codes, and the
absence of a detailed administrative process, like the process used for
prevailing wage determination requests in the H-2B program that
includes requests for information, appeals, and requests for
reconsideration. Similarly, trade associations asked for clarification
regarding how an employer would challenge or appeal SOC code decisions.
The Department reiterates that the evaluation of tasks associated
with an employer's job opportunity and SOC code assignment is not new
in the H-2A program and declines to introduce a new, separate
administrative process. Due to the time-sensitive nature of receiving
and processing H-2A applications under the statute, the SWA will
continue to evaluate an employer's job opportunity in the first
instance--and determine the appropriate SOC code(s) for the job
opportunity--when it reviews an employer's job order for compliance
with 20 CFR part 653, subpart F, and 20 CFR part 655, subpart B. The
SWA will continue to enter the SOC code assigned to the employer's job
opportunity on the Form ETA-790, Agricultural Clearance Order. After
the employer files its H-2A Application for Temporary Employment
Certification, the OFLC CO will continue to perform a secondary
evaluation of the employer's application and job order, including SOC
coding. As is currently the case, the CO may determine whether a
different SOC coding is necessary, for example, based on additional
information received during processing.
In making a determination of the applicable SOC code(s), the CO
will continue to compare the duties and requirements of the employer's
job opportunity with SOC definitions, skill requirements, and tasks
that are listed in O*NET. Where similar tasks appear in more than one
SOC code (i.e., overlapping tasks), such as transporting workers or
agricultural commodities or maintaining and repairing farm equipment,
the CO will continue to consider other factual information presented in
the employer's application and job order (e.g., special skill or
license requirements) that provide context for determining which SOC
code or codes best represent the employer's job opportunity.
Even where the CO evaluates the totality of circumstances presented
in
[[Page 12780]]
the employer's job order and H-2A application and determines that more
than one SOC code must be assigned to appropriately reflect the job
offered, the job opportunity may or may not be subject to paragraph
(b)(5). For example, an H-2A job opportunity that requires a worker to
hand harvest field crops and operate light trucks to drive themselves
along with other farmworkers from place to place around the farm
property during the course of performing hand-harvest work, may be
assigned SOC code 45-2091 (Agricultural Equipment Operators), which
encompasses driving ``trucks to haul . . . farm workers,'' \90\ in
addition to SOC code 45-2092 (Farmworkers and Laborers, Crop, Nursery,
and Greenhouse). As both SOC codes 45-2091 and 45-2092 are subject to
the same AEWR determination (i.e., the AEWR determination under
paragraph (b)(1)(i)), this H-2A job opportunity is subject to a single
AEWR determination, and paragraph (b)(5) would not apply. In contrast,
an H-2A job opportunity that requires a worker to perform hand-harvest
work and to pick-up farmworkers, according to a regular schedule, from
employer-provided housing or a centralized pick-up point, in a van used
only for passenger transport, on public roads (e.g., from a motel to
the farm), and drive them to the place(s) of employment to perform
hand-harvest work, may be assigned SOC code 53-3053 (Shuttle Drivers
and Chauffeurs), in addition to SOC code 45-2092 (Farmworkers and
Laborers, Crop, Nursery, and Greenhouse). SOC codes 53-3053 and 45-2092
are subject to different AEWR determinations; SOC code 53-3053 is
subject to the AEWR determination under paragraph (b)(1)(ii), while SOC
code 45-2092 is subject to the AEWR determination under paragraph
(b)(1)(i). Therefore, paragraph (b)(5) applies when determining the
employer's H-2A wage obligation, and the higher of the two AWERs (i.e.,
the AEWR applicable to SOC code 53-3053 and the AEWR applicable to SOC
code 45-2092) is the single AEWR for evaluating the employer's wage
obligations for all of the work performed for this job opportunity.
Similarly, for an H-2A job opportunity that requires a worker to
perform hand-harvest work and help the farm supervisor direct or
monitor the work of other workers engaged in planting and harvesting
activities in the field, the CO may assign only SOC code 45-2092
(Farmworkers and Laborers, Crop, Nursery, and Greenhouse), as that SOC
code encompasses ``direct[ing] and monitor[ing] the work of other
seasonal help during . . . harvesting.'' However, if the duties
identified in the job order include tasks such as training workers,
monitoring compliance with safety regulations, or scheduling work
crews, which are not encompassed in SOC code 45-2092, then the CO may
also assign SOC code 45-1011 (First-Line Supervisors of Farm Workers)
to the H-2A job opportunity. As SOC code 45-1011 is subject to the AEWR
determination under paragraph (b)(1)(ii), while SOC code 45-2092 is
subject to the AEWR determination under paragraph (b)(1)(i), paragraph
(b)(5) applies when determining the employer's H-2A wage obligation,
and the higher of the two AEWRs (i.e., the AEWR applicable to SOC code
45-1011 and the AEWR applicable to SOC code 45-2092). If the AEWR
applicable to SOC code 45-1011 is higher than the AEWR applicable to
SOC code 45-2092, then the AEWR applicable to SOC code 45-4011 is the
single AEWR for evaluating the employer's wage obligations for all of
the work performed for this job opportunity, unless a subsequent
adjustment to either of the applicable AEWRs changes which of the two
AEWRs is highest. Similar to the highest of the wage sources governing
an employer's wage obligations under 20 CFR 655.120(a), the highest of
the applicable AEWRs governs which rate is ``the AEWR'' for evaluating
an employer's wage obligations under 20 CFR 655.120(b)(3),
655.120(c)(3), and 655.122(l).
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\90\ The tasks listed in O*NET are derived from surveys of
workers, who may use terms like ``trucks'' to refer to a variety of
vehicles (e.g., vans or sports utility vehicles (SUV)).
---------------------------------------------------------------------------
For job opportunities involving driving duties, as explained in the
NPRM, the CO will continue to look at factors such as the type of
equipment involved (e.g., pickup trucks, custom combine machinery, or
semi tractor-trailer trucks; makes and models of machines to be used),
the location where the work will be performed (e.g., on a farm or off),
and any qualifications and requirements for the job opportunity in
order to determine the appropriate SOC code to assign to the employer's
job opportunity. Similarly, for job opportunities that involve driving
farmworkers from place to place around the farm property during the
course of performing hand-harvest work, the CO will consider factors
such as the type of vehicle (e.g., a farm truck or van or a hired van
or bus, such as a Calvans vehicle), the location where the farmworker
transport will be performed (e.g., around the farm, including on
private roads, or on public roads), and any qualifications and
requirements for the transport (e.g., type of driver's licensure, gross
vehicle weight, vehicle maintenance responsibilities, paperwork
requirements) to determine the appropriate SOC code to assign to the
employer's job opportunity. Because each employer's need for labor or
services is unique to its operational needs, the CO must evaluate each
H-2A job opportunity on a case-by-case basis, considering the totality
of the information in an H-2A application and job order, to determine
the appropriate SOC code(s).
As in current practice, if the CO determines that the employer's
wage offer is less than the wage rate that must be offered to satisfy
H-2A program requirements (e.g., the wage offer is less than the
highest of the wage sources listed in 20 CFR 655.120(a), including the
AEWR determination applicable to the H-2A job opportunity), the CO will
issue a Notice of Deficiency alerting the employer to the issue and
providing an opportunity for the employer to amend its wage offer. If
the employer chooses not to amend its wage offer, the CO will deny the
application for failure to satisfy criteria for certification, and the
employer may appeal the final determination. If the SOC code assigned
to the H-2A job opportunity is material to the CO's final
determination, the employer may contest the SOC code assessment on
appeal.
Many commenters expressed concern that the SWA and CO would assign
multiple SOC codes, even though all of the duties may be encompassed
within a single SOC code, because those duties appeared in multiple
SOCs as overlapping tasks. The Department recognizes that its statement
in the NPRM that multiple SOC codes would be assigned if duties ``can
be classified in multiple SOCs'' could have been misinterpreted as
allowing or encouraging the SWA or CO to search for and assign as many
SOC codes as may be relevant to any of the duties, qualifications, or
requirements included in the employer's job opportunity
description.\91\ This was not the Department's intent. Rather, the
Department's intent was more clearly expressed where the Department
explained in the NPRM that ``[g]enerally, a job opportunity corresponds
with a single SOC code if all of the duties fall within a single
occupation and the qualifications, requirements, and other factors are
consistent with that occupation'' and the CO will assign more than one
SOC code only if the job opportunity ``cannot be classified within a
single SOC.'' As
[[Page 12781]]
demonstrated in examples provided in this section, multiple SOC codes
will be assigned in situations where the employer's job opportunity
includes duties that are not found within a single SOC code and,
therefore, multiple SOC codes must be assigned in order to reflect all
of the duties within the SOC system.
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\91\ See 86 FR 68174, 68183 (Dec. 1, 2021).
---------------------------------------------------------------------------
After reviewing comments received and scenarios raised in requests
for clarification or expressing concern that employers will experience
disruption in the assignment of the applicable AEWR to their job
opportunities, the Department believes that the vast majority of job
opportunities will continue to be covered by the six field and
livestock workers (combined) SOC codes. Those codes are quite broad,
both individually and as a grouping, and any H-2A job opportunity
classified as any one or more SOC codes within this group of six SOC
codes will not be impacted by this final rule, as only one AEWR
determination will apply. For example, absent additional job details
that might indicate otherwise, an H-2A job opportunity that requires a
worker to care for livestock, including driving a truck loaded with
supplemental feed to the locations where livestock are grazing and
repairing fences, would be assigned only SOC code 45-2093 (Farmworkers,
Farm, Ranch, and Aquacultural Animals), as the list of tasks for this
SOC code in O*NET includes duties driving trucks to distribute feed and
repairing fences and other enclosures. Likewise, an H-2A job
opportunity that requires a worker to manually harvest crops in a field
or orchard, perform other crop cultivation duties, and move the truck
that holds the harvested crop from one place in the field or orchard to
another and to storage or a pick-up point on the farm would be assigned
only SOC code 45-2092 (Farmworkers and Laborers, Crop, Nursery, and
Greenhouse), as the list of tasks for this SOC code in O*NET includes
duties driving trucks loaded with agricultural products on the farm.
If, in the second example, the ``truck'' was a heavy or more
specialized piece of agricultural equipment than the basic example
suggests (e.g., a harvesting machine that gathers and holds the crop
during harvest), SOC code 45-2091 (Agricultural Equipment Operators)
would be assigned in addition to SOC code 45-2092, because operating
heavy agricultural machinery is not covered in SOC code 45-2092, but it
is covered in SOC code 45-2091, while manual harvesting is covered in
SOC code 45-2092, but is not covered in SOC code 45-2091. However,
based on the description of the location, type of equipment involved,
and purpose of the truck driving in this example (i.e., driving trucks
loaded with harvested crops from one location to another on the farm),
neither SOC code 53-3033 (Light Truck Drivers) nor SOC code 53-3032
(Heavy and Tractor-Trailer Truck Drivers) would be assigned to the job
opportunity. Therefore, even if the SWA and CO assign a combination of
SOC codes--45-2091 and 45-2092--paragraph (b)(5) would not impact the
AEWR determination applicable to the employer's job opportunity, as
both SOC codes are subject to the same AEWR determination under
paragraph (b)(1)(i).
In addition, the Department reminds employers that H-2A job
opportunities must include only qualifications and requirements that
are bona fide and consistent with non-H-2A job opportunities in the
same or comparable occupations and crops.\92\ This also applies to H-2A
job orders that include duties that fall under a combination of SOC
codes. For example, an H-2A job order seeking workers to perform hand-
harvest tasks, accounting tasks, and semi-truck driving tasks would
present an unusual combination of duties, spanning multiple SOC codes,
and either the CO or the SWA may require the employer to submit
documentation to substantiate the appropriateness of the combination of
duties specified in the job offer.
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\92\ See 20 CFR 655.122(b).
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Some commenters objected to the SWA and CO's consideration of all
duties listed in an employer's H-2A job opportunity description when
assessing SOC code assignment. Most of these commenters urged the
Department to adopt some form of a primary or majority duties test or
otherwise disregard duties an employer characterizes as minor,
infrequent, or intermittent. A trade association asserted that using a
``primary duties'' test would reduce the risk of inconsistent SOC code
assignments between the SWA and CO and simplify employer filings by not
requiring separate applications for each SOC code.
Trade organizations, a government agency, and an employer offered
various approaches for identifying duties that should be included or
excluded from consideration during SOC code assessment. Among
commenters suggesting the SOC code should be based on the principal or
most important duty the worker performs, some suggested the Department
only consider duties performed 51, 80, or 90 percent of the time, or
that an SOC code should apply only if workers perform mostly the same
duties as in the SOC code description. Other suggestions included
disregarding any duty performed as less than 10 percent of a worker's
day-to-day activities; a duty performed for 1 hour during an 8-hour
workday; any duty performed less than 20 percent of the time, although
without specifying whether ``time'' meant per day, per work week, or
throughout the entire employment period; ``minor truck driving,''
without specifying the meaning of ``minor''; and construction labor
performed intermittently during the employment period, without
specifying the meaning of ``intermittently.'' Some employers and trade
associations recommended that the Department require the employer to
identify the percentage of time per duty on their H-2A application and
attest that if the percentage changes for any of the workers such that
a different duty becomes the primary duty, the employer will notify the
Department and the SWA of the change and request an updated wage for
that worker.
The Department declines to adopt commenters' suggestions. For one,
the Department is concerned with how such suggestions would work in
practice. Rather than resulting in more appropriate and consistent AEWR
determinations, assigning an SOC code based on the ``primary duties''
or the percentage of time identified for each duty in an employer's job
opportunity description could permit or encourage employers to combine
work from various SOC codes, interspersing higher-skilled, higher-
paying work among many workers so that the higher-paying work is never
a duty performed by any one employee more than the specified
percentage. Such an approach would undermine the Department's goals of
providing predictability, consistency, and administrative efficiency in
AEWR determinations, and of preventing inaccurate SOC code assignment.
In addition, such an approach to assigning SOC codes could permit an
employer to gain the benefit of work in a higher paid SOC code, while
paying less than the AEWR applicable to that work. Ultimately, a
``primary duties''-type approach runs a risk of adversely affecting the
wages of workers in the United States who are employed in the higher
paid SOC code. In addition, implementing the ``percentage per duty''
disclosure requirement would increase administrative burden for
employers (e.g., substantial recordkeeping to ensure that the actual
work each worker performed aligns with the percentages
[[Page 12782]]
disclosed), and potentially restrict fluid movement of workers among
all the duties the employer requires in the job opportunity, which was
a concern many commenters expressed. The Department believes that the
CO's review of the totality of each H-2A job opportunity, as discussed
above, addresses commenters' concerns regarding consistency and
accuracy of SOC code assignment, without increasing administrative
burden, complexity, or risk of inadequate AEWRs.
Similarly Employed by SOC Code, not Industry
Some commenters asserted that truck driving, mechanic, and
construction duties performed in agriculture are categorically
different than truck driving, mechanic, and construction duties
performed in other industries and should not be classified using SOC
codes outside the field and livestock workers (combined) occupational
group, subject to the AEWR determinations based on OEWS, and
potentially resulting in H-2A job opportunities assigned multiple SOC
codes and subject to paragraph (b)(5). Commenters asserted that the
truck driving conditions involved in H-2A applications are distinct
from those that are classified as SOC code 53-3033 (Light Truck
Drivers) or SOC code 53-3032 (Heavy and Tractor-Trailer Truck Drivers),
or that the nature of the commodity being hauled (e.g., a harvested
crop, rather than a nonagricultural commodity) should be dispositive in
the SOC code assignment of an H-2A job opportunity involving truck
driving. These commenters stated that farmers may require a worker to
drive only short distances and only through rural areas (e.g., between
the farm and a nearby packing house), never hundreds of miles at a
time, navigating urban areas, or delivering industrial goods. In
addition, commenters asserted that SOC code 45-2091 alone should apply
to drivers who haul a farmer's crop or commodity from the field,
including drivers of semi-trucks hauling the crop or commodity off the
farm and ``regardless of whether the driver is operating the semi-truck
with a Class A CDL license or operating the semi-truck with a Standard
Driver's License under the Farm-Related CDL Exemption.''
The Department acknowledges that some H-2A job opportunities
involving truck driving would not appropriately be classified as SOC
code 53-3033 (Light Truck Drivers) or SOC code 53-3032 (Heavy and
Tractor-Trailer Truck Drivers) based on the equipment, vehicle weight,
location, and other factors involved, as discussed above. However, the
Department disagrees that SOC code 45-2091 (Agricultural Equipment
Operators) is the only SOC code appropriate for truck-driving duties
listed on an H-2A application. As discussed in the NPRM, an H-2A job
opportunity requiring a worker to operate semi-trucks with at least
26,001 pounds Gross Vehicle Weight (GVW), whether a commercial driver's
license is required or not, over public roads (e.g., hauling the crops
away from the farm to market, to a packing facility, or to storage)
would likely result in the CO assigning SOC code 53-3032 (Heavy and
Tractor-Trailer Truck Drivers). Thus, the Department views operating
semi-trucks hauling commodities over public roads to generally involve
the same or similar skills, qualifications, and tasks, whether the
commodity is agricultural or nonagricultural in nature.
One commenter who addressed construction labor asserted that SOC
code 47-2061 involves tasks that are too highly skilled to apply to
construction on farms. The Department respectfully disagrees. The
Department receives H-2A applications involving skilled construction
labor or services, some requiring licensure, particularly where a
grower contracts with an H-2ALC for a project requiring construction
labor. For example, the Department receives H-2A applications for
livestock confinement or grain bin elevator construction on farms that
require workers to perform duties such as reading and following plans
and measurements; aligning and sealing structural components (e.g.,
walls and pipes), sometimes by welding; building frameworks (e.g.,
walls, roofs, joists, studding, and window and door frames); installing
metal siding, windows, ceiling tiles, and insulation; and pouring
concrete. These construction duties are consistent with SOC code 47-
2061, not with SOC code 45-2093. In addition, the location of the
work--on a farm or off a farm--or type of structure to be constructed--
a livestock confinement building or a retail building--does not alter
the essential duties or skills required of the worker. Where an H-2A
job opportunity's tasks, qualifications, and requirements indicate
skilled construction work will be performed, then SOC code 47-2061
(Construction Laborers) may be assigned, or potentially a different SOC
code if the construction work is even more specialized (e.g., 47-2051
(Cement Masons and Concrete Finishers)).
Two trade associations and an employer asserted that on-farm
mechanics perform very limited mechanic work that is very different
from the duties mechanics outside the agricultural industry perform.
One stated that on-farm mechanics perform routine maintenance on a
farm's equipment to keep it operational, ``not reprogramming computer-
based trucks or rebuilding engines.'' The Department acknowledges that
some on-farm mechanics may perform only the type of routine maintenance
consistent with SOC code 45-2091's (Agricultural Equipment Operators)
listed tasks of ``[o]perate or tend equipment used in agricultural
production, such as tractors, combines, and irrigation equipment'' or
``[a]djust, repair, and service farm machinery and notify supervisors
when machinery malfunctions.'' \93\ However, the Department receives H-
2A applications for mechanics that include duties such as the
following: diagnose, repair, and overhaul engines, transmissions,
components, electrical and fuel systems, etc. on tractors, irrigation
systems, generators and/or other farm equipment; make major mechanical
adjustments and repairs on farm machinery; repair defective parts using
welding equipment, grinders, or saws; repair defective engines or
engine components; replace motors; fabricate parts, components, or new
metal parts using drill presses, engine lathes, welding torches, and
other machine tools (grinders or grinding torches); test and replace
electrical circuits, components, wiring, and mechanical equipment using
test meters, soldering equipment, and hand tools; read inspection
reports, work orders, or descriptions of problems to determine repairs
or modifications needed; and maintain service and repair records.
Duties of this type and scale are encompassed within 49-3041 (Farm
Equipment Mechanics and Service Technicians), and not within the
routine general maintenance or repair tasks associated with SOC code
45-2091. The Department notes that if, in addition to duties on the
list above, an H-2A job opportunity included diagnosing, repairing, and
overhauling engines, transmissions, components, electrical and fuel
systems, etc. on cars, the H-2A job opportunity would be a combination
of occupations: 49-3041 (Farm Equipment Mechanics and Service
Technicians) and 49-3023 (Automotive Service Technicians and
Mechanics), which encompasses duties that include diagnosing,
adjusting, repairing, or overhauling automotive vehicles. Similarly, if
the H-2A job opportunity included diagnosing, repairing, and
overhauling engines, transmissions, components, electrical and fuel
systems,
[[Page 12783]]
etc. on trucks (including diesel trucks) or busses, the H-2A job
opportunity would be a combination of SOC codes: 49-3041 (Farm
Equipment Mechanics and Service Technicians) and 49-3031 (Bus and Truck
Mechanics and Diesel Engine Specialists), which encompasses duties that
include diagnosing, adjusting, repairing, or overhauling trucks and
busses; or maintaining and repairing any type of diesel engines.
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\93\ https://www.onetonline.org/link/summary/45-2091.00 (last
accessed August 5, 2022).
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Corresponding Employment
Trade associations asked the Department to clarify how the AEWR
determined under the proposed methodology would interact with the
definition of ``corresponding employment'' at 20 CFR 655.103(b).
Specifically, these commenters asked the Department to clarify whether
where the H-2A job opportunity involves duties that span multiple SOC
codes, non-H-2A workers who only perform the duties associated with one
SOC code included in the job opportunity would be in ``corresponding
employment'' with H-2A workers who perform any of the same duties as
well as the duties associated with another SOC code.\94\ As explained
in Overdevest Nurseries LP v. Walsh, 2 F.4th 977 (D.C. Cir. 2021), a
non-H-2A worker is in ``corresponding employment'' with an H-2A worker
if the non-H-2A worker performs any duties included in the H-2A job
order, or any other agricultural work performed by the H-2A worker(s),
regardless of whether the non-H-2A worker performs all of the duties
listed in the job order. Agreeing with the Secretary's reasoning behind
the corresponding employment regulation, the D.C. Circuit explained
that this requirement ``advances the statute's purpose . . . by
requiring employers to pay non-H-2A workers the same amount that they
pay the H-2A workers when they are doing the same work.'' Id. At 984
(internal citations omitted). The Court concluded that this is an
``eminently reasonable interpretation'' of the statute's mandate to
prevent ``adverse effect'' on workers in the United States ``similarly
employed.'' Id. Applying the AEWR methodology adopted in this final
rule, a non-H-2A worker is engaged in corresponding employment when the
worker performs any of the duties listed in the H-2A job order,
regardless of whether the worker performs or does not perform all of
the duties listed in the job order. The worker in corresponding
employment must be paid at least the applicable H-2A wage rate for all
time so spent. For example, consider an employer whose H-2A job
opportunity includes hand-harvesting and driving a semi-truck to haul
the harvested crop to delivery points away from the farm. Assuming the
AEWR determination for SOC code 53-3032 (Heavy and Tractor-Trailer
Truck Drivers) is higher than the AEWR determination for SOC code 45-
2092 (Farmworkers and Laborers, Crop, Nursery, and Greenhouse Workers)
and all other potential wage sources (e.g., any applicable State
minimum wage), the employer must offer and pay all of its workers
employed in the H-2A job opportunity the higher AEWR amount for all
hours worked, i.e., for hours spent performing the hand-harvesting
duties and for hours spent performing the truck-driving duties. The
employer also employs non-H-2A workers to perform only hand-harvesting
work. These workers would be in ``corresponding employment'' when
performing the hand-harvesting duties described in the job order,
regardless of whether such workers do or do not also perform the truck-
driving duties, and must receive the same pay as the H-2A workers
receive for performing that same work. Accordingly, the employer must
pay these workers in corresponding employment at least the H-2A wage
rate (in this example, the AEWR determination for SOC code 53-3032) for
time spent engaged in such corresponding employment. As discussed
above, the Department anticipates that most H-2A job opportunities will
fall within one or more of the SOC codes encompassed within the six
field and livestock workers (combined) SOC codes, and, therefore, wage
complexities related to ``corresponding employment'' are unlikely to
occur.
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\94\ See 20 CFR 655.103(b) (The employment of workers who are
not H-2A workers by an employer who has an approved Application for
Temporary Employment Certification in any work included in the job
order, or in any agricultural work performed by the H-2A workers. To
qualify as corresponding employment, the work must be performed
during the validity period of the job order, including any approved
extension thereof.'')
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Importance of Appropriate SOC Code Assignment
As explained in the NPRM, determining the appropriate SOC code is
an important component of the Department's decision to move to SOC-
specific wages. The H-2A program is not limited to job opportunities
classifiable within the six field and livestock workers (combined) SOC
codes. Based on the statutory and regulatory framework governing the
definition of what constitutes agricultural labor or services, the
Department's experience is that a wide range of jobs within the U.S.
agricultural economy, depending on the nature and location of work
performed, could be eligible under the H-2A visa classification. Though
the vast majority of job opportunities will be classifiable within a
relatively small number of SOC codes, the Department has issued H-2A
certifications to employers covering jobs classified in dozens of SOC
codes, including approximately three dozen in fiscal year 2021 alone.
Use of the highest applicable wage in these cases reduces the potential
for employers to offer and pay workers a wage rate that, while
appropriate for the general duties to be performed, is not appropriate
for other, more specialized duties the employer requires. In addition,
use of the highest applicable wage imposes a lower recordkeeping burden
than if the Department permitted employers to pay different AEWRs for
job duties falling within different SOC codes on a single Application
for Temporary Employment Certification. This policy is also consistent
with the way the Department determines prevailing wage rates for jobs
that cover multiple SOC codes in other employment-based visa programs.
Under this final rule, if the job duties on the H-2A application
(including the job order) constitute a combination of SOC codes that do
not all fall within the field and livestock worker (combined)
occupational grouping, the Department will determine the applicable
AEWR based on the highest AEWR among the SOCs assigned to the job
opportunity. In the event an employer's job opportunity requires the
performance of duties that are not encompassed in a single SOC code's
description and tasks and the SOC codes that must be assigned to cover
the entirety of the employer's job opportunity are subject to different
AEWRs (e.g., a field and livestock worker (combined) SOC code and an
SOC code not encompassed in the field and livestock worker (combined)
occupational group, or two SOC codes neither of which are encompassed
in the field and livestock worker (combined) occupational group), the
AEWR for the job opportunity is the highest AEWR for all applicable SOC
codes to reduce the potential for inaccurate SOC code assignment and
AEWR determination and effectuate the purpose of the AEWR (i.e.,
protect against adverse effect on the wages of workers in the United
States similarly employed).
The Department has considered all the comments it received and has
decided to adopt the language of the NPRM as proposed. Under this final
rule, if the job duties on the job order are not encompassed within a
single SOC code, the CO will determine the applicable AEWR based on the
highest
[[Page 12784]]
AEWR for all applicable SOC codes, as provided in paragraph (b)(5).
D. Out-of-Scope Comments on the Proposed Rule
The Department received comments on several issues that were
unrelated to its proposal to revise the methodology it uses to
determine the AEWR for non-range job opportunities in the H-2A program.
Some comments requested regulatory action beyond the proposed changes
that the Department presented for public comment in the NPRM or
discussed potential Congressional action (e.g., immigration reform).
Some commenters noted general farm worker labor shortages and commented
on the current administration's policies (e.g., programs to address the
trucking shortage) that the commenters asserted are exacerbating the
shortage. A workers' rights advocacy organization noted the historical
and current exclusion of agricultural workers from laws that protect
workers in the United States (e.g., National Labor Relations Act).
Comments about policies or laws outside the parameters of the H-2A
program are all out of scope. Other comments addressed topics unrelated
to the H-2A program, such as requests for employment, matters at a U.S.
Consulate, or related to COVID-19, all of which are beyond the scope of
this rulemaking. Many commenters suggested that the Department abandon
the AEWR altogether as a means of preventing the employment of H-2A
workers from adversely affecting the domestic workforce. These comments
were not within the scope of this rulemaking, which the NPRM expressly
limited to revising the methodology for calculating the AEWR. 86 FR at
68185 (``[t]he Department is not considering eliminating the AEWR or
changing the AEWR's role in determinations of an employer's required
minimum wage rate in the H-2A program . . . .'') For example, some
commenters objected to the Department's continued use of the AEWR as
one of the primary means of preventing adverse effects of H-2Arkers on
the domestic workforce, with some commenters characterizing the
underlying assumptions of the AEWR (e.g., regarding the existence of
workers in the United States similarly employed who require protection)
as outdated. These commenters noted the growth of the H-2A program and
paucity of SWA referrals and a limited number of hires from those few
referrals as an indicator of the lack of domestic labor. Some
commenters asked the Department to hold hearings on whether to continue
using the AEWR concept. Some asserted that the Department misuses the
AEWR as a preventative measure and should instead use the AEWR only
after a factual finding of adverse effect in particular areas or
occupations. Others stated the Department should examine current
dynamics in the labor market (e.g., particular labor shortages), hold
public hearings to ``examine the underlying tenants [sic] of the
Department's mandate and test solutions'' obtained through testimony
presenting agricultural industry realities, or otherwise engage in
further evaluation of adverse effect with focus on the employers'
perspective. One commenter stated the Department should, in
consultation with USDA, assess the impact of the continued use of AEWR
on the global competitive position of farmers in the United States and
on U.S. workers, due to offshoring or innovations to reduce employers'
dependence on labor (e.g., mechanization and automation). The continued
use of the AEWR was not the subject of this rulemaking, so these
comments are out of scope.
Other comments outside the scope of this rulemaking addressed
program issues unrelated to the methodology for setting the AEWR for
non-range job opportunities, such as regulation of farm labor
contractors, U.S. worker recruitment, employment eligibility of
applicants referred for employment, prevailing wage survey methodology,
the AEWR methodology for range occupations, logging, the definition of
agricultural labor or services, and the length of H-2A certifications.
For example, some commenters expressed concern about employers refusing
to offer wages higher than the AEWR during recruitment of prospective
workers. One of these commenters expressed concern about the failure of
wage sources other than the AEWR to protect U.S. workers' wages. The
commenter asserted that a Federal minimum wage rate that is lower than
the AEWR and the absence of prevailing wage survey findings, collective
bargaining agreements, and State minimum wage rates applicable to H-2A
job opportunities undermine workers' efforts to demand higher wages.
Two other commenters urged the Department to require that employers
``reasonably negotiate'' wages with applicants--both prospective H-2A
workers and U.S. applicants--and to reconsider whether U.S. workers who
demand wages above an employer's offer are considered ``available''
within the meaning of 8 U.S.C. 1188(a)(1)(A) for purposes of reducing
the number of H-2A workers potentially certified. To the extent these
comments object to the use or role of the AEWR in the H-2A program
overall or suggest concerns with aspects of the H-2A program beyond the
AEWR methodology (e.g., recruitment and consideration of U.S.
applicants; prevailing wage surveys), these comments address issues
beyond the scope of this rulemaking, which is limited to proposed
changes to the methodology the Department uses to determine the AEWR
for non-range job opportunities in the H-2A program. However, as
explained above and below, the Department continues to believe that the
AEWR, functioning as a wage floor, is a critical measure to protect
against adverse effect on the wages of agricultural workers in the
United States, a particularly vulnerable workforce, and that the
improvements made in this final rule to the AEWR methodology will serve
to better protect against such adverse effect.
III. Administrative Information
A. Executive Order 12866: Regulatory Planning and Review; and Executive
Order 13563: Improving Regulation and Regulatory Review
Under Executive Order (E.O.) 12866, the Office of Management and
Budget (OMB)'s Office of Information and Regulatory Affairs (OIRA)
determines whether a regulatory action is significant and, therefore,
subject to the requirements of the E.O. and review by OMB. 58 FR 51735.
Section 3(f) of E.O. 12866 defines a ``significant regulatory action''
as an action that is likely to result in a rule that: (1) has an annual
effect on the economy of $100 million or more, or adversely affects in
a material way a sector of the economy, productivity, competition,
jobs, the environment, public health or safety, or State, local, or
tribal governments or communities (also referred to as economically
significant); (2) creates serious inconsistency or otherwise interferes
with an action taken or planned by another agency; (3) materially
alters the budgetary impacts of entitlement grants, user fees, or loan
programs, or the rights and obligations of recipients thereof; or (4)
raises novel legal or policy issues arising out of legal mandates, the
President's priorities, or the principles set forth in the E.O. Id.
OIRA reviewed this final rule and has determined that it is a
significant regulatory action under E.O. 12866, but not an economically
significant regulatory action within the scope of section 3(f)(1).
E.O. 13563 directs agencies to propose or adopt a regulation only
upon a reasoned determination that its benefits justify its costs; the
regulation is tailored
[[Page 12785]]
to impose the least burden on society, consistent with achieving the
regulatory objectives; and in choosing among alternative regulatory
approaches, the agency has selected those approaches that maximize net
benefits. E.O. 13563 recognizes that some benefits are difficult to
quantify and provides that, where appropriate and permitted by law,
agencies may consider and discuss qualitative values that are difficult
or impossible to quantify, including equity, human dignity, fairness,
and distributive impacts.
Public Comments
Multiple commenters stated the Department underestimated cost
increases for employers and suggested the rule should be economically
significant. The comments claimed this increased labor cost can put
pressure on farms and reduce their advantage in the global marketplace
and regional marketplaces, and potentially put them out of business.
The Department recognizes that there will be some cost increases to
some employers as described in the analysis of transfer payments
section. The analysis in this final rule estimates the impacts of the
rule based on actual wage records in Fiscal Year (FY) 2020 and FY 2021
to determine the most accurate impact of the revised AEWR structure in
the final rule. Of the 25,150 certifications between FY 2020 and FY
2021, only 732 (2.91 percent) have wage impacts and the average
certification would have an impact of $63,943 with an average per
worker wage impact of $5,117. Based on the Department's analysis, the
overall transfer payments imposed by the rule are less than $100
million and, therefore, not economically significant.
Multiple commenters asserted that the Department failed to use the
most recent data available and suggested the Department has not taken
into account the average 11 percent year-over-year increase in
applications since 2017, resulting in an inaccurate estimate of wage
impacts on farms affected by the AEWR. They also suggested that the
OEWS does not accurately reflect farmworker wages. The proposed rule
calculated wage impacts using the most recent data available at the
time of publishing which consisted of data through Quarter 3 of FY
2021. In addition, the proposed rule calculated assumptions used in the
analysis such as wage rates, growth rates, and impacted entities using
the most recent full year of data available, 2020. In this final rule,
the Department has updated the analysis to include the entirety of FY
2021 disclosure data to calculate wage impacts and updated data sources
and growth rate calculations to include 2021 data now that there is a
full year of disclosure data available. The growth rate calculations,
as discussed in the analysis below, account for the increasing number
of certifications that have occurred historically, resulting in an
estimate of increased wage impacts over time.
One commenter asked the Department to compare existing FLS wage
rates for field and livestock workers (combined) occupations with State
or national OEWS data when the FLS is not available to facilitate
evaluation of the impact of wages in the event the FLS were to become
unavailable beyond the geographical limits discussed in this rule
(e.g., Alaska). In this final rule, the Department is adding a
comparison of wage rates into the docket.
One commenter asserted the analysis in the proposed rule was
incomplete because it does not consider how many employers and workers
would be impacted by mid-season AEWR adjustments for OEWS updates that
will be effective on or about July 1 annually. The Department has
considered mid-season changes to wage rates from newly released OEWS
data. As discussed in the section on transfer payments, the Department
estimates wage impacts assuming that OEWS wages are released in June.
The Department reiterates that 98 percent of the job opportunities
subject to the AEWR methodology in this final rule will be subject to
FLS-based AEWRs only--and related AEWR adjustments, if the employment
period crosses the calendar year--and will not be impacted by OEWS
adjustments. In addition, for the small percentage of job opportunities
subject to an OEWS-based AEWR, wage adjustment would impact only those
with an employment period crossing July 1. The Department's estimates
of wage impacts due to OEWS-based adjustments during the employment
period accounts for a potential impact on this small percentage. The
Department's calculations of wage impacts assumes that worker wages
would remain constant if the mid-season OEWS shows a decline in wage
rates, while worker wages would increase if the mid-season OEWS release
shows an increase in wage rates.
Multiple commenters asserted that the Department underestimates the
impact of the revised AEWR structure because it does not consider
impacts on specialty crops, specific industries, or occupations.
Examples include nurseries and greenhouse farms, fruit and tree nut
farms, and vegetable and melon operations. The commenter suggested that
data used does not accurately represent these varying subsectors. The
Department understands that impacts on each industry will be different
depending on market dynamics, including local wage rates. The
Department has taken the approach of estimating wage impacts using
actual historical certification data that allows for detailed wage
impacts to be calculated for each certification based on the industry
and location of the certification.
Several commenters asserted that the Department underestimates the
impact of the revised AEWR structure because it does not consider
classifications of workers to new (higher wage) SOC codes as a result
of the requirement to pay the highest of applicable SOC code AEWRs. One
commenter asserted that all farm work overlaps and classifications
should not be based on intermittent activities and others assert that
workers should not receive higher wages if they only minimally perform
the higher classification.
The Department understands that we may have underestimated the
impact of the revised AEWR structure due to the final rule's new
requirement to pay the highest of applicable SOC code AEWRs. However,
the Department does not have any data readily available to estimate the
number of workers that may have their SOC codes reclassified as a
result of the final rule,\95\ and commenters did not provide such data
in their comments on the NPRM. In addition, the Department considers
the impact of this potential underestimation to be de minimis for the
reasons included in our discussion and clarification above regarding
SOC assignment and assignment of the highest AEWR applicable, namely,
that the Department anticipates low incidence of multiple SOCs
assigned, resulting in job opportunities subject to the highest of
multiple AEWRs.
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\95\ The group of potentially reclassified SOCs fall into two
groups: (1) jobs that were assigned an inappropriate SOC code; and
(2) combination of SOC-code jobs that were assigned the field and
livestock worker (combined) SOC. Commenters are correct that the
specific incidences are case-specific and require detailed analysis
to assign codes. To determine the number of potentially reclassified
certifications would require review of each case in the
certification dataset. As such, the number of workers who may have
their SOC codes reclassified because of this final rule is not
readily accessible to the Department.
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Many comments asserted that the equity analysis in the proposed
rule was insufficient and asserted that the Department was claiming
that the transfers from employers to H-2A workers is good for
diversity, equity, and inclusion. In addition, commenters
[[Page 12786]]
stated that the equity analysis does not consider impacts on
individuals in rural communities. The Department contends that the
distributional impact analysis section does not make any claims about
the positives or negatives of transfers from employers to H-2A workers.
The distributional impact analysis only shows the distribution of U.S.
workers within the SOC codes impacted by the H-2A program. E.O. 12866
does not require an analysis of impacts on rural communities or an
analysis in general of underserved communities, as that term is defined
by E.O. 13985, Advancing Racial Equity and Support for Underserved
Communities Through the Federal Government. However, the Department
expects that the wage impacts estimated in this regulatory impact
analysis (RIA) will predominantly occur in rural communities where
farms are located.
Multiple commenters asserted the Department does not consider
administrative costs including increased paperwork, filing fees to DOL
and U.S. Citizenship and Immigration Service (USCIS), attorney costs,
and costs to DOL to review increased applications. One of these
commenters suggested that the number of applications could increase by
three to four times. The Department does not have data to quantify
administrative costs. As discussed in the unquantifiable cost section
of the RIA below, the Department expects some administrative costs such
as payroll changes to be de minimis because employers already need to
update payrolls when AEWR wage rates are released annually. The
Department acknowledges that there may be other administrative costs,
but commenters did not provide specific data to quantify those costs.
Finally, one commenter asserted that the impacts of the proposed
rule would increase food inflation. The Department does not have data
to quantify impacts on food inflation from the estimated wage
transfers. However, the Department reiterates that the analysis shows
only 2.9 percent of certifications would have wage impacts under the
AEWR methodology in this final rule and, as discussed in the Regulatory
Flexibility Act of 1980 (RFA), the wage impacts are not significant for
98 percent of small employers. The Department does not expect this
final rule alone will cause a general increase in food prices because
there are many other factors such as an overall increase in the price
level and an increase in the transportation and material costs that
would have more substantive impacts on food prices.\96\
---------------------------------------------------------------------------
\96\ The Department does not have data to estimate the impact of
this rule on specific types of food. The Department believes that
the impact of the rule will most likely affect Puerto Rico and
Alaska, where no AEWRs currently exist because the FLS data does not
collect wage data covering those geographic areas.
---------------------------------------------------------------------------
Outline of the Analysis
Section III.A.1 describes the need for the final rule, and Section
III.A.2 describes the process used to estimate the costs of the rule
and the general inputs used, such as wages and number of affected
entities. Section III.A.3 explains how the provisions of the final rule
will result in quantifiable costs and transfers and presents the
calculations the Department used to estimate them. In addition, Section
III.A.3 describes the unquantified costs of the final rule, a
description of qualitative benefits, and presents an analysis of
distributional impacts of the rule. Section III.A.4 summarizes the
estimated first-year and 10-year total and annualized costs and
transfers of the final rule. Finally, Section III.A.5 describes the
regulatory alternatives that were considered during the development of
the final rule.
Summary of the Analysis
The Department estimates that the final rule will result in costs
and transfers. As shown in Exhibit 1, the final rule is expected to
have an annualized cost of $0.073 million and a total 10-year
quantifiable cost of $0.51 million at a discount rate of 7 percent.\97\
The final rule is estimated to result in annual transfers from H-2A
employers to H-2A employees of $38.22 million and total 10-year
transfers of $268.47 million at a discount rate of 7 percent.\98\
---------------------------------------------------------------------------
\97\ The final rule will have an annualized cost of $0.06
million and a total 10-year cost of $0.51 million at a discount rate
of 3 percent in 2021 dollars.
\98\ The final rule will have annualized transfer payments from
H-2A employers to H-2A employees of $37.83 million and a total 10-
year transfer payments of $322.73 million at a discount rate of 3
percent in 2021 dollars.
Exhibit 1--Estimated Monetized Costs and Transfers of the Final Rule
[2021 $millions]
------------------------------------------------------------------------
Costs Transfers
------------------------------------------------------------------------
Undiscounted 10-Year Total.............. $0.51 $375.07
10-Year Total with a Discount Rate of 3 0.51 322.73
percent................................
10-Year Total with a Discount Rate of 7 0.51 268.47
percent................................
10-Year Average......................... 0.05 37.51
Annualized at a Discount Rate of 3 0.06 37.83
percent................................
Annualized with at a Discount Rate of 7 0.07 38.22
percent................................
------------------------------------------------------------------------
The total cost of the final rule is associated with rule
familiarization. Transfers are the results of changes to the AEWR
methodology and, more specifically, in H-2A job opportunities where the
FLS does not adequately collect or consistently report wage data at a
State or regional level. See the costs and transfers subsections of
Section III.A.3 (Subject-by-Subject Analysis) for a detailed
explanation.
The Department was unable to quantify some costs and benefits of
the final rule and describes them qualitatively in Section III.A.3
(Subject-by-Subject Analysis).
1. Need for Regulation
As discussed above, court-issued injunctions prevented USDA from
suspending FLS data collection for CY 2020 and prevented the Department
from further implementing the 2020 AEWR Final Rule on December 23,
2020, resulting in a return to the 2010 Final Rule AEWR methodology.
Under
[[Page 12787]]
the 2010 Final Rule, FLS wage data is used to determine the AEWRs for
all H-2A non-range job opportunities. However, the Department remains
concerned that the use of a single AEWR for all non-range job
opportunities in the H-2A program may adversely affect the wages of
workers in the United States similarly employed in certain jobs where
the FLS does not adequately collect or consistently report wage data at
a State or regional level. Therefore, the Department will use the
bifurcated approach set forth in the 2020 AEWR Final Rule that set a
single AEWR based on the FLS for the vast majority of job opportunities
used by employers in the H-2A program--six SOC codes covering field
workers and livestock workers--while shifting AEWR determinations to
the OEWS survey for all other SOC codes for which the FLS does not
adequately collect or consistently report wage data at a State or
regional level (e.g., tractor-trailer truck drivers, farm supervisors
and managers, construction workers, logging workers, and many
occupations in contract employment). As AEWR determinations become more
SOC-specific, the Department believes it is appropriate to continue
requiring that employers pay the highest applicable wage if the job
opportunity cannot be classified within a single SOC code to reduce the
potential for employers to misclassify workers, guard against adverse
effect on the wages of similarly employed workers in the United States
who are engaged in work encompassed in the higher-paid SOC code.
The Department has also determined that two major aspects of the
2020 AEWR Final Rule are inconsistent with the Department's statutory
mandate to protect the wages of workers in the United States similarly
employed against adverse effect: (1) the imposition of a 2-year wage
freeze for field and livestock workers at a wage level based on the FLS
published in November 2019, and (2) using the BLS ECI solely to adjust
AEWRs annually thereafter. Accordingly, the Department has determined
these policies must be reconsidered and will implement revisions in
this final rule that better meet the statute's twin goals to ensure
that employers can access legal agricultural labor while maintaining
strong wage protection for workers in the United States similarly
employed.
2. Analysis Considerations
The Department estimated the costs and transfers of the final rule
relative to the existing baseline (i.e., the current practices for
complying, at a minimum, with the H-2A program as currently codified at
20 CFR part 655, subpart B). This existing baseline is consistent with
the 2010 Final Rule because the 2020 AEWR Final Rule was preliminarily
enjoined and subsequently vacated by a Federal district court, as
explained above.
In accordance with the regulatory analysis guidance articulated in
OMB's Circular A-4 and consistent with the Department's practices in
previous rulemakings, this regulatory analysis focuses on the likely
consequences of the final rule (i.e., costs and transfers that accrue
to entities affected). The analysis covers 10 years (from 2023 through
2032) to ensure it captures major costs and transfers that accrue over
time. The Department expresses all quantifiable impacts in 2021 dollars
and uses discount rates of 3 and 7 percent, pursuant to Circular A-4.
Exhibit 2 presents the number of affected entities that are
expected to be impacted by the final rule. The average number of
affected entities is calculated using OFLC temporary agricultural labor
certification data from 2017 through 2021. The Department provides this
estimate and uses it to estimate the costs of the final rule.
Exhibit 2--Number of Affected Entities by Type
[CY 2017-2021 average]
------------------------------------------------------------------------
Entity type Number
------------------------------------------------------------------------
Annual Unique H-2A Applicants........................... 8,856
------------------------------------------------------------------------
Growth Rate
The Department's estimated growth rates for applications processed
and certified H-2A workers based on FYs 2012 to 2021 H-2A program data,
is presented in Exhibit 3.
Exhibit 3--Historical H-2A Program Data
------------------------------------------------------------------------
Fiscal year Applications certified Workers certified
------------------------------------------------------------------------
2012 5,278 85,248
2013 5,706 98,814
2014 6,476 116,689
2015 7,194 139,725
2016 8,297 165,741
2017 9,797 199,924
2018 11,319 242,853
2019 12,626 258,446
2020 13,552 275,430
2021 15,619 317,619
------------------------------------------------------------------------
The geometric growth rate for certified H-2A workers using the
program data in Exhibit 3 is calculated as 17.9 percent. This growth
rate, applied to the analysis timeframe of 2023 to 2032, would result
in more H-2A certified workers than projected employment of workers in
the relevant H-2A SOC codes by BLS.\99\ Therefore, to estimate
realistic growth rates for the analysis, the Department applied an
autoregressive integrated moving average (ARIMA) model to the FY 2012-
2021 H-2A program data to forecast workers and applications, and
estimated geometric growth rates based on the forecasted data. The
Department conducted multiple ARIMA models on each set of data and used
common goodness of fit measures to determine how well each ARIMA model
fit the data.\100\ Multiple models yielded indistinctive measures of
goodness of fit. Therefore, each model was used to
[[Page 12788]]
project workers and applications through 2032. Then, a geometric growth
rate was calculated using the forecasted data from each model and an
average was taken across each model. This resulted in an estimated
growth rate of 7.5 percent for H-2A applications and 6.3 percent for H-
2A certified workers. The estimated growth rates for applications (7.5
percent) and workers (6.3 percent) were applied to the estimated costs
and transfers of the final rule to forecast participation in the H-2A
program.
---------------------------------------------------------------------------
\99\ Comparing BLS 2030 projections for combined agricultural
workers (SOC 45-2000) with a 17.9 percent growth rate of H-2A
workers yields estimated H-2A workers that are about 127 percent
greater than BLS 2030 projections. The projected workers for the
agricultural sector were obtained from BLS's Occupational
Projections and Worker Characteristics, which may be accessed at
https://www.bls.gov/emp/tables/occupational-projections-and-characteristics.htm https://www.bls.gov/emp/tables/occupational-projections-and-characteristics.htm.
\100\ The Department estimated models with different lags for
autoregressive and moving averages, and orders of integration:
ARIMA(0,2,0); (0,2,1); (0,2,2); (1,2,1); (1,2,2); (2,2,2). For each
model we used the Akaike Information Criteria (AIC) goodness of fit
measure.
---------------------------------------------------------------------------
Estimated Number of Workers and Change in Hours
The Department presents the estimated average number of applicants
and the change in burden hours required for rule familiarization in
Section III.A.3 (Subject-by-Subject Analysis).
Compensation Rates
In Section III.A.3 (Subject-by-Subject Analysis), the Department
presents the costs, including labor, associated with the implementation
of the provisions of the final rule. Exhibit 4 presents the hourly
compensation rates for the SOC codes expected to experience a change in
the number of hours necessary to comply with the final rule. The
Department used the mean hourly wage rate for private sector Human
Resources Specialists (SOC 13-1071).\101\ Wage rates are adjusted to
reflect total compensation, which includes nonwage factors such as
overhead and fringe benefits (e.g., health and retirement benefits). We
use an overhead rate of 17 percent \102\ and a fringe benefits rate
based on the ratio of average total compensation to average wages and
salaries in 2021. For the private sector employees, we use a fringe
benefits rate of 42 percent.\103\ We then multiply the loaded wage
factor by the wage rate to calculate an hourly compensation rate. The
Department used the hourly compensation rates presented in Exhibit 4
throughout this analysis to estimate the labor costs for each
provision.
---------------------------------------------------------------------------
\101\ BLS, May 2021 National Occupational Employment and Wage
Estimates: 13-1071--Human Resources Specialist, https://www.bls.gov/oes/current/oes131071.htm (last modified Mar. 31, 2022).
\102\ See Cody Rice, U.S. Environmental Protection Agency, Wage
Rates for Economic Analyses of the Toxics Release Inventory Program
(June 10, 2002), available at https://www.regulations.gov/document?D=EPA-HQ-OPPT-2014-0650-0005.
\103\ See Employer Costs for Employee Compensation, https://www.bls.gov/news.release/ecec.toc.htm (last modified March 18,
2022). This shows the ratio of total compensation to wages and
salaries for all private industry workers.
Exhibit 4--Compensation Rates
[2021 dollars] *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hourly
Position Grade level Base hourly Loaded wage factor Overhead costs compensation
wage rate rate
(a) (b)......................... (c)......................... d = a + b + c
--------------------------------------------------------------------------------------------------------------------------------------------------------
Private Sector Employees
--------------------------------------------------------------------------------------------------------------------------------------------------------
HR Specialist............................ N/A $34.00 $14.19 ($34.00 x 0.42)...... $5.78 ($34.00 x 0.17)....... $53.97
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers do not add due to rounding.
3. Subject-By-Subject Analysis
The Department's analysis below covers the rule familiarization
costs, unquantifiable costs, transfers, and qualitative benefits of the
final rule. In accordance with Circular A-4, the Department considers
transfers as payments from one group to another that do not affect
total resources available to society. This analysis includes the cost
of rule familiarization and transfers associated with the AEWR wage
structure in this final rule. The Department also described efficiency
impacts, payroll and other transition costs, and the distributional
impacts that could result from this final rule.
Costs
The following section describes the costs of the final rule.
Quantifiable Costs
Rule Familiarization
When the final rule takes effect, H-2A employers will need to
familiarize themselves with the new regulations. Consequently, this
will impose a one-time cost in the first year. To estimate the first-
year cost of rule familiarization, the Department applied the growth
rate of H-2A applications (7.5 percent) to the average number of annual
unique H-2A applicants from 2017 to 2021 (8,856) to determine the
number of unique recurring H-2A applicants impacted in the first year
the rule is in effect. The number of unique H-2A applicants (9,520) was
multiplied by the estimated amount of time required to review the rule
(1 hour).\104\ This number was then multiplied by the hourly
compensation rate of Human Resources Specialists ($53.97 per hour), who
the Department assumes will be responsible for rule familiarization as
they are typically well versed in the wages and benefits structure of
employment. This calculation results in a one-time undiscounted cost of
$513,804 \105\ in the first year after the final rule takes effect. The
annualized cost over the 10-year period is $60,234 and $73,154 at
discount rates of 3 and 7 percent, respectively.
---------------------------------------------------------------------------
\104\ This estimate reflects the nature of the final rule. As a
rulemaking to amend parts of an existing regulation, rather than to
create a new rule, the 1-hour estimate assumes a high number of
readers familiar with the existing regulation.
\105\ Numbers do not add due to rounding.
---------------------------------------------------------------------------
Unquantifiable Costs
a. Efficiency Impacts
The final wage methodology is designed to achieve the statute's
goals of providing employers with an adequate legal supply of
agricultural labor and protecting the wages and working conditions of
workers in the United States similarly employed. The AEWR provides a
floor below which wages cannot be negotiated, thereby strengthening the
ability of this particularly vulnerable labor force to negotiate over
wages with growers who are in a stronger economic and financial
position in contractual negotiations for employment. In the case
relevant labor markets are perfectly competitive, if the final rule
results in a wage floor above competitive market wages, it will produce
some deadweight loss (DWL). In the case of when employers have some
monopsony market power, if the final rule sets a wage floor below
competitive market wages, it may produce some DWL if employers exercise
market power, but otherwise will not. Setting minimum wage rates
[[Page 12789]]
has implications on economic efficiency that are complicated and
difficult to assess because, in certain combinations of SOC codes and
geographies, the gross average hourly wage rates used to determine the
AEWRs annually for each State under this final rule may act as a wage
floor that is above competitive market equilibrium wages for certain
job opportunities, whereas in other job opportunities imperfect
competition may suppress domestic labor markets at quantities below the
competitive market equilibrium. In this case, if the rule raises the
wage floor, resulting wages will be closer to what they would be in a
competitive market, resulting in greater efficiency (and reduced DWL).
These two impacts are dependent on local labor market conditions,
the nature of the agricultural work to be performed and wage payment
structure (i.e., fixed hourly pay versus combination of hourly and
piece-rate pay), the relation of the AEWR to the regional OEWS wage,
and the shape and components (i.e., makeup of nonimmigrant foreign and
domestic workers) of the combined temporary agricultural employment
labor supply curve in the local or regional labor market.
The Department is unable to quantify these efficiency impacts
because it does not have data on all local labor market conditions for
all occupations, data on foreign labor supply curves, and how these
interact with employer demand. The Department requested public comment
on the DWL or other labor market inefficiencies resulting from the
final rule and did not receive any. The efficiency impact of the final
rule is limited only to the 2 percent of H-2A workers whose wages the
final rule will affect, while there would be no change to the DWL for
the other 98 percent of H-2A workers.\106\ Therefore, the DWL resulting
from the final rule is likely very small. Because the market
equilibrium wages for construction workers, supervisors/managers of
farmworkers, and logging workers are above current baseline AEWRs, the
final rule may create some efficiency gain (or decrease in the DWL) for
jobs within the 2 percent when it raises the wage floor from the
current baseline AEWRs toward competitive equilibrium wages if
employers currently exercise market power to prevent wages from being
bid up to competitive equilibrium rates. On the other hand, there may
be instances in which the new wage floor (depending on the job and
geographic area) could be above the market equilibrium wage; this would
result in efficiency loss (or increase in the DWL). A DWL occurs when a
market operates at less than or more than the market equilibrium
output. The AEWR sets compensation in some cases above the equilibrium
level and in other cases may set wage levels that allow employers with
market power to suppress wage rates below the competitive equilibrium,
resulting in a labor shortage. When the AEWR is set above market
equilibrium, the higher cost of labor can lead to a decrease in the
total number of labor hours purchased in the local labor market. On the
contrary, when the AEWR is set below competitive equilibrium and
employers have market power, employers may pay below-competitive-
equilibrium wage rates, decreasing the total number of worker labor
hours purchased in the local labor market. DWL is a function of the
difference between the compensation the employers are willing to pay
for the hours lost and the compensation employees are willing to take
for those hours. In short, DWL is the total loss in economic surplus
resulting from a ``wedge'' between the employer's willingness to pay
for, and the employees' willingness to accept work arising from the
intervention (in this case the AEWR).
---------------------------------------------------------------------------
\106\ Under this final rule the Department would use the AEWR
methodology set forth in the 2010 Final Rule (i.e., setting the
annual AEWRs using the gross average hourly wage rate for field and
livestock workers (combined)) for the SOC codes (45-2041, 45-2091,
45-2092, 45-2093, 53-7064, 45-2099) which comprise 98 percent of H-
2A workers. Of the 25,150 certifications between FY 2020 and FY 2021
only 732 (2.91%) have wage impacts from the final rule.
---------------------------------------------------------------------------
The Department is unable to quantify the DWL without data on the
equilibrium wage arising from each locality and occupational code's
labor demand and combined immigrant foreign worker and domestic U.S.
worker labor supply curves. The following paragraphs qualitatively
discuss changes in the AEWR wages that may result in some DWL. In the
analysis of wage transfers, only 2 percent of workers would be employed
in H-2A job opportunities where the AEWR will change under the final
rule from the current baseline. For the 98 percent of workers employed
in H-2A job opportunities under the six occupational classifications
covering field workers and livestock workers reported by the FLS with
no change to wages, the final rule does not change the DWL and existing
labor market efficiencies or inefficiencies from the current baseline.
In some cases, the baseline AEWR creates a DWL by setting a minimum
wage above the market equilibrium, because the hourly wage represents
an annual weighted average across six occupational classifications
covering a State or multi-State region. Under the final rule when the
AEWR is annually adjusted, the DWL may increase when the AEWR covering
the State or multi-State region also increases and remains above market
equilibrium. Under the final rule this may occur for some, but not all,
positions covering field and livestock workers where the AEWR is
determined using the annual weighted statewide gross hourly wage based
on the OEWS survey.\107\ The OEWS survey does not collect wages for
fixed-site farms and ranches but does include data for establishments
that support farm production activities (i.e., farm labor contractors)
and are engaged in similar agricultural labor or services.
Additionally, the types of agricultural establishments included in the
OEWS survey, such as farm labor contractors, represent an increasing
share of workers certified by the Department on H-2A applications. The
OEWS wage for SOC codes associated with these establishments is
unlikely to reflect any wage suppression created by nonimmigrant
foreign workers' willingness to work at lower wages than domestic U.S.
workers. Therefore, an AEWR determined based on OEWS domestic wage data
would likely be higher than both the baseline AEWR (based on the FLS)
and the market equilibrium wage for temporary agricultural employment.
Furthermore, under the final rule, for workers with roles spanning
multiple SOC codes, the highest wage would be used, which would be
above the market equilibrium wage, on average. Therefore, for most SOC
code and area combinations, the AEWRs under this final rule, set at the
OEWS wage, would serve as a wage floor and may create DWL in the labor
market, as illustrated by Figure 1.
---------------------------------------------------------------------------
\107\ Of the 25,150 certifications in 2020 and 2021, 24,430 were
for field and livestock workers. Of those 24,430, only 28, or 0.1%,
would have AEWR determined based on the OEWS survey.
---------------------------------------------------------------------------
BILLING CODE 4510-FP-P
[[Page 12790]]
[GRAPHIC] [TIFF OMITTED] TR28FE23.009
When employers have market power in the labor market and the AEWR
is set below the domestic competitive market equilibrium wage, then
there may be a DWL in the associated U.S. labor market. In the H-2A
program there are some combinations of SOC codes and geographic areas
where this can occur. For example, workers in higher paid SOC codes and
SOC codes that are typically performed off farm yet qualify under the
H-2A program (e.g., logging operations) have a baseline wage set by the
FLS that is substantially below the U.S. market equilibrium according
to OEWS data covering the State. Under the final rule the AEWR will be
increased for these SOC codes to the State-level OEWS.\108\ In
addition, workers in SOC codes that continue to have an AEWR set by the
FLS, but in areas where FLS data for a given year cannot be reported,
will have the AEWR set by a weighted average OEWS wage for the field
and livestock worker occupational category which may be below market
wage rates for a specific SOC code and geographic area
combination.\109\ In these examples, some U.S. employers that do not
compete with other employers for workers may set wage rates below
competitive equilibrium at a wage level that balances the revenue gains
from an additional worker against the cost of raising wages for all
employees to attract that marginal worker. Some U.S. and foreign
workers who would be willing to work at competitive equilibrium wages
may not be willing to work at a lower wage. In these cases, a DWL is
produced in the U.S. labor market, but under the final rule that DWL is
reduced because of the higher AEWR (see Figure 2).
---------------------------------------------------------------------------
\108\ For example, Mobile Heavy Equipment Mechanics, Except
Engine (49-3042, in ME) has a 2021 AEWR of $14.99 and under the
final rule would have an OEWS wage of $22.85.
\109\ For example, Agricultural Workers, All Other (45-2099, in
SOC) has a 2021 AEWR of $11.81. If FLS data was unavailable it would
have a weighted average OEWS wage of $14.18 and the OEWS wage for
that specific SOC codes is $16.51. Thus, the weighted average OEWS
wage would be below the actual market wage for that SOC code.
---------------------------------------------------------------------------
[[Page 12791]]
[GRAPHIC] [TIFF OMITTED] TR28FE23.010
When labor markets are competitive, an AEWR set below the U.S.-only
labor market equilibrium wage rate in absence of foreign labor, but
above the market equilibrium, with both domestic and foreign labor,
results in DWL for the United States because it reduces domestic
employer surplus more than it increases domestic worker surplus. In a
competitive labor market with no AEWR, there will be no DWL. Figure 3
illustrates this in a simplified case where domestic and foreign
agricultural workers are perfect substitutes, and an infinite supply of
foreign agricultural workers are willing to work at wage rate
WFOREIGN below the U.S.-worker-only market equilibrium wage
rate WUS-ONLY. The competitive market equilibrium will equal
WFOREIGN and domestic employers will hire a combination of
QEFFICIENT_US domestic workers and
(QEFFICIENT_TOTAL-QEFFICIENT_US) foreign workers.
U.S. DWL will be zero because U.S. total surplus (U.S. employer surplus
+ U.S. worker surplus) is maximized.
[[Page 12792]]
[GRAPHIC] [TIFF OMITTED] TR28FE23.011
Setting an AEWR above the competitive labor market equilibrium wage
creates a DWL. Working from the same assumptions as Figure 3, Figure 4
illustrates that setting AEWRBASE above the competitive
equilibrium wage WFOREIGN reduces the total number of
workers employers are willing to hire from QEFFICIENT_TOTAL
to QAEWR_TOTAL. Because employers now hire fewer workers at
a higher wage rate, domestic employer surplus falls. At the higher
wage, the number of domestic workers willing and hired to work
increases from QEFFICIENT_US to QAEWR_US,
possibly increasing domestic worker surplus. Total surplus falls,
generating DWL, because the increase in domestic worker surplus is only
a fraction of the decrease in domestic employer surplus. Figure 4
depicts U.S. DWL as the amount that the decrease in domestic employer
surplus exceeds the increase in domestic worker surplus. Global DWL is
smaller than this if we consider the welfare impacts on foreign workers
from increasing their wages. Increasing the AEWR under the final rule
will extend all these impacts; that is, increase DWL, decrease domestic
employer surplus, and increase domestic worker surplus.
[[Page 12793]]
[GRAPHIC] [TIFF OMITTED] TR28FE23.012
BILLING CODE 4510-FP-C
b. Payroll and Other Transition Costs
The final rule will result in new AEWR wage rates for some SOC code
and geographic area combinations compared to the baseline. Companies
employing H-2A workers will need to update payrolls to account for the
new AEWR wage rates. The Department does not quantify this cost and
expects it to be de minimis because employers already need to update
payrolls when AEWR wage rates are released annually. Therefore, they
already have the capabilities and processes to quickly, and at de
minimis cost, update payrolls when AEWR wage rates change.
The final rule may also result in other transition costs to some
employers for recruitment and training if they hire U.S. workers for
the jobs that H-2A workers perform. The Department sought comment on
these transition costs and did not receive any data from commenters
allowing for quantification of the potential transition expenses such
as recruitment and training.
Transfers
The following section describes the transfers of the final rule
related to the revisions to the wage structure. The Department
considers transfers as payments from one group to another that do not
affect total resources available to society. The transfers measured in
this analysis are wage transfers from U.S. employers to H-2A workers.
H-2A workers are migrant workers who will spend some of their earnings
on consumption goods in the U.S. economy but likely send a large
fraction of their earnings to their home countries.\110\ Therefore, the
Department considers the wage transfers in the analysis as transfer
payments within the global economic system.\111\
---------------------------------------------------------------------------
\110\ Walmsley, Winters, and Ahmed report the remittances to
labor income for migrants from Mexico (the primary source of H-2A
workers) at nearly 20%. The ratio ranges from close to 5% for
migrants from China to close to 70% for migrants from India. These
remittances can provide substantial financial assistance for migrant
workers' families in their home countries. Terrie L. Walmsley et
al., Global Trade Analysis Project, Measuring the Impact of the
Movement of Labor Using a Model of Bilateral Migration Flows (Nov.
2007), available at https://www.gtap.agecon.purdue.edu/resources/download/4635.pdf. See also Dilip Ratha, Remittances: Funds for the
Folks Back Home, International Monetary Fund, https://www.imf.org/external/pubs/ft/fandd/basics/remitt.htm (last updated Feb. 24,
2020); Daniel Costa & Philip Martin, Economic Policy Institute,
Temporary Labor Migration Programs (Aug. 1, 2018), available at
https://www.epi.org/publication/temporary-labor-migration-programs-governance-migrant-worker-rights-and-recommendations-for-the-u-n-global-compact-for-migration/.
\111\ If, instead, the rule was analyzed from the perspective of
the U.S. economy, these wages would be costs since they would be
paid to individuals outside the economy.
---------------------------------------------------------------------------
Section 218(a)(1) of the INA, 8 U.S.C. 1188(a)(1), provides that an
H-2A worker is admissible only if the Secretary of Labor determines
that ``there are not sufficient workers who are able, willing, and
qualified, and who will be available at the time and place needed, to
perform the labor or services involved in the petition, and the
employment of the alien in such labor or services will not adversely
affect the wages and working conditions of workers in the United States
similarly employed.'' In 20 CFR 655.120(a), the Department currently
meets this statutory requirement, in part, by requiring the employer to
offer, advertise in its recruitment, and pay a wage that is the highest
of the AEWR, the prevailing wage, the agreed-upon collective bargaining
wage, the Federal minimum wage, or the State minimum wage. As discussed
below, the Department's final rule maintains this general wage-setting
structure but modifies the methodology by which it establishes the
AEWRs.
Currently, pursuant to the 2010 Final Rule, the AEWR for each State
or region is published annually as a single average hourly gross wage
that is set using the field and livestock workers (combined) data from
the FLS, which is conducted by the USDA's NASS. This methodology
produces a single AEWR for all agricultural workers in a State or
[[Page 12794]]
region, without regard to SOC code, and no AEWR in geographic areas not
surveyed by NASS (e.g., Alaska). As discussed in depth in the preamble,
the Department is concerned that this methodology may have an adverse
effect on the wages of workers in higher paid SOC codes, such as
supervisors of farmworkers, tractor-trailer truck drivers, logging
workers, and construction laborers on farms, whose wages may be
inappropriately lowered by an AEWR established from the wages of the
FLS field and livestock workers (combined) occupational category, which
does not include those workers.
Under this final rule the Department modifies the AEWR methodology
so that it is based on data more specific to the agricultural
occupation of workers in the United States similarly employed. Both the
FLS and OEWS survey provide data tailored to U.S. agricultural workers
and the States and regions where these workers are employed, making
these sources effective in ensuring that the temporary employment of
foreign workers in field and livestock job opportunities will not
adversely affect the wages of workers in the United States similarly
employed. In addition, OEWS data includes employment and gross hourly
wage data from employer establishments that support farm production
activities. Although they do not represent fixed-site farms and
ranches, these establishments employ workers engaged in similar
agricultural labor or services as those workers who are directly
employed by farms and ranches.
As explained above, these types of employer establishments (i.e.,
farm labor contractors) participate in the H-2A program and represent
an increasing share of the worker positions certified by the Department
on H-2A applications both in the predominant field and livestock
workers (combined) occupational group and in SOC codes that are less
common in the H-2A program. While labor demanded from H-2ALCs (i.e.,
farm labor contractors) using the H-2A program in non-range occupations
has significantly increased in recent years, they only represented
approximately 16 percent of all certified H-2A applications in FY
2020.\112\ Individual employers and agricultural associations filing
for one or more individual association members, which generally hire
workers directly for employment, constituted approximately 84 percent
of all H-2A applications.\113\ Using the FLS, which surveys directly
hired agricultural workers, to set AEWRs therefore is more accurate and
reasonable because, in addition to being a comprehensive source of
farmworker wage data, it also surveys the agricultural employers who
make up a significant majority of H-2A applications.
---------------------------------------------------------------------------
\112\ Based on an analysis of temporary agricultural labor
certification data for FY 2020, the Department issued 12,491
temporary agricultural labor certifications covering 272,610 worker
positions for non-range employment. Of this total, the Department
certified 2,052 H-2A applications covering 116,479 worker positions
submitted by, or on behalf of, H-2ALCs; 1,669 H-2A applications
covering 34,236 worker positions submitted by agricultural
associations by, or on behalf of, one of more individual association
members; and 8,770 H-2A applications covering 121,895 worker
positions submitted by individual employers (i.e., fixed-site
agricultural businesses). See ETA, Performance Data, https://www.dol.gov/agencies/eta/foreign-labor/performance (last visited
Sept. 29, 2021).
\113\ Id.
---------------------------------------------------------------------------
Under this final rule the Department uses the AEWR methodology set
forth in the 2010 Final Rule, i.e., setting the annual AEWRs using the
gross average hourly wage rate for field and livestock workers
(combined) in the State or region, as reported by the FLS, when that
data is available, for the following SOC codes:
45-2041--Graders and Sorters, Agricultural Products
45-2091--Agricultural Equipment Operators
45-2092--Farmworkers and Laborers, Crop, Nursery, and
Greenhouse
45-2093--Farmworkers, Farm, Ranch, and Aquacultural Animals
53-7064--Packers and Packagers, Hand
45-2099--Agricultural Workers, All Other
If the FLS does not report the annual gross average hourly wage in
the State or region, the Department will set the annual AEWR for these
SOC codes (45-2041, 45-2091, 45-2092, 45-2093, 53-7064, 45-2099) using
the statewide gross average hourly wage rate the OEWS survey reports.
If the OEWS survey does not report the annual statewide gross average
hourly wage, the Department will set the AEWR for these SOC codes by
using the annual national gross average hourly wage the OEWS survey
reports. To produce an equivalent AEWR for field and livestock worker
job opportunities using the OEWS survey under the final rule, BLS will
compute an annual weighted average hourly wage using the establishment
data reported for these SOC codes at the State and national level.
For all other SOC codes, the Department will annually set the AEWR
for agricultural services or labor based on the statewide annual
average hourly wage reported by the OEWS survey. If the OEWS survey
does not report a statewide annual average hourly wage for the SOC
code, the Department will set the AEWR based on the national annual
average hourly wage reported by the OEWS survey.
To produce a combined field and livestock AEWR using the OEWS, BLS
provided the Department with the weighted average hourly wage for 45-
2041, 45-2091, 45-2092, 45-2093, 53-7064, and 45-2099 SOC codes at the
State and national level using the OEWS May 2020 survey. The OEWS May
2020 wages are applicable to work occurring between July 1, 2021, and
June 30, 2022. The FY 2020 and FY 2021 certification data includes work
occurring as early as October 2019. To determine the appropriate
weighted average hourly wage for these six SOC codes between October
2019 and the start of the OEWS May 2020 period, July 1, 2021, the
Department estimated the weighted average hourly wage for OEWS May 2018
and OEWS May 2019 data sets. Using public OEWS survey data, the
Department calculated the average annual percent change for wages in
these six SOC codes between OEWS May 2018 and OEWS May 2019 and between
OEWS May 2019 and OEWS May 2020. To determine the weighted average
hourly wage for the six SOC codes in OEWS May 2019, the Department used
the percentage growth in the wages to adjust the BLS weighted average
hourly wage.\114\
---------------------------------------------------------------------------
\114\ The Department divided the BLS calculated weighed average
hourly wage rate in OEWS May 2020 by 1 + the average percent change.
Similarly, the OEWS May 2018 weighted average hourly wage was
determined by dividing the OEWS May 2019 weighted average hourly
wage by 1 + the average percent change. The Department completed
these calculations at the State and national level.
---------------------------------------------------------------------------
The Department calculated the impact on wages that would occur from
the implementation of the revised AEWR methodology. For each H-2A
certification in FY 2020 through FY 2021, the Department calculated
total wages under the current AEWR baseline, i.e., pursuant to the 2010
Final Rule, and total wages under the revised AEWR methodology. Then,
the Department determined the annual wage impact in CY 2020 and CY 2021
by subtracting the AEWR baseline wage from the final rule wage. The
Department summed the wage impacts in each calendar year, converted the
wage impact to 2021 dollars using the ECI \115\ and took the average
impact of CY 2020 and CY 2021.\116\ Wage impacts
[[Page 12795]]
for 2023 to 2032 were estimated by applying the H-2A workers growth
rate (6.3 percent) to reflect that the number of H-2A workers affected
(and the total wage impact) will grow annually at 6.3 percent. The
Department assumed that the difference in wage rates between the
baseline and the final rule wage will be the same over the 10-year
analysis period. In addition, it is assumed that the geographic and SOC
distribution of H-2A workers remain the same over the 10-year analysis
period. Because the final rule wage-setting methodology would not
retroactively impact workers and OEWS wages in the May 2022 OEWS will
not apply until July 2023, the wage impact in 2023 is divided by 2 to
account for the fact that only half the year of wages would be
impacted.\117\
---------------------------------------------------------------------------
\115\ BLS, Employment Cost Index Archived News Releases, https://www.bls.gov/bls/news-release/eci.htm (last modified July 30, 2021).
\116\ While there were working days and therefore wage impacts
in CY 2019 and CY 2022 in the FY 2020 and FY 2021 certification
data, the Department did not include wage impacts in CY 2019 and CY
2022 in the average annual impact calculations because a full CY of
work is not captured in the FY 2020 and FY 2021 certification data
for CY 2019 and CY 2022. At the time of publishing only one quarter
of FY 2022 is available that would have work for CY 2022, therefore
the Department maintains the use of FY 2020 and FY 2021 data.
\117\ The Department assumes in the economic analysis of the
final rule that the final rule will not become effective until the
second half of the year 2023.
---------------------------------------------------------------------------
The Department provides two examples illustrating the above wage
calculation methodology for H-2A certifications. Exhibits 5 and 6
illustrate how total wages are calculated for the baseline and the
final rule. The number of workers certified is multiplied by the number
of hours worked each day, the number of days in a year that the
employees worked, and the AEWR baseline for the year(s) in which the
work occurred (Exhibit 5 provides an example of the calculation of the
AEWR baseline). In the example provided in Exhibit 5 for SOC code 45-
2092, the AEWR baseline wage is not available in Alaska, so the
baseline wage, for the purpose of this analysis, is set by the public
OEWS State wage as a proxy for estimating wage transfers.
Exhibit 5--AEWR Wage Under the Baseline (Example Case)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of Basic Number of Number of
SOC code Baseline wage certified number of days worked days worked Wage 2020 Wage 2021 Total AEWR Total AEWR
source workers hours in 2020 in 2021 wages 2020 wages 2021
(a) (b) (c) (d) (e) (f) (a*(b/ (a*(b/
5)*c*e) 5)*d*f)
--------------------------------------------------------------------------------------------------------------------------------------------------------
45-2092....................... FLS AEWR 14 40 152 10 $15.54 $15.72 $264,552.96 $17,606.40
(unavailable);
OEWS State.
--------------------------------------------------------------------------------------------------------------------------------------------------------
For calculating the AEWR wage under the final rule, the Department
multiplied the number of certified workers by the number of hours
worked each day, the number of days in a year that the employees
worked, and the annual average hourly gross State AEWR wage for SOC
codes set by the AEWR. In the example provided in Exhibit 6, for
farmworkers (SOC code 45-2092, Farmworkers and Laborers, Crop, Nursery,
and Greenhouse) the FLS AEWR wage is not available in Alaska, so the
AEWR is set by the weighted average OEWS wage. For SOC codes outside of
45-2041, 45-2091, 45-2092, 45-2093, 53-7064, and 45-2099, the annual
average hourly gross wage from the State-level OEWS-based wage for the
appropriate SOC code and worksite State is used, or the national OEWS-
based wage is used if the State-level wage is not available.
Exhibit 6--AEWR Wage Under the Final Rule (Example Case)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of Basic Number of Number of
SOC code Final rule wage certified number of days worked days worked Wage 2020 Wage 2021 Total AEWR Total AEWR
source workers hours in 2020 in 2021 wages 2020 wages 2021
(a) (b) (c) (d) (e) (f) (a*(b/ (a*(b/
5)*c*e) 5)*d*f)
--------------------------------------------------------------------------------------------------------------------------------------------------------
45-2092....................... FLS AEWR 14 40 152 10 $15.15 $16.78 $257,913.60 $18,793.60
(unavailable);
weighted
average OEWS.
13-1074....................... OEWS............ 10 35 280 50 25.45 29.84 498,820.00 104,440.00
--------------------------------------------------------------------------------------------------------------------------------------------------------
The changes in wages constitute a transfer from H-2A employers to
H-2A employees for SOC codes set by the OEWS survey. For SOC codes set
by the FLS AEWR there is no wage impact, unless the worksite location
is in Alaska or Puerto Rico where no AEWR currently exists because the
FLS does not collect wage data covering these geographic areas.\118\ To
account for the growth rate in H-2A workers the total transfers in each
year are increased annually by the estimated growth rate of H-2A
workers (6.3 percent).\119\ The results are average annual undiscounted
transfers of $37.5 million. The total transfer over the 10-year period
is estimated at $375.07 million undiscounted, or $322.73 million and
$268.47 million at discount rates of 3 and 7 percent, respectively. The
annualized transfer over the 10-year period is $37.83 million and
$38.22 million at discount rates of 3 and 7 percent, respectively.
---------------------------------------------------------------------------
\118\ There is no FLS wage available for Alaska or Puerto Rico.
Because of that, wages under the baseline in this analysis are set
by the public OEWS State data as a proxy for estimating wage
transfers. The H-2A wage provisions are the highest of (1) AEWR, (2)
SWA prevailing wage, (3) CBA wage, or (4) federal or state minimum
wage. If an AEWR is not available for a geographic area, which has
been the case for Alaska and Puerto Rico, then the current minimum
wage shifts to one of the other 3 sources if they are available. If
there is no SWA prevailing wage or CBA wage, for example, then the
Federal or state minimum wage (whichever is highest) would be
minimum wage. However, we cannot accurately identify the baseline
wage and its source in the certification when the AEWR is not
available and therefore, used the OEWS State wage as a proxy for the
baseline wage in the economic analysis that represents a likely wage
estimate within the range from the 4 wage sources.
Under the final rule, for SOC codes that have worksite locations
in Alaska or Puerto Rico, the hourly wage would be set by the
weighted average hourly wage rate calculated by BLS. Therefore,
those certifications may have a wage impact under the final rule.
\119\ Total transfers in each year are increased with the
following formula to account for an annual increase in the
underlying population of H-2A workers:
Transfer*(1.056[supcaret](Current year-Base year)).
---------------------------------------------------------------------------
The estimated transfers are likely on the high end of potential
transfers. The
[[Page 12796]]
Department does not make any adjustment to account for H-2A
certifications that are made but do not end up in jobs with realized
wages. In FY 2020, according to State Department data, 213,394 H-2A
visas were issued.\120\ In FY 2020, 275,430 workers were associated
with H-2A certifications. The Department is unable to verify the
specific H-2A certifications that do not end up in materialized jobs
and so cannot adjust wage transfers to account for differences in
regional, and by SOC code, job materialization. Overall, the data on H-
2A visas compared to workers associated with H-2A certifications
indicates that about 80 percent of certified positions have associated
H-2A visas. The remaining 20 percent could be jobs that did not
materialize or that U.S. workers filled. As a result, our estimates for
wage transfers are likely overstated. The Department is unable to
identify the occupations associated with the 20 percent of workers that
did not materialize. Therefore, the Department believes that our
estimates for wage transfers are reasonable based on the available data
and historical practice.
---------------------------------------------------------------------------
\120\ U.S. Department of State, Nonimmigrant Visas Issued by
Classification, Fiscal Years 2016-2020, available at https://travel.state.gov/content/dam/visas/Statistics/AnnualReports/FY2020AnnualReport/FY20AnnualReport-TableXVB.pdf.
---------------------------------------------------------------------------
The increase (or decrease) in the wage rates for H-2A workers also
represents a wage transfer from employers to corresponding workers
performing similar work for the employer, not just the H-2A workers
employed under the work contract. The higher (or lower) wages paid to
H-2A workers associated with the final rule's methodology for
determining the AEWRs will also result in wage changes to corresponding
workers. However, the Department does not collect or possess sufficient
information about the number of corresponding workers affected and
their wage payment structures to reasonably measure the transfers to
corresponding workers. Employers are not required to provide the
Department, on any application or report, the estimated or actual total
number of workers in corresponding employment. Although each employer,
as a condition of being granted a temporary agricultural labor
certification, must provide the Department with a report of its initial
recruitment efforts for U.S. workers, including the name and contact
information of each U.S. worker who applied or was referred to the job,
such information typically reflects only a very small portion of the
total recruitment period, which runs through 50 percent of the
certified work contract period, and does not account for any other
workers who may be considered in corresponding employment and already
working for the employer. Because the report of initial recruitment
efforts for U.S. workers only captures information from a limited
portion of the recruitment period and does not account for workers
already employed by the employer who may be in corresponding
employment, the Department is not able to draw on this information to
meaningfully assess the total number of corresponding workers affected
or their wage payment structures, without which the Department is
unable to reasonably measure the transfers to corresponding workers.
The Department sought public comment on how these wage transfer impacts
can be calculated but received no comments. Finally, the Department is
not able to estimate how much of the wage transfer stays in the U.S.
economy. Likely a substantial portion of the wage transfer is from U.S.
employers to the home economy of H-2A workers. Nonimmigrant foreign H-
2A workers may spend wages earned in the United States, spend the money
outside the United States, send the money outside the United States, or
some combination. The Department also invited comments regarding how
these wage transfer impacts can be calculated but received no comments.
Qualitative Benefits
This final rule makes an important update to the AEWR to ensure
that it protects workers in the United States in positions where the
existing wage methodology may adversely affect wages because the FLS
does not adequately collect or consistently report wage data at a State
or regional level (e.g., tractor-trailer truck drivers, farm
supervisors and managers, logging workers, construction workers, and
many occupations in contract employment). Workers in these positions
would benefit from the protections afforded them by an AEWR determined
using a more accurate data source.
The AEWR is the rate that the Department has determined is
necessary to ensure the employment of H-2A foreign workers will not
have an adverse effect on the wages of agricultural workers in the
United States similarly employed. A more accurate AEWR for workers in
jobs where the FLS is inadequate will guard against the potential for
the entry of H-2A foreign workers to adversely affect the wages and
working conditions of workers in the United States similarly employed
in these jobs. The potential for the employment of foreign workers to
adversely affect the wages of similarly employed workers is heightened
in the H-2A program because the H-2A program is not subject to a
statutory cap on the number of foreign workers who may be admitted to
work in agricultural jobs. Consequently, concerns about wage depression
from the employment of foreign workers are particularly acute because
access to an unlimited number of foreign workers in a particular labor
market and occupation could cause the prevailing wage of workers in the
United States similarly employed to stagnate or decrease.
Addressing the potential adverse effect that the employment of
temporary foreign workers may have on the wages of agricultural workers
in the United States similarly employed is particularly important
because U.S. agricultural workers are, in many cases, especially
susceptible to adverse effects caused by the employment of temporary
foreign workers. As discussed in prior rulemakings, the Department
continues to hold the view that ``U.S. agricultural workers need
protection from potential adverse effects of the use of foreign
temporary workers, because they generally comprise an especially
vulnerable population whose low educational attainment, low skills, low
rates of unionization and high rates of unemployment leave them with
few alternatives in the non-farm labor market.'' \121\ As a result,
``their ability to negotiate wages and working conditions with farm
operators or agriculture service employers is quite limited.'' \122\
The AEWR is one way to prevent such adverse effect, as it provides ``a
floor below which wages cannot be negotiated, thereby strengthening the
ability of this particularly vulnerable labor force to negotiate over
wages with growers who are in a stronger economic and financial
position in contractual negotiations for employment.'' \123\
---------------------------------------------------------------------------
\121\ Final Rule, Temporary Agricultural Employment of H-2A
Aliens in the United States, 74 FR 45905, 45911 (Sep. 4, 2009).
\122\ Id.
\123\ Id.
---------------------------------------------------------------------------
Distributional Impact Analysis
E.O. 13985, Advancing Racial Equity and Support for Underserved
Communities Through the Federal Government, seeks to advance equity in
agency actions and programs. The term equity is defined as consistent
and systematic fair, just, and impartial treatment of individuals,
including individuals who belong to underserved communities, such as
Black, Latino, and
[[Page 12797]]
Indigenous and Native American persons; Asian Americans and Pacific
Islanders; other persons of color; members of religious minorities;
lesbian, gay, bisexual, transgender, and queer (LGBTQ+) persons;
persons with disabilities; persons who live in rural areas; and persons
otherwise adversely affected by persistent poverty or inequality.
In addition, OMB Circular A-4, which provides guidelines for
preparing economic analyses of regulations, discusses various ways that
the distributional effects of a regulatory action across the population
and economy can be assessed (e.g., income groups, race, sex, industry
sector, and geography). Circular A-4 states the following:
``The regulatory analysis should provide a separate description of
distributional effects (i.e., how both benefits and costs are
distributed among sub-populations of particular concern) so that
decision makers can properly consider them along with the effects on
economic efficiency (i.e., net benefits). Executive Order 13563 and
Executive 12866 authorize this approach. Where distributive effects are
thought to be important, the effects of various regulatory alternatives
should be described quantitatively to the extent possible, including
the magnitude, likelihood, and severity of impacts on particular
groups.''
To assess the impact of the final rule on equity the Department
used Current Population Survey (CPS) data from BLS \124\ to determine
the ethnic and racial makeup of the most common SOC codes in the H-2A
program. CPS only included data for three races, White, Black or
African American, and Asian, and one ethnicity, Hispanic or Latino. The
results of this analysis for the top ten H-2A SOC codes that experience
wage impacts (SOC codes other than 45-2041, 45-2091, 45-2092, 45-2093,
53-7064, 45-2099) are presented in Exhibit 7. These top 10 SOC codes
\125\ account for more than 90 percent of all the workers in the FY
2021 certification data that experience wage impacts (certifications
with wages set by the OEWS).
---------------------------------------------------------------------------
\124\ BLS, Labor Force Statistics from the Current Population
Survey, Employed persons by occupation, race, Hispanic or Latino
ethnicity, and sex, https://www.bls.gov/cps/tables.htm (last
modified May 14, 2021).
\125\ Farm Labor Contractors are within the Top 10 impacted H-2A
SOC codes, but because Farm Labor Contractor are employers it is
excluded from Exhibit 7.
Exhibit 7--Racial/Ethnic Distribution of the Top 10 H-2A SOC Codes by Number of Workers With Wage Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent of employed people
---------------------------------------------------------------- # of FY 2021
SOC Code Description Black or Q1-Q3 H-2A
White (%) African Asian (%) Hispanic or workers
American (%) Latino (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
45-0000................................... Farming, fishing, and 90 4 2 43 **
forestry occupations.
47-2061................................... Construction laborers....... 87 8 1 46 2,107
53-3032................................... Heavy and tractor-trailer 77 17 3 23 526
truck drivers.
45-1011................................... First-line supervisors of 90 5 3 28 328
farming, fishing, and
forestry workers.
47-3012................................... Helpers--carpenters......... N/A N/A N/A N/A 104
45-4022................................... Logging equipment operators. N/A N/A N/A N/A 57
49-3041................................... Farm equipment mechanics and 94 4 1 19 55
service technicians.
47-2031................................... Carpenters.................. 88 7 2 36 30
47-3019................................... Helpers, construction N/A N/A N/A N/A 18
trades, all other.
47-2051................................... Cement masons and concrete 83 8 1 53 16
finishers.
--------------------------------------------------------------------------------------------------------------------------------------------------------
*N/A indicates that racial/ethnic data for that SOC code was not reported in the CPS data.
**45-2000 is included as a reference for the racial/ethnic distribution of agricultural workers generally.
Note: Estimates for the above race groups (White, Black or African American, and Asian) do not sum to totals because data are not presented for all
races. Persons whose ethnicity is identified as Hispanic or Latino may be of any race.
4. Summary of the Analysis
Exhibit 8 summarizes the estimated total costs and transfers of the
final rule over the 10-year analysis period. The Department estimates
the annualized costs of the final rule at $0.07 million and the
annualized transfers (from H-2A employers to employees) at $38.22
million, at a discount rate of 7 percent.
Exhibit 8--Estimated Monetized Costs and Transfers of the Final Rule
[2021 $millions]
------------------------------------------------------------------------
Year Costs Transfers
------------------------------------------------------------------------
2023.................................... $0.51 $14.57
2024.................................... 0.00 30.98
2025.................................... 0.00 32.94
2026.................................... 0.00 35.01
2027.................................... 0.00 37.22
2028.................................... 0.00 39.56
2029.................................... 0.00 42.05
2030.................................... 0.00 44.70
[[Page 12798]]
2031.................................... 0.00 47.52
2032.................................... 0.00 50.51
Undiscounted 10-Year Total.............. 0.51 375.07
10-Year Total with a Discount Rate of 3% 0.51 322.73
10-Year Total with a Discount Rate of 7% 0.51 268.47
10-Year Average......................... 0.05 37.51
Annualized with a Discount Rate of 3%... 0.06 37.83
Annualized with a Discount Rate of 7%... 0.07 38.22
------------------------------------------------------------------------
5. Regulatory Alternatives
The Department maintains from the proposed rule the analysis of two
alternatives to the final rule. The final rule requires the use of the
FLS-based field and livestock worker (combined) average gross hourly
wage, where USDA reports such as wage, as the sole source for
establishing the AEWR in job opportunities classified under one of the
following SOC codes:
45-2041--Graders and Sorters, Agricultural Products
45-2091--Agricultural Equipment Operators
45-2092--Farmworkers and Laborers, Crop, Nursery, and
Greenhouse
45-2093--Farmworkers, Farm, Ranch, and Aquacultural Animals
53-7064--Packers and Packagers, Hand
45-2099--Agricultural Workers, All Other
For each alternative analyzed, job opportunities classified under
any other SOC code will have the AEWR set using the same methodology in
the final rule: the AEWR for each SOC code would be the statewide
annual average hourly gross wage for that SOC code as reported by the
OEWS survey. If the statewide wage is not available, the AEWR would be
set by the national annual average hourly wage for that SOC code as
reported by the OEWS survey.
Under the first regulatory alternative, the Department considered
setting the AEWR for job opportunities classified under SOC codes 45-
2041, 45-2091, 45-2092, 45-2093, 53-7064, and 45-2099, using the
highest of the annual average hourly gross wage reported by the FLS or
the weighted average hourly gross wage provided by the OEWS for these
same SOC codes for the State or region. If a statewide annual average
hourly gross wage in the State is not reported in the FLS or the OEWS
survey, the AEWR for the SOC code shall be determined using the
national annual average hourly gross wage as reported by the FLS or the
OEWS survey.
The total impact of the first regulatory alternative was calculated
using the methodology described to calculate proposed wage impacts
using FY 2020 to FY 2021 certification data. The Department estimated
average annual undiscounted transfers of $117.03 million. The total
transfer over the 10-year period was estimated at $1,170.34 million
undiscounted, or $1,007.01 million and $837.71 million at discount
rates of 3 and 7 percent, respectively. The annualized transfer over
the 10-year period was $118.05 million and $119.27 million at discount
rates of 3 and 7 percent, respectively.
Under the second regulatory alternative, the Department would set
the AEWR using only the OEWS average hourly wage for the SOC code and
State (i.e., use of FLS-based wages in establishing AEWRs under the H-
2A program would be discontinued). When OEWS State data is not
available, the Department would set the AEWR at the OEWS national
average hourly wage for the SOC code under this alternative. This
alternative reflects the transfers that would occur if, for example,
the USDA survey was discontinued or suspended and, as a result, the
Department would set the AEWRs for each State using the OEWS data. For
SOC codes 45-2041, 45-2091, 45-2092, 45-2093, 53-7064, and 45-2099, the
weighted average hourly wage provided by BLS at the State and national
level is applied. The Department again used the same method to
calculate the total impact of the regulatory alternative and found
that, unlike the proposed rule and first regulatory alternative, the
second regulatory alternative would result in transfers from H-2A
employees to employers. The Department estimated average annual
undiscounted transfers of $75.0672.30 million. The total transfer over
the 10-year period was estimated at $750.6523.03 million undiscounted,
or $645.8923.03 million and $537.3019.28 million at discount rates of 3
and 7 percent, respectively. The annualized transfer over the 10-year
period was $75.713.04 million and $76.503.93 million at discount rates
of 3 and 7 percent, respectively.
Exhibit 9 summarizes the estimated transfers associated with the
three considered revised wage structures over the 10-year analysis
period. Transfers under the proposal and the first regulatory
alternative are transfers from H-2A employers to H-2A employees and
transfers under the second alternative are transfers from H-2A
employees to H-2A employers.
Exhibit 9--Estimated Monetized Transfers of the Final Rule
[2021 $millions]
----------------------------------------------------------------------------------------------------------------
Regulatory Regulatory
Final rule alternative 1 alternative 2
(transfers (transfers (transfers
from employers from employers from employees
to employees) to employees) to employers)
----------------------------------------------------------------------------------------------------------------
Total 10-Year Transfer.......................................... $375 $1,170 $751
Total with 3% Discount.......................................... 323 1,007 646
Total with 7% Discount.......................................... 268 838 537
Annualized Undiscounted Transfer................................ 38 117 75
Annualized Transfer with 3% Discount............................ 38 118 76
[[Page 12799]]
Annualized Transfer with 7% Discount............................ 38 119 77
----------------------------------------------------------------------------------------------------------------
The Department prefers the chosen approach of the final rule
because it allows specific OEWS wages for workers in higher paid SOC
codes, such as supervisors of farmworkers, tractor-trailer truck
drivers, logging workers, and construction laborers on farms while
maintaining the use of FLS data for SOC codes with the majority of H-2A
workers. As the Department has stated previously, the FLS, which
surveys directly hired agricultural workers, is the best source of wage
data to set AEWRs for the vast majority of H-2A positions. This is in
part because the FLS is a more comprehensive source of farmworker wage
date than the OEWS survey. The chosen approach also minimizes transfers
compared to the two alternatives, and ensures greater stability in the
wage obligations of employers by determining AEWRs, including annual
adjustments, using the data source that best reflects the wages of
workers in the United States similarly employed.
B. Regulatory Flexibility Analysis and Small Business Regulatory
Enforcement Fairness Act and Executive Order 13272: Proper
Consideration of Small Entities in Agency Rulemaking
The RFA, 5 U.S.C. 601 et seq., as amended by the Small Business
Regulatory Enforcement Fairness Act of 1996, Public Law 104-121 (March
29, 1996), hereafter jointly referred to as the RFA, initial regulatory
flexibility analysis (IRFA) when proposing, and a final regulatory
flexibility analysis (FRFA) when issuing, requires Federal agencies
engaged in rulemaking to assess the impact of regulations that will
have a significant economic impact on a substantial number of small
entities. The Department certifies that the final rule does not have a
significant economic impact on a substantial number of small entities.
The Department presents the basis for this conclusion in the analysis
below.
Public Comments
Multiple commenters, including the Small Business Administration
(SBA), asserted the Department underestimated the costs to small
businesses. These costs include transition costs, filing fees, and wage
increases that all lower profit margins for small businesses
potentially leading to small business closures. One small farm owner
stated they do not have enough division of labor to allocate separate
workers for specific tasks resulting in the need to pay all workers the
higher wage, which they are unable to afford. The Department
acknowledges that some administrative costs to small businesses for
recruitment and training if they hire U.S. workers for the jobs that H-
2A workers perform were not quantified due to the lack of data, as this
data would be typically known to small businesses, rather than in the
possession of the Department. In the NPRM, the Department sought public
comment on these administrative costs but did not receive any comments
or information to allow for a quantification of these costs. In
addition, the Department considers the impact of the inability to
quantify these costs to be de minimis because of the limited overall
impact of this final rule on small employers. Specifically, the
analysis in this RFA section estimates the impacts of the rule based on
actual wage records in FY 2020 and FY 2021 for the most accurate impact
of the revised AEWR structure. Based on the Department's analysis,
approximately 98 percent of all small employers will have impacts of
the final rule amounting to less than 1 percent of their revenue.
Definition of Small Entity
The RFA defines a ``small entity'' as a (1) small not-for-profit
organization, (2) small governmental jurisdiction, or (3) small
business. The Department used the entity size standards defined by the
SBA, in effect as of August 19, 2019, to classify entities as
small.\126\ SBA establishes separate standards for individual 6-digit
North American Industry Classification System (NAICS) industry codes,
and standard cutoffs are typically based on either the average number
of employees, or the average annual receipts. For example, small
businesses are generally defined as having fewer than 500, 1,000, or
1,250 employees in manufacturing industries and less than $7.5 million
in average annual receipts for nonmanufacturing industries. However,
some exceptions do exist, the most notable being that depository
institutions (including credit unions, commercial banks, and
noncommercial banks) are classified by total assets (small is defined
as less than $550 million in assets). Small governmental jurisdictions
are another noteworthy exception. They are defined as the governments
of cities, counties, towns, townships, villages, school districts, or
special districts with populations of less than 50,000 people.\127\
---------------------------------------------------------------------------
\126\ SBA, Table of Small Business Size Standards Matched to
North American Industry Classification System Codes (Aug. 2019),
https://www.sba.gov/document/support--table-size-standards.
\127\ See https://advocacy.sba.gov/resources/the-regulatory-flexibility-act for details.
---------------------------------------------------------------------------
Number of Small Entities
The Department collected employment and annual revenue data from
the business information provider Data Axle USA \128\ and merged that
data into the H-2A disclosure data for FY 2020 and FY 2021. This
process allowed the Department to identify the number and type of small
entities in the H-2A disclosure data as well as their annual revenues.
The Department determined the number of unique employers in the FY 2020
and FY 2021 certification data based on the employer's name and city.
The Department identified 9,927 unique employers (excluding labor
contractors).\129\ Of those 9,927 employers, the Department was able to
obtain data matches of revenue and employees for 2,615 H-2A employers
in the FY 2020 and FY 2021 certification data. Of those 2,615
employers, the Department determined that 2,105 were
[[Page 12800]]
small (80.5 percent).\130\ These unique small entities had an average
of 11 employees and average annual revenue of approximately $3.62
million. Of these small unique entities, 2,085 of them had revenue data
available from Data Axle. The Department's analysis of the impact of
this final rule on small entities is based on the number of small
unique entities (2,085 with revenue data). Compared to the proposed
rule, the final rule added Quarter 4 of FY 2021 certification data
which contained 758 new unique employers that did not match employers
in the Data Axle data and are, therefore, not included in this
analysis. However, the Department expects the impacts for those 758
employers to follow the distribution of impacts analyzed in this RFA.
---------------------------------------------------------------------------
\128\ Data Axle USA is a business database that provide
information on business size by employment and revenue. https://www.data-axle.com/.
\129\ Labor contractors are not included because wage impacts
associated with this final rule is incurred by employers not by
labor contractors. The Department believes that labor contractors
will adjust their contracts to the new wage rates and thereby pass
the costs of any new wage rates on to their clients.
\130\ SBA, Table of Small Business Size Standards Matched to
North American Industry Classification System Codes (Aug. 2019),
https://www.sba.gov/document/support--table-size-standards.
---------------------------------------------------------------------------
To provide clarity on the agricultural industries impacted by this
regulation, Exhibit 10 shows the number of unique H-2A small entity
employers with certifications in the FY 2020 and FY 2021 certification
data within each NAICS code at the 6-digit level.
Exhibit 10--Number of H-2A Small Employers by NAICS Code
----------------------------------------------------------------------------------------------------------------
Number of
6-Digit NAICS Description employers Percent
----------------------------------------------------------------------------------------------------------------
111998 All Other Miscellaneous Crop Farming............. 611 31
444220 Nursery, Garden Center, and Farm Supply Stores... 162 8
561730 Landscaping Services............................. 134 7
445230 Fruit and Vegetable Markets...................... 127 6
424480 Fresh Fruit and Vegetable Merchant Wholesalers... 84 4
111339 Other Noncitrus Fruit Farming.................... 78 4
112990 All Other Animal Production...................... 57 3
424930 Flower, Nursery Stock, and Florists' Supplies 51 3
Merchant Wholesalers............................
424910 Farm Supplies Merchant Wholesalers............... 41 2
484230 Specialized Freight (except Used Goods) Trucking, 39 2
Long-Distance...................................
----------------------------------------------------------------------------------------------------------------
Projected Impacts to Affected Small Entities
The Department has estimated the incremental costs for small
entities from the baseline (i.e., the 2010 Final Rule: Temporary
Agricultural Employment of H-2A Aliens in the United States) to this
final rule. As discussed in previous sections, the Department estimates
impacts using historical certification data and, therefore, simulates
the impacts of the final rule to each actual employer in the H-2A
program rather than using representative data for employers within a
given sector. The Department estimated the costs of (1) time to read
and review the final rule and (2) wage costs. The estimates included in
this analysis are consistent with those presented in the E.O. 12866
section.
The Department estimates that small entities not classified as H-
2ALCs, which consists of 2,085 unique small entities, would incur a
one-time cost of $55.42 to familiarize themselves with the rule.\131\
---------------------------------------------------------------------------
\131\ $34.00 + $34.00(0.46) + $34.00(0.17) = $55.42. Numbers do
not add due to rounding.
---------------------------------------------------------------------------
In addition to the cost of rule familiarization, each small entity
may have an increase in the wage costs due to the revisions to the wage
structure. To estimate the wage impact for each small entity we
followed the methodology presented in the E.O. 12866 section. For each
certification of a small entity, the Department calculated total wage
impacts of the final rule in CY 2020 and CY 2021. The Department
estimates the wage impact on all small entities is $4,582 on average.
Many of the small entities have no wage impact from the final rule
because they typically do not hire H-2A workers in the occupations that
are subject to wage changes in the final rule. Of small entities with
wage impacts, their average wage impact is $149,541.
The Department calculated the proportion of each small entity's
total revenue that would be impacted by the costs of the final rule to
determine if the final rule would have a significant and substantial
impact on small entities. The cost impacts included estimated first-
year costs and the wage impact introduced by the proposed rule. The
Department used a total cost estimate of 3 percent of revenue as the
threshold for a significant individual impact and set a total of 15
percent of small entities incurring a significant impact as the
threshold for a substantial impact on small entities.
A threshold of 3 percent of revenue has been used in prior
rulemakings for the definition of significant economic impact.\132\
This threshold is also consistent with that sometimes used by other
agencies.\133\
---------------------------------------------------------------------------
\132\ See, e.g., NPRM, Increasing the Minimum Wage for Federal
Contractors, 79 FR 60634 (Oct. 7, 2014) (establishing a minimum wage
for contractors); Final Rule, Discrimination on the Basis of Sex, 81
FR 39108 (June 15, 2016).
\133\ See, e.g., Final Rule, Medicare and Medicaid Programs;
Regulatory Provisions to Promote Program Efficiency, Transparency,
and Burden Reduction; Part II, 79 FR 27106 (May 12, 2014)
(Department of Health and Human Services rule stating that under its
agency guidelines for conducting regulatory flexibility analyses,
actions that do not negatively affect costs or revenues by more than
3 percent annually are not economically significant).
---------------------------------------------------------------------------
Exhibit 11 provides a breakdown of small entities by the proportion
of revenue affected by the costs of the final rule. Of the 2,085 unique
small entities with revenue data in the FY 2020 and FY 2021
certification data, 1.3 percent of employers are estimated to have more
than 3 percent of their total revenue impacted in the first year based
on 2020 data and 1.8 percent of employers are estimated to have more
than 3 percent of their total revenue impacted in the first year based
on 2021 data. Based on the findings presented in Exhibit 11, the final
rule does not have a significant economic impact on a substantial
number of small H-2A employers.
[[Page 12801]]
Exhibit 11--Cost Impacts as a Proportion of Total Revenue for Small Entities
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020, by NAICS code
Proportion of revenue impacted -----------------------------------------------------------------------------------------------
111998 (%) 444220 (%) 561730 (%) 445230 (%) All other (%) Total (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
<1%..................................................... 601 (98.4) 162 (100.0) 132 (98.5) 126 (99.2) 1033 (98.3) 2054 (98.5)
1%-2%................................................... 0 (0.0) 0 (0.0) 0 (0.0) 0 (0.0) 3 (0.3) 3 (0.1)
2%-3%................................................... 0 (0.0) 0 (0.0) 0 (0.0) 0 (0.0) 1 (0.1) 1 (0.0)
3%-4%................................................... 0 (0.0) 0 (0.0) 0 (0.0) 0 (0.0) 2 (0.2) 2 (0.1)
4%-5%................................................... 0 (0.0) 0 (0.0) 0 (0.0) 0 (0.0) 1 (0.1) 1 (0.0)
>5%..................................................... 10 (1.6) 0 (0.0) 2 (1.5) 1 (0.8) 11 (1.0) 24 (1.2)
Total >3%............................................... 10 (1.6) 0 (0.0) 2 (1.5) 1 (0.8) 14 (1.3) 27 (1.3)
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021, by NAICS code
Proportion of revenue impacted -----------------------------------------------------------------------------------------------
111998 (%) 444220 (%) 561730 (%) 445230 (%) All other (%) Total (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
<1%..................................................... 599 (98.0) 162 (100.0) 131 (97.8) 126 (99.2) 1021 (97.1) 2039 (97.8)
1%-2%................................................... 4 (0.7) 0 (0.0) 1 (0.7) 0 (0.0) 2 (0.2) 7 (0.3)
2%-3%................................................... 0 (0.0) 0 (0.0) 0 (0.0) 0 (0.0) 2 (0.2) 2 (0.1)
3%-4%................................................... 1 (0.2) 0 (0.0) 0 (0.0) 0 (0.0) 2 (0.2) 3 (0.1)
4%-5%................................................... 1 (0.2) 0 (0.0) 0 (0.0) 0 (0.0) 2 (0.2) 3 (0.1)
>5%..................................................... 6 (1.0) 0 (0.0) 2 (1.5) 1 (0.8) 22 (2.1) 31 (1.5)
Total >3%............................................... 8 (1.3) 0 (0.0) 2 (1.5) 1 (0.8) 26 (2.5) 37 (1.8)
--------------------------------------------------------------------------------------------------------------------------------------------------------
List of Subjects in 20 CFR Part 655
Administrative practice and procedure, Employment, Employment and
training, Enforcement, Foreign workers, Forest and forest products,
Fraud, Health professions, Immigration, Labor, Passports and visas,
Penalties, Reporting and recordkeeping requirements, Unemployment,
Wages, Working conditions.
For the reasons stated in the preamble, the DOL amends 20 CFR part
655 as follows:
PART 655--TEMPORARY EMPLOYMENT OF FOREIGN WORKERS IN THE UNITED
STATES
0
1. The authority citation for part 655 continues to read as follows:
Authority: Section 655.0 issued under 8 U.S.C.
1101(a)(15)(E)(iii), 1101(a)(15)(H)(i) and (ii), 8 U.S.C.
1103(a)(6), 1182(m), (n), (p), and (t), 1184(c), (g), and (j), 1188,
and 1288(c) and (d); sec. 3(c)(1), Pub. L. 101-238, 103 Stat. 2099,
2102 (8 U.S.C. 1182 note); sec. 221(a), Pub. L. 101-649, 104 Stat.
4978, 5027 (8 U.S.C. 1184 note); sec. 303(a)(8), Pub. L. 102-232,
105 Stat. 1733, 1748 (8 U.S.C. 1101 note); sec. 323(c), Pub. L. 103-
206, 107 Stat. 2428; sec. 412(e), Pub. L. 105-277, 112 Stat. 2681 (8
U.S.C. 1182 note); sec. 2(d), Pub. L. 106-95, 113 Stat. 1312, 1316
(8 U.S.C. 1182 note); 29 U.S.C. 49k; Pub. L. 107-296, 116 Stat.
2135, as amended; Pub. L. 109-423, 120 Stat. 2900; 8 CFR
214.2(h)(4)(i); and 8 CFR 214.2(h)(6)(iii); and sec. 6, Pub. L. 115-
218, 132 Stat. 1547 (48 U.S.C. 1806).
Subpart A issued under 8 CFR 214.2(h).
Subpart B issued under 8 U.S.C. 1101(a)(15)(H)(ii)(a), 1184(c),
and 1188; and 8 CFR 214.2(h).
Subpart E issued under 48 U.S.C. 1806.
Subparts F and G issued under 8 U.S.C. 1288(c) and (d); sec.
323(c), Pub. L. 103-206, 107 Stat. 2428; and 28 U.S.C. 2461 note,
Pub. L. 114-74 at section 701.
Subparts H and I issued under 8 U.S.C. 1101(a)(15)(H)(i)(b) and
(b)(1), 1182(n), (p), and (t), and 1184(g) and (j); sec. 303(a)(8),
Pub. L. 102-232, 105 Stat. 1733, 1748 (8 U.S.C. 1101 note); sec.
412(e), Pub. L. 105-277, 112 Stat. 2681; 8 CFR 214.2(h); and 28
U.S.C. 2461 note, Pub. L. 114-74 at section 701.
Subparts L and M issued under 8 U.S.C. 1101(a)(15)(H)(i)(c) and
1182(m); sec. 2(d), Pub. L. 106-95, 113 Stat. 1312, 1316 (8 U.S.C.
1182 note); Pub. L. 109-423, 120 Stat. 2900; and 8 CFR 214.2(h).
Subpart B--Labor Certification Process for Temporary Agricultural
Employment in the United States (H-2A Workers)
0
2. Amend Sec. 655.103(b) by revising the definition of ``Adverse
effect wage rate (AEWR)'' to read as follows:
Sec. 655.103 Overview of this subpart and definition of terms.
* * * * *
(b) * * *
Adverse effect wage rate (AEWR). The wage rate published by the
OFLC Administrator in the Federal Register for non-range occupations as
set forth in Sec. 655.120(b) and range occupations as set forth in
Sec. 655.211(c).
* * * * *
0
3. Amend Sec. 655.120 by adding paragraph (b)(1), revising paragraph
(b)(2), and adding paragraph (b)(5) to read as follows:
Sec. 655.120 Offered wage rate.
* * * * *
(b) * * *
(1) Except for occupations governed by the procedures in Sec. Sec.
655.200 through 655.235, the OFLC Administrator will determine the
AEWRs as follows:
(i) For occupations included in the Department of Agriculture's
(USDA) Farm Labor Survey (FLS) field and livestock workers (combined)
category:
(A) If an annual average hourly gross wage in the State or region
is reported by the FLS, that wage shall be the AEWR for the State; or
(B) If an annual average hourly gross wage in the State or region
is not reported by the FLS, the AEWR for the occupations shall be the
statewide annual average hourly gross wage in the State as reported by
the Occupational Employment and Wage Statistics (OEWS) survey; or
(C) If a statewide annual average hourly gross wage in the State is
not reported by the OEWS survey, the AEWR for the occupations shall be
the national annual average hourly gross wage as reported by the OEWS
survey.
(ii) For all other occupations:
(A) The AEWR for each occupation shall be the statewide annual
average hourly gross wage for that occupation in the State as reported
by the OEWS survey; or
(B) If a statewide annual average hourly gross wage in the State is
not reported by the OEWS survey, the AEWR for each occupation shall be
the national annual average hourly gross wage for that occupation as
reported by the OEWS survey.
[[Page 12802]]
(iii) The AEWR methodologies described in paragraphs (b)(1)(i) and
(ii) of this section shall apply to all job orders submitted, as set
forth in Sec. 655.121, on or after March 30, 2023, including job
orders filed concurrently with an Application for Temporary Employment
Certification to the NPC for emergency situations under Sec. 655.134.
For purposes of paragraphs (b)(1)(i) and (ii) of this section, the term
State and statewide include the 50 States, the District of Columbia,
Guam, Puerto Rico, and the U.S. Virgin Islands.
(2) The OFLC Administrator will publish a notice in the Federal
Register, at least once in each calendar year, on a date to be
determined by the OFLC Administrator, establishing each AEWR.
* * * * *
(5) If the job duties on the job order cannot be encompassed within
a single occupational classification, the applicable AEWR shall be the
highest AEWR for all applicable occupations.
* * * * *
Brent Parton,
Acting Assistant Secretary for Employment and Training, Labor.
[FR Doc. 2023-03756 Filed 2-27-23; 8:45 am]
BILLING CODE 4510-FP-P