Adverse Effect Wage Rate Methodology for the Temporary Employment of H-2A Nonimmigrants in Non-Range Occupations in the United States
| Citation | 86 FR 68174 |
| Record Number | 2021-25803 |
| Published date | 01 December 2021 |
| Court | Employment And Training Administration,Labor Department |
Federal Register, Volume 86 Issue 228 (Wednesday, December 1, 2021)
[Federal Register Volume 86, Number 228 (Wednesday, December 1, 2021)]
[Proposed Rules]
[Pages 68174-68200]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-25803]
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DEPARTMENT OF LABOR
Employment and Training Administration
20 CFR Part 655
[DOL Docket No. ETA-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: Notice of proposed rulemaking.
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SUMMARY: The Department of Labor (Department or DOL) is proposing to
amend 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
proposes to revise the methodology by which it determines the hourly
Adverse Effect Wage Rates
[[Page 68175]]
(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 Survey (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 six occupations comprising the field and livestock
worker (combined) wages reported by USDA, the proposed regulations will
rely on the FLS to establish the AEWRs for these occupations in
accordance with the methodology used by the Department for nearly all
of the last 30 years. For all other occupations and to address
circumstances in which the FLS does not report wage data for the field
and livestock worker occupations, the Department proposes to use the
OEWS survey to establish the AEWRs for each occupation. These proposed
regulations 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 the
proposed methodology will strike a reasonable balance between the
statute's competing 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.
DATES: Interested persons are invited to submit written comments on the
proposed rule on or before January 31, 2022.
ADDRESSES: You may submit comments electronically by the following
method:
Federal eRulemaking Portal: https://www.regulations.gov. Follow the
instructions on the website for submitting comments.
Instructions: Include the agency's name and docket number ETA-2021-
0006 in your comments. All comments received will become a matter of
public record and will be posted without change to https://www.regulations.gov. Please do not include any personally identifiable
or confidential business information you do not want publicly
disclosed.
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:
I. Background
A. Statutory and Regulatory Framework
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 temporary or a 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 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'' 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 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\
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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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Since 1987, the Department has operated the H-2A temporary labor
certification program under regulations 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.
An employer seeking H-2A workers generally initiates the temporary
labor certification process by filing an H-2A Agricultural Clearance
Order, Form ETA-790/790A (job order), with the State Workforce Agency
(SWA) in the area where it seeks to employ H-2A workers.\4\ In
preparing the job order and to comply with its wage obligations under
20 CFR 655.122(l), the employer is required 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.\5\
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\4\ 20 CFR 655.121.
\5\ 20 CFR 655.120(a).
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With the exception of brief periods under the 2008 Final Rule \6\
and 2020 AEWR Final Rule,\7\ discussed in more detail below, the
Department has established an AEWR using FLS data for each State in the
multistate or single-State crop region to which the State belongs since
1987.\8\ Currently, pursuant to the 2010 Final Rule,\9\ 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 National
Agricultural
[[Page 68176]]
Statistics Service (NASS).\10\ The current methodology produces a
single AEWR for all agricultural workers in a given State or region,
without regard to occupational classification, and no AEWR in
geographic areas not surveyed by NASS (e.g., Alaska). At the time of
submitting the job order, the employer must agree to pay at least 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 that rate to workers for every hour or portion thereof
worked during a pay period.\11\
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\6\ Final Rule, Temporary Agricultural Employment of H-2A Aliens
in the United States; Modernizing the Labor Certification Process
and Enforcement, 73 FR 77110 (Dec. 18, 2008) (2008 Final Rule).
\7\ As discussed in subsequent sections of this preamble, a
federal court in United Farm Workers v. Dept of Labor, No. 20-cv-
01690 (E.D. Cal. Dec. 23, 2020), enjoined the Department from
further implementing the 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 (Nov. 5,
2020) (2020 AEWR Final Rule) two days after its effective date of
December 21, 2020.
\8\ The FLS collects data for workers directly hired by U.S.
farms and ranches in each of 15 multistate labor regions, and the
single-State regions of California, Florida, and Hawaii. The FLS
does not collect data in other locations, for example, Alaska and
Puerto Rico, where an employer may seek to employ H-2A workers.
\9\ As discussed more fully below, the Department has utilized
the methodology set forth in the 2010 Final Rule since March 15,
2010, except for the two-day period of December 21-22, 2020.
\10\ Final Rule, Temporary Agricultural Employment of H-2A
Aliens in the United States, 75 FR 6883 (Feb. 12, 2010) (2010 Final
Rule); Interim Final Rule, Labor Certification Process for the
Temporary Employment of Aliens in Agriculture and Logging in the
United States, 52 FR 20496 (Jun. 1, 1987) (1987 IFR).
\11\ 20 CFR 655.120(l).
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B. The Role of AEWRs in the H-2A Program
As explained in prior rulemakings, requiring employers to pay the
AEWR when it is the highest applicable wage is the primary way the
Department meets its statutory obligation to certify no adverse effect
on workers in the United States similarly employed. 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. Specifically, the AEWR is intended to guard against the
potential for the entry of H-2A foreign workers to adversely affect the
wages and working conditions of agricultural workers in the United
States similarly employed. As the Department noted shortly after the
creation of the modern H-2A program, a ``basic Congressional premise
for temporary foreign worker programs . . . is that the unregulated use
of [nonimmigrant foreign workers] in agriculture would have an adverse
impact on the wages of U.S. workers, absent protection.'' \12\ The
potential for the employment of foreign workers to adversely affect the
wages of U.S. 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 employers'' access to a potentially
unlimited number of foreign workers in a particular labor market and
crop activity or agricultural activity could cause the prevailing wage
of workers in the United States similarly employed to stagnate or
decrease. The Department continues to believe that the use of an AEWR
is necessary in order to effectuate its statutory mandate of protecting
agricultural workers in the United States similarly employed from the
possibility of adverse effects on their wages and working conditions.
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\12\ Interim Final Rule, Labor Certification Process for the
Temporary Employment of Aliens in Agriculture and Logging in the
United States, 52 FR 20496, 20505 (Jun. 1, 1987).
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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 . . . with few alternatives in the non-farm labor
market.'' \13\ As a result, ``their ability to negotiate wages and
working conditions with farm operators or agriculture service employers
is quite limited.'' \14\ 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.'' \15\
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\13\ Proposed Rule, Temporary Agricultural Employment of H-2A
Aliens in the United States, 74 FR 45905, 45911 (Sep. 4, 2009).
\14\ Id.
\15\ Id.
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The use of an AEWR, separate from a prevailing wage for a
particular crop or agricultural activity, ``is most relevant in cases
in which the local prevailing wage is lower than the wage considered
over a larger geographic area (within which the movement of domestic
labor is feasible) or over a broader occupation/crop/activity
definition (within which reasonably ready transfer of skills is
feasible).'' \16\ The AEWR acts as ``a prevailing wage concept defined
over a broader geographic or occupational field.'' \17\ The AEWR is
generally based on data collected in a multistate agricultural region
and an occupation broader than a particular crop activity or
agricultural activity, while the prevailing wage is commonly determined
based on a particular crop activity or agricultural activity at the
State or sub-State level. Therefore, the AEWR protects against
localized wage depression that might occur in prevailing wage rates.
The AEWR is complemented by the prevailing wage determination process,
which serves a related, but distinct purpose. The prevailing wage, as
determined under current Departmental guidance, provides an additional
safeguard against wage depression that could arise in the performance
of specific crop or agricultural activities within a regional or local
geographic area.
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\16\ 75 FR 6883, 6892-6893.
\17\ Id. at 6893.
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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.'' \18\ Thus, the Department
has discretion to determine the methodological approach that best
allows it to meet its statutory mandate.\19\ 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.'' \20\
There is no statutory requirement that the Department set the AEWR at
the highest conceivable point, nor at the lowest, so long as it serves
its purpose. The Department may also consider factors relating to the
sound administration of the H-2A program in deciding how to set the
AEWR. For the reasons discussed below, the Department is proposing an
approach that is reasonable and strikes an appropriate balance under
the INA.
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\18\ AFL-CIO, et al. v. Dole, 923 F.2d 182, 184 (D.C. Cir.
1991).
\19\ United Farmworkers v. Solis, 697 F. Supp. 2d 5, 8-11
(D.D.C. 2010).
\20\ Dole, 923 F.2d at 187.
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C. Recent Rulemaking
As part of a comprehensive H-2A program notice of proposed
rulemaking (2019 NPRM) published on July 26, 2019, the Department
proposed to adjust the methodology used to establish the AEWRs in the
H-2A program. That approach would have provided occupation-specific
hourly AEWRs for non-range occupations \21\ (i.e., all occupations
other than herding and production of livestock on the range) in each
State using data reported by FLS for the occupation, if available, or
data reported by the OES (now OEWS) survey for the occupation in the
State,
[[Page 68177]]
if FLS data was not available.\22\ The Department explained that
establishing AEWRs based on data more specific to the agricultural
services or labor being performed under the Standard Occupational
Classification (SOC) system would better protect against adverse effect
on the wages of workers in the United States similarly employed. For
example, the Department expressed concern that the AEWR methodology
under the 2010 Final Rule may have an adverse effect on the wages of
workers in higher paid non-range occupations, such as supervisors of
farmworkers and construction laborers, whose wages may be
inappropriately lowered by use of a single hourly AEWR based on the
wages collected for occupations covering field and livestock
workers.\23\
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\21\ Range occupations are subject to a monthly AEWR, as set
forth in 20 CFR 655.211(c).
\22\ See Proposed Rule, Temporary Agricultural Employment of H-
2A Nonimmigrants in the United States, 84 FR 36168, 36171 (July 26,
2019) (2019 NPRM).
\23\ Id. at 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 the Department received comments both in support of
and in opposition to the proposed changes to establish occupation-
specific hourly AEWRs for non-range occupations. A detailed discussion
of the public comments as well as further background on the 2019 NPRM,
specifically related to the hourly AEWR determinations, is available in
the Department's 2020 AEWR Final Rule and will not be restated
here.\24\
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\24\ See 85 FR 70445, 70447-70465.
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On September 30, 2020, USDA publicly announced its intent to cancel
the planned October data collection and November publication of the
Agricultural Labor Survey (ALS) and Farm Labor reports (better known as
the FLS).\25\ The 2020 AEWR Final Rule revised the AEWR methodology to
account for public comments received on the 2019 NPRM proposals and the
USDA announcement that NASS did not plan to release its November 2020
report containing the annual gross hourly wage rates for field and
livestock workers (combined), which was necessary for the Department to
establish and publish the hourly AEWRs for the next calendar year
period on or before December 31, 2020, under the existing 2010 Final
Rule methodology. 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 the USDA decision
to cancel the October data collection and release of the report planned
for November 2020 was the subject of ongoing litigation.\26\ Given the
uncertainty regarding the future of the FLS and to ensure AEWRs for
each State were published before the end of calendar year 2020, the
Department published the 2020 AEWR Final Rule on November 5, 2020, with
an effective date of December 21, 2020.
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\25\ 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.
\26\ 85 FR 70445, 70446.
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The 2020 AEWR Final Rule set the 2021 AEWR for field and livestock
worker occupations at the 2020 AEWR rates, which were based on results
from the FLS wage survey published in November 2019, and provided for
those AEWRs to adjust annually, starting at the beginning of calendar
year 2023, using the BLS Economic Cost Index (ECI), Wages and Salaries.
For all other occupations, 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 occupation reported by the OEWS
survey or, where a statewide average hourly gross wage is not reported,
the national average hourly gross wage for the occupation reported by
the OEWS survey, to be adjusted annually based on the OEWS survey.
D. Need for New Rulemaking
On October 28, 2020, the U.S. District Court for the Eastern
District of California in United Farm Workers, et al. v. Perdue, et
al., No. 20-cv-01452 (E.D. Cal. filed Oct. 13, 2020), preliminarily
enjoined USDA from giving effect to its decision to suspend the October
2020 FLS data collection and cancel its November 2020 publication of
the FLS.\27\ Additionally, on December 23, 2020, in United Farm Workers
v. Dep't of Labor, No. 20-cv-01690 (E.D. Cal. filed Nov. 30, 2020), the
same court issued an order enjoining the Department from further
implementing the 2020 AEWR Final Rule.\28\ On January 12, 2021, the
court issued a supplemental order 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.\29\ After NASS
completed its data collection, USDA published the FLS report on
February 11, 2021.\30\ Shortly thereafter, the Department published the
2021 AEWRs on February 23, 2021, with an immediate effective date,
pursuant to the court's January 12, 2021 supplemental order.\31\
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\27\ United Farm Workers v. Perdue, 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 inunction).
\28\ Order Granting Plaintiffs'' Motion for a Preliminary
Injunction, United Farm Workers, et al. v. U.S. Dep't of Labor, et
al., No. 20-cv-1690 (E.D. Cal.), ECF No. 37.
\29\ 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.
\30\ 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).
\31\ 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 the litigation challenging the Department's 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.\32\ However, the court
ultimately granted the plaintiffs'' Motion for Preliminary Injunction,
concluding that the plaintiffs were likely to succeed on their claim
that the Department failed to justify freezing wages for two years
prior to indexing wages using the ECI.\33\ According to the court,
while the Department recognized ``the importance of the AEWR reflecting
the market rate'' throughout the 2020 AEWR Final Rule,\34\ it failed to
adequately explain a departure from its longstanding use of the FLS to
set AEWRs for field and livestock workers ``to ensure that U.S.
`workers receive the greatest potential protection from adverse effects
on their wages and working conditions, including the adverse effect of
being denied access to the opportunity to earn a higher equilibrium
wage that would have resulted as the market (perhaps slowly) adjusted
in the absence of the
[[Page 68178]]
guest workers.' '' \35\ The court rejected the Department's explanation
that the new AEWR methodology, as applied to the field and livestock
workers, was justified, at least in part, by continued uncertainty
about the long-term availability of the FLS, as demonstrated by USDA's
decision to suspend the October 2020 data collection. The court
determined ``the USDA's FLS Suspension Notice should not factor into
this equation, at least with regard to setting the 2021 AEWRs, because
the [court] enjoined that decision and [new] FLS data should therefore
be available in a timely fashion.'' \36\ Accordingly, the court ruled
that ``[d]espite claiming that it concluded `on balance' that use of
the FLS was `not appropriate in this context,' the [Department] has not
in fact addressed the impact that freezing'' wages would have on field
and livestock workers.\37\
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\32\ Order Granting Plaintiffs'' Motion for a Preliminary
Injunction, United Farm Workers, et al. v. U.S. Dep't of Labor, et
al., No. 20-cv-1690 (E.D. Cal.), ECF No. 37 at 17 n.5.
\33\ Id. at 17.
\34\ Id.
\35\ Id. at 18 (quoting 85 FR 70445, 70453) (``However, the
closest that the Final Rule gets to addressing the intentional
departure from accurate market wages is its statement that `even if
more recent, 2020 FLS wage data were available, relying on it to set
2021 AEWR[s] would only serve to perpetuate the very wage volatility
that the Department seeks to ameliorate through this rule.' '').
\36\ Id.
\37\ Id. (internal citations omitted).
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As the court noted, the Department has previously stated that the
FLS ``is the only annually available data source that actually uses
information sourced directly from [farm employers],'' and its ``broader
geographic scope makes the FLS more consistent with both the nature of
agricultural employment and the statutory intent of the H-2A program.''
\38\ Given that USDA has resumed FLS data collection,\39\ and plans to
release the next annual data in November 2021,\40\ and given the
Department's longstanding reliance on the FLS to establish the AEWR,
the Department has decided it is appropriate to reassess its decision
to no longer rely on annual FLS data for the vast majority of H-2A job
opportunities.
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\38\ Id. at *4.
\39\ USDA NASS, Farm Labor report, https://usda.library.cornell.edu/concern/publications/x920fw89s?locale=en
(last modified May 26, 2021).
\40\ Id.
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Additionally, while the 2020 AEWR Final Rule would have led to
higher wages for certain higher skilled workers, the rule also
acknowledged that the revised methodology ``may result in the AEWRs for
field workers and livestock workers being set at slightly lower levels
in future years than would be the case under the [2010 Rule's]
methodology.'' \41\ The court's order found that, given the
Department's statutory mandate to prevent adverse effects, it was
likely that plaintiffs would succeed on their claim that the 2020 AEWR
Final Rule failed to provide adequate justification for a methodology
that could lead to lower wages for field and livestock workers than the
wages that would have be produced under the 2010 methodology.\42\
Although nominal wages for field and livestock were expected not to
decline under the 2020 methodology, the Department acknowledged that
the 2021 AEWRs, set pursuant to the 2010 methodology and the FLS
published in February 2021, will result in higher wages for the
majority of H-2A workers in 2021. Consistent with the court's decision,
the Department believes adjustment of the methodology used to establish
the required wage rate for the H-2A program will better enable the
Department to meet its statutory obligation regarding adverse effect.
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\41\ Id. at *14.
\42\ Id. at *14-15, 18.
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The Department has also reviewed the policy underlying the 2020
AEWR Final Rule in light of its statutory mandate, and has determined
that two major aspects of the 2020 AEWR Final Rule do not adequately
protect against adverse impact: (1) The imposition of a 2-year wage
freeze for field and livestock workers at a wage level based on the FLS
survey published in November 2019, and (2) the use of the BLS ECI,
Wages and Salaries, to annually adjust AEWRs for field and livestock
workers annually thereafter. These policy decisions represent a
significant departure from how minimum or prevailing wage
determinations are issued to employers in other employment-based visa
programs administered by the Department, and from how the Department
has established the AEWR in the H-2A program for more than 30 years.
The Department considers actual, current wage data to be the best
source of information for determining prevailing wages, when an
appropriate data source is available, and has consistently relied upon
such information in determining minimum or prevailing wages in the
other employment-based visa programs it administers. Using a
methodology other than actual, current wage data increases the
likelihood of permitting employers to pay wages that are not reflective
of market wages, which undermines the Department's mandate to prevent
an adverse effect on the wages of workers in the United States
similarly employed.
However, as discussed above, the Department remains concerned that
the use of a single AEWR for all workers in the H-2A program may
adversely affect wages in certain occupations. Therefore, the
Department proposes utilizing the bifurcated approach set forth in the
2020 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--
occupational classifications for field workers and livestock workers--
while shifting AEWR determinations to the OEWS survey for all other
occupations for which the FLS does not adequately collect or
consistently report wage data at a State or regional level (e.g., truck
drivers, farm supervisors and managers, construction workers, and many
occupations in contract employment). Because these other, typically
higher paid occupations are not reported in the FLS field and livestock
workers (combined) category, an OEWS-based AEWR will better protect
against adverse effect. Additionally, as AEWR determinations become
more occupation specific, the Department also believes it is
appropriate to require that employers pay the highest applicable wage
if the job opportunity can be classified within more than one
occupation to reduce the potential for employers to misclassify workers
and establish greater consistency with prevailing wage determinations
in the H-2B program.
Accordingly, the Department has determined these policies must be
reconsidered and proposes revisions in this notice of proposed
rulemaking (NPRM). The Department has determined that the proposals
outlined below reflect an approach that allows the Department to meet
its statutory mandate to ensure that workers in the United States are
provided an adequate level of wage protection in their employment. The
Department took into account the regulations promulgated in 2010, as
well as the significant revision of the AEWR provisions in the 2020
AEWR Final Rule, in order to arrive at the approach described below.
The Department believes the methodology described below is reasonable
and strikes an appropriate balance under the INA.
II. Proposed Changes to the AEWR Determination Methodology
A. Summary of Proposed Revisions
The Department proposes to use the definition of AEWR found in the
2020 AEWR Final Rule. Because that rule has been preliminarily
enjoined, and there is uncertainty as to whether that rule will be
vacated prior to the issuance of a final rule, the Department seeks
comment on the proposal to define the
[[Page 68179]]
AEWR as set forth in the 2020 AEWR Final Rule.
The 2010 Final Rule defined the 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 U.S. Department of
Agriculture (USDA) based on its quarterly wage survey.'' In the 2019
NPRM, to be consistent with the Department's proposal to adjust the
AEWR methodology for non-range occupations, the Department proposed to
revise the definition of AEWR to include both the FLS and OEWS survey
as sources for determining the AEWR and to reference the new AEWR
methodology provision at Sec. 655.120(b). The revised definition in
the 2020 AEWR Final Rule clarified that the term AEWR applies to both
the hourly rate for non-range occupations, as set forth in Sec.
655.120(b), and to the monthly rate for range occupations, as set forth
in Sec. 655.211(c). Second, rather than identifying particular data
sources, the revised definition stated that the AEWR is the rate that
the OFLC Administrator publishes in the Federal Register in accordance
with the AEWR-setting methodology and procedural provisions at
Sec. Sec. 655.120(b) and 655.211(c). Finally, the Department made
additional nonsubstantive technical revisions to Sec. 655.103(b) in
the 2020 AEWR Final Rule for clarity.
In Sec. 655.120(b), for the vast majority of H-2A job
opportunities represented by six occupations comprising the field and
livestock worker (combined) category within the FLS, the Department
proposes to utilize the AEWR methodology set forth in the 2010 Final
Rule, which set a single AEWR using the annual average gross hourly
wage for field and livestock workers (combined) for the State or
region, as determined by the USDA's NASS FLS report, whenever such data
is available. For this occupational grouping, the Department proposes
to use OEWS wage data in limited circumstances. Specifically, the AEWR
would be set using OEWS wage data in circumstances where FLS wage data
is unavailable or insufficient to generate a State or regional wage
finding. For example, in Alaska and Puerto Rico, where the FLS is not
currently conducted and, accordingly, NASS does not report wage data
for field and livestock workers (combined), the Department proposes
using OEWS wage data to determine the statewide (or statewide
equivalent for the District of Columbia and U.S. territories) \43\ AEWR
for that combination of field and livestock worker occupations, using
statewide data, if available, or nationwide data, if the OEWS survey
does not report a statewide annual average gross hourly wage for those
occupations. Finally, in the event FLS wage data becomes unavailable
for the State or region due to future changes in methodology or the
survey's suspension or termination, the Department proposes to
immediately use OEWS wage data for this occupational grouping to
establish the AEWR.
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\43\ OEWS collects wage date from all fifty states as well as
the District of Columbia, Puerto Rico, Guam, and the Virgin Islands.
See BLS, Occupational Employment and Wage Statistics Overview,
https://www.bls.gov/oes/oes_emp.htm (last modified Mar. 31, 2021)
(``The OEWS survey is a federal-state cooperative program between
[BLS] and State Workforce Agencies (SWAs). BLS provides the
procedures and technical support, draws the sample, and produces the
survey materials, while the SWAs collect the data. SWAs from all
fifty states, plus the District of Columbia, Puerto Rico, Guam, and
the Virgin Islands participate in the survey. Occupational
employment and wage rate estimates at the national level are
produced by BLS using data from the fifty states and the District of
Columbia.'').
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For all other occupations, the Department proposes to use the
methodology previously set forth in the 2020 AEWR Final Rule, under
which the AEWR will be the statewide annual average gross hourly wage
for the occupational classification, as reported by the OEWS survey, or
the national annual average hourly wage for the occupational
classification reported by the OEWS survey, if the OEWS survey does not
report a statewide annual average gross hourly wage for the occupation.
As with the 2020 AEWR Final Rule, the Department proposes to
require that if the job duties on the H-2A application (including the
job order) do not fall within a single occupational classification, and
the occupations involved are subject to different AEWRs, the Department
will determine the applicable AEWR at the highest AEWR for the
applicable occupational classifications.
Also as with the 2020 AEWR Final Rule, the Department proposes to
require that the OFLC Administrator publish, at least once in each
calendar year, on a date to be determined by the OFLC Administrator, an
update to each AEWR via a notice in the Federal Register. The
Department will update the AEWRs through two separate announcements in
the Federal Register, one for the AEWRs based on the FLS, and a second
for the AEWRs based on the OEWS survey, due to the different time
periods for release of these two wage surveys. As discussed below, if a
job opportunity may be classified within more than one occupational
classification or SOC code, making that job opportunity subject to both
FLS- and OEWS-based AEWRs, the employer must pay the highest applicable
wage as of the effective date of that AEWR.
B. The Department Proposes To Use the FLS To Establish the AEWR for
Field and Livestock Worker Job Opportunities in Most Cases
The Department proposes to use the average gross hourly wage rate
for the field and livestock workers (combined) category from the FLS
for the State or region to determine the AEWR for field and livestock
worker job opportunities, when that data is available.
1. Use of a Single Field and Livestock Workers (Combined) Occupational
Category
The FLS field and livestock workers (combined) category encompasses
the vast majority of temporary agricultural job opportunities offered
in the H-2A program. According to NASS, wage data reported for this
category includes workers who ``plant, tend, pack, and harvest field
crops, fruits, vegetables, nursery and greenhouse crops, or other
crops'' or ``tend livestock, milk cows, or care for poultry,''
including those who ``operate farm machinery while engaged in these
activities.'' \44\ The FLS field and livestock worker category reports
aggregate wage data covering the following Standard Occupational
Classification (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). Depending on the agricultural product reported by the
employer, wage data collected under the All Other Agricultural Workers
occupational classification are assigned to either the livestock worker
or field worker major category of the FLS.
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\44\ USDA NASS, Crosswalk from the National Agricultural
Statistics Services (NASS) Farm Labor Survey Occupations to the 2018
Standard Occupational Classification System, https://www.nass.usda.gov/Surveys/Guide_to_NASS_Surveys/Farm_Labor/farm-labor-soc-crosswalk (last visited Aug. 19, 2021).
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Determining AEWRs using a single gross hourly wage for this group
of occupations, rather than occupation-specific AEWRs for each
occupation encompassed in the field and livestock worker (combined)
category, is consistent with the Department's conclusion in the 2010
Final Rule that
[[Page 68180]]
the skills of many farm laborers are ``adaptable across a relatively
wide range of crop or livestock activities and occupations'' because
these activities and occupations ``involve skills that are readily
learned in a very short time on the job, skills peak quickly, rather
than increasing with long-term experience, and skills related to one
crop or activity are readily transferred to other crops or
activities.'' \45\ It also is consistent with the approach taken in the
2020 AEWR Final Rule in response to the significant number of comments
\46\ opposing the Department's proposal in the 2019 NPRM to use an
occupation-specific AEWR for occupations in this category, using the
FLS where available, and using the OEWS survey where the FLS does not
report a wage for the occupation in the State or region.\47\ In the
2020 AEWR Final Rule, the Department retained use of the FLS field and
livestock workers (combined) category to determine the AEWR applicable
to all field and livestock worker job opportunities in each State,
rather than occupation-specific AEWRs for occupations encompassed by
the FLS field and livestock workers (combined) category.
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\45\ 75 FR 6883, 6899-6900.
\46\ See 85 FR 70445, 70451-70458 (Addressing comments that
occupation-specific field and livestock worker wages would reduce
wages in common occupations, increase complexity and
unpredictability, increase employer recordkeeping burdens and the
Department's administrative burden, and create artificial boundaries
between similar occupations.).
\47\ The Department explained in that NPRM that it could use the
FLS to establish an occupation-specific AEWR for many States and
regions for SOCs 45-2092 (Farmworkers and Laborers, Crop, Nursery,
and Greenhouse) and 45-2093 (Farmworkers, Farm, Ranch, and
Aquacultural Animals), but an FLS-based AEWR could only be
established in some States and regions for several other
occupations, including SOCs 45-2041 (Graders and Sorters,
Agricultural Products), 45-2091 (Agricultural Equipment Operators),
45-2099 (Agricultural Workers, All Other), 53-7064 (Packers and
Packagers, Hand), 11-9013 (Farmers, Ranchers and Other Agricultural
Managers), and 45-1011 (First-Line Supervisors of Farm Workers)
based on NASS data. 84 FR at 36182.
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The Department proposes to continue using a single gross hourly
AEWR applicable to all H-2A job opportunities covered by the
occupations in the field and livestock category (combined) in each
State, because this approach strikes a reasonable balance between the
interests of employers and workers and ensures employment of foreign
workers in the vast majority of H-2A job opportunities will not
adversely affect agricultural workers in the United States similarly
employed. Continuing to use this approach will provide continuity and a
reasonable level of predictability and flexibility for employers using
the H-2A program while reducing the complexities and business impacts
associated with greater occupation-specific determinations, including
combination of occupation determinations, on the AEWR applicable to an
employer's job opportunity in the vast majority of cases. This approach
also provides continuity and a reasonable level of predictability and
protection to workers who may move between the occupations in the field
and livestock category (combined). In addition, as each of the field
and livestock occupations encompass a broad variety of duties,
resulting in areas of overlap between the occupations, a worker's
duties within a single workday may fall under multiple field and
livestock occupations. The proposed approach helps both employers and
workers by simplifying the process each uses to ensure that work is
correctly compensated. Use of a single AEWR in each State applicable to
this occupational grouping will minimize recordkeeping burdens,
especially in cases where workers are needed to perform a variety of
field and livestock duties, as employers will be required to pay such
workers the same wage rate for all of those duties.
2. Use of FLS Data for Field and Livestock Workers (Combined)
The Department proposes to use the FLS field and livestock worker
(combined) wage data as the primary source for determining the AEWRs
for this grouping of six occupations for several reasons. As noted in
prior rulemaking, the FLS is the best available information for
determining the AEWRs because it is the only wage survey that collects
data from farm and ranch employers.\48\ Since 1987, the Department
primarily has established an AEWR using the FLS for each State in the
multistate or single-State crop region to which the State belongs. 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, whenever such data is available.
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\48\ See, e.g., 84 FR 36168, 36180-36182. USDA NASS provides
additional information about the procedures used to collect,
analyze, estimate, and disseminate the Farm Labor Survey at https://www.nass.usda.gov/Publications/Methodology_and_Data_Quality/Farm_Labor.
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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 field and livestock
workers (combined) in each State or region surveyed, making it a
reliable source of wage data year to year. As explained in the 2019
NPRM, the geographic scope of the FLS, covering California, Florida,
and Hawaii, and 15 multistate 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.'' \49\ 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 employment of many
farmworkers over a large region and Congress's recognition of ``this
unique characteristic of the agricultural labor market with its
statutory requirement that employers recruit for labor in multistate
regions as part of their labor market before receiving a labor
certification . . . .'' \50\ As the Department noted in the 2010 Final
Rule, ``[b]y providing a prevailing wage defined over a broader
geographic area and over a broader occupational span (all field and
livestock workers, rather than a narrow crop or job description), use
of the FLS provides a check on the expansion of [the employment of]
foreign labor . . . to prevent undermining job opportunities and wages
for domestic farm workers'' and ``reflects the view that farm labor is
mobile across relatively wide areas.'' \51\ 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.'' \52\
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\49\ 84 FR 36168, 36182.
\50\ 75 FR 6883, 6899.
\51\ Id.
\52\ Id.
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3. Use of OEWS Data for Field and Livestock Workers (Combined)
The Department proposes using the OEWS wage data to determine a
statewide AEWR for field and livestock workers in the event the FLS
cannot report wages to establish a statewide AEWR for the field and
livestock workers (combined) category. By using the FLS report as the
sole source for establishing AEWRs under the 2010 final rule's
methodology, the Department cannot establish an AEWR in all geographic
locations where employers may seek to employ H-2A workers (e.g., Alaska
or Puerto Rico) due to limitations in the FLS's methodology and
estimation procedures. In addition, as it has previously noted, the
[[Page 68181]]
Department does not have direct control over the FLS, and USDA could
elect to terminate the survey at some point in the future. USDA has
announced its intention to suspend the survey on three occasions,
including in 2020,\53\ as noted above, and in 2007 \54\ and 2011 \55\
due to budget constraints. Thus, in order to ensure continuity in
establishing statewide AEWRs, to address situations where the FLS does
not currently report a wage,\56\ to protect against the possibility of
a future decision by USDA to suspend or discontinue collection of the
FLS, and other potential circumstances in which FLS wage data may not
be available to set an AEWR for the State or region at least once
annually, the Department proposes to use a second source of
occupational wage data--the OEWS survey--to determine the statewide
AEWRs for this grouping of occupations in circumstances where FLS does
not report a State or regional wage finding or is otherwise not
available.
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\53\ 85 FR 61719.
\54\ Notice of Intent to Suspend the Agricultural Labor Survey
and Farm Labor Reports, 72 FR 5675 (Feb. 7, 2007).
\55\ Notice of Intent to Suspend the Agricultural Labor Survey
and Farm Labor Reports, 76 FR 28730 (May 18, 2011).
\56\ This situation is rare. The Department's H-2A disclosure
data for FY 2020 includes two applications submitted for job
opportunities in Alaska and two for job opportunities in Puerto
Rico, while disclosure data for FY 2019 includes three for job
opportunities in Alaska and one in Puerto Rico.
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Although the Department generally prefers to establish AEWRs based
on the FLS for this group of occupations for the reasons discussed
above, the OEWS survey would become the best available source of wage
data to establish AEWRs for field and livestock workers (combined) if
the FLS is not available. OEWS survey data is the only other
comprehensive and statistically valid set of wage data collected from
employers engaged in agricultural activities, tailored to geographic
areas and occupations common in the H-2A program, and is most
consistent with the occupation-based wage collection of the FLS. Within
the agricultural sector of the U.S. economy, the OEWS survey collects
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. In addition, 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 in this
grouping of occupations,\57\ so data reported by these types of
establishments represents the best information available for purposes
of establishing the AEWRs where FLS data is unavailable for the
occupation. BLS has the capability of providing a single annual average
gross hourly wage for field and livestock workers (combined), in this
grouping of occupations that mirrors the FLS, at the statewide level
based on the OEWS survey data, which the Department will make
accessible to the public online. Specifically, BLS can leverage its
existing survey standards and estimation procedures to compute
statewide and national average gross hourly wages across this grouping
of occupations based on employer establishments across industries.\58\
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\57\ 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 42.3 percent in
FY 2020 (116,472 positions out of 275,430 total positions).
\58\ An overview of the OEWS survey methodology is available at
https://www.bls.gov/oes/current/oes_tec.htm. A more detailed
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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Finally, to further address potential data gaps, the Department
proposes that in the event neither the FLS nor the OEWS survey report a
statewide annual average hourly gross wage for field and livestock
workers (combined) in a particular State, the District of Columbia, or
U.S. Territory, the AEWR will be the national annual average hourly
gross wage for field and livestock workers (combined) in that State (or
equivalent district/territory), as reported by the OEWS survey. Given
the anticipated scenarios in which such a data gap may occur, the
Department does not propose to use the FLS's national data to establish
the AEWR for field and livestock workers (combined) in the event a
statewide annual average hourly gross wage for those workers in a
particular State is unavailable. Whenever the FLS has published, it
consistently reports annual average hourly gross wage findings for
field and livestock workers (combined) in 15 multistate and three
single-State regions, covering 49 States. The Department anticipates
that a national rate would be needed for field and livestock workers
(combined) in these 49 States only in the unexpected event the FLS is
broadly not available (e.g., due to suspension or termination of the
entire survey). In addition, as discussed above, the FLS does not
survey Alaska and other geographic areas in which employers may seek to
employ H-2A workers. As a result, the FLS' national wage findings do
not include wage data for workers in these geographic areas, whereas
the OEWS survey consistently reports wage data for these geographic
areas. For these reasons, the Department proposes to use the OEWS
survey's national annual average hourly gross wage for field and
livestock workers (combined) as the AEWR, if neither the FLS nor the
OEWS survey report a statewide annual average hourly gross wage for
field and livestock workers (combined) in a particular State.
B. The Department Proposes To Use the OEWS Survey To Establish
Occupation-Specific AEWRs for All Other Job Opportunities
For job opportunities that do not fall within the FLS field and
livestock workers (combined) category, the Department proposes adopting
the OEWS-based, occupation-specific AEWR methodology explained in the
2020 AEWR Final Rule. Under this methodology, the AEWR for all
occupations other than field and livestock workers will be the
statewide annual average hourly wage for the occupational
classification, as reported by the OEWS survey. If the OEWS survey does
not report a statewide annual average hourly wage for the SOC, the AEWR
for that State will be the national annual average hourly wage for the
SOC, as reported by the OEWS survey.
The Department is proposing to utilize the OEWS-based methodology
for these occupations for the reasons explained below and in the 2020
AEWR Final Rule.\59\ In part, while the FLS is the most accurate and
comprehensive wage source to determine the AEWRs for field and
livestock workers, as noted above, the OEWS survey is a more accurate
data source for other agricultural occupations, such as supervisors,
that the FLS does not adequately or consistently survey. In addition,
the OEWS survey includes occupations that are more often contracted-for
services than farmer-employed (e.g., construction, equipment operators
supporting farm production), which makes the OEWS data collection from
farm labor contractors a better data source for determining AEWRs and
protecting against adverse effect for these occupations.
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\59\ 85 FR 70445, 70453, 70458-70459.
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Since 2014, the FLS has collected data by SOC--the same taxonomy
that is
[[Page 68182]]
used for the OEWS survey. However, it does not currently report wage
data by SOC. Instead, the FLS aggregates and reports data in four major
FLS occupational categories: Field workers, livestock workers, field
and livestock workers (combined), and all hired workers. In
collaboration with the Department and the OMB, USDA established and
implemented a crosswalk from the major FLS categories to the SOC
categories.\60\ Although the FLS collects data on the wages of
supervisors, the FLS has not been able to report a statistically valid
wage result for the major FLS category of supervisors.\61\ As a result,
the wages of supervisors are currently only reported in the ``all hired
workers'' category and are not included in the ``field and livestock
workers (combined)'' category that the Department uses to establish the
AEWR. The FLS also collects data on ``other workers,'' \62\ though the
FLS has not been able to report a statistically valid wage result for
this FLS category, and, as a result, wages for ``other workers'' are
reported only in the ``all hired workers'' category and are not
included in the wages reported in the ``field and livestock workers
(combined)'' category. Because the FLS does not consistently report
data in all States or regions for each SOC outside of the field and
livestock workers category, use of the FLS to determine wages for these
occupations would require frequent use of the OEWS survey or another
wage source, varying sources from year to year, and resulting in a much
higher degree of year-to-year variability in the AEWR than if the OEWS
survey is used at the outset for job opportunities not included in the
field and livestock workers (combined) category, and this lack of
variability will provide greater year-over-year certainty to both
workers and employers.
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\60\ See Crosswalk from the National Agricultural Statistics
Service (NASS) Farm Labor Survey (FLS) Occupations to the 2018
Standard Occupational Classification (SOC) System, available at
https://www.nass.usda.gov/Surveys/Guide_to_NASS_Surveys/Farm_Labor/farm-labor-soc-crosswalk (last visited Aug. 19, 2021).
\61\ Included within the major FLS category of supervisors are
Farmers, Ranchers, and Other Agricultural Managers (SOC 11-9013);
and First-Line Supervisors of Farm Workers (SOC 45-1011).
\62\ Included in the ``other workers'' category are Agricultural
Inspectors (SOC 45-2011), Animal Breeders (45-2021), Pest Control
Workers (37-2021), and any other agricultural worker not fitting
into the categories above, including mechanics, shop workers, truck
drivers, accountants, bookkeepers, and office workers who fall
within a variety of SOCs and have a wide variety of job duties.
Contract and custom workers are excluded from the FLS sample
population.
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The OEWS survey is a reliable and comprehensive wage survey that
consistently produces annual average wages for nearly all SOC outside
of the field and livestock workers occupational category. The OEWS
survey is among the largest ongoing statistical survey programs of the
Federal Government, producing wage estimates for over 800 occupations,
and it is used as the primary wage source for prevailing wage
determinations in the H-2B temporary non-agricultural labor
certification program, as well as other nonimmigrant and immigrant
programs. 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
employment in the United States.\63\ Every 6 months, the oldest data
from the 3-year cycle is removed from the sample, and new data is
added. The wages reported in the older data are adjusted by the ECI,
which is a BLS index that measures the change in labor costs for
businesses. The OEWS survey is primarily conducted by mail, with follow
up by phone to nonrespondents or if needed to clarify data.\64\ The
OEWS average \65\ hourly wage reported includes all straight-time,
gross pay, exclusive of premium pay, but including piece rate pay.
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\63\ See BLS, Occupational Employment and Wage Statistics
Frequently Asked Questions, https://www.bls.gov/oes/oes_ques.htm
(last modified Aug. 13, 2021).
\64\ Id.
\65\ 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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Similarly to state or regional FLS-based AEWRs for field and
livestock workers, the use of an OEWS-based statewide AEWR addresses
the Department's concern that the potential for localized wage
depression is more pronounced in the H-2A program than in the H-2B
program due to both the economic position 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.\66\ Thus, a statewide wage is more likely to protect
against wage depression from a large influx of nonimmigrant workers
that is most likely to occur at the local level. In the limited
circumstances in which there is no statewide wage, use of the national
annual average hourly wage reported for the particular SOC will ensure
an AEWR determination can be made each year without the need for any
adjustment method. In addition, and as with the FLS, the OEWS survey
also reports a wage that covers activities above a crop activity level,
which, as discussed above, is where wage depression from an influx of
foreign workers could be most acute.
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\66\ See, e.g., 75 FR 6883, 6895.
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Shifting AEWR determinations to the OEWS survey for those
occupations for which the FLS does not report statistically reliable
wage data at a State or regional level also addresses the Department's
concern that use of the combined field and livestock worker FLS data to
determine the AEWR for all occupations may have an adverse effect on
the wages of workers in higher paid agricultural occupations, including
truck drivers, farm supervisors and managers, construction workers, and
many occupations primarily in contract employment, because OEWS data
will provide an occupation-specific wage that does not include data for
lower wage occupations and because OEWS data includes farm labor
contractor wage data. For example, a worker performing construction
labor on a farm under the H-2A program in Ohio must currently be paid
at least the AEWR of $15.31 per hour because the worker's wage is
determined based on the field and livestock workers (combined) wage,
which reflects neither wages paid to agricultural workers engaged in
duties typically performed by a construction worker nor wages of
workers who perform contract work, which an agricultural construction
laborer in the H-2A program is likely to perform. In contrast, if the
same construction worker performed identical job duties at a location
other than a farm and, therefore, fell under the H-2B program, the
required prevailing wage rate based on OEWS data would be approximately
$22.73 per hour.\67\ This same variance is seen across other non-field
and livestock occupations for which H-2A workers are used. For example,
the OEWS mean wage in Ohio for first-line supervisors (SOC 45-1011) in
2020 was $27.83, in contrast to the AEWR of $15.31. Given the disparity
in wages between the FLS and OEWS survey for these occupations, using
the FLS to establish the AEWR for non-field and livestock occupations
may cause an adverse effect on the wages of workers in the United
States similarly employed, contrary to the Department's statutory
mandate. An OEWS-based AEWR based on an occupational classification
that accounts for significantly different job duties, but remains
broader than a particular crop activity or agricultural
[[Page 68183]]
activity in a local area, will thus not only provide greater
predictability but also better protect workers in the United States in
occupations other than field and livestock occupations.
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\67\ This is the current statewide OEWS wage for the category of
Construction Laborer, SOC 47-2061, in Ohio. Under the H-2B program,
a local wage for that occupation would be used if available.
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C. The Department Proposes To Assign the Highest AEWR for All SOCs
Applicable to Job Opportunities Covering Multiple SOCs
The Department proposes to require that employers pay the highest
applicable wage if the job opportunity can be classified within more
than one occupation, when those occupations are subject to different
AEWRs, as proposed in the 2019 NPRM and adopted in the 2020 AEWR Final
Rule.
This requirement would address scenarios in which the combination
of duties an employer requires involves different AEWRs. The Department
best protects against adverse effect by setting the AEWR applicable to
the job opportunity at the highest of the applicable AEWRs. Under this
proposal, if the job duties on the H-2A application (including the job
order) do not fall within the field and livestock worker (combined)
occupational grouping, the Department will determine the applicable
AEWR based on the highest AEWR for all applicable occupational
classifications. In the event an employer's job opportunity requires
the performance of duties encompassed by two or more distinct
occupational classifications subject to different AEWRs (e.g., a field
and livestock worker (combined) occupation and an SOC occupation not
encompassed in the field and livestock worker (combined) occupational
group, or two SOC occupations both of which are not encompassed in the
field and livestock worker (combined) occupational group), the
Department will assign the highest AEWR among all applicable
occupational classifications to reduce the potential for job
misclassification by the employer and effectuate the purpose of the
AEWR (i.e., prevent adverse effect to the wages of workers in the
United States similarly employed).
The proposal, discussed above, to determine a single statewide AEWR
for all job opportunities in the field and livestock workers (combined)
occupational grouping will minimize use of this provision because a job
opportunity involving a combination of occupations that are all
encompassed within the field and livestock workers (combined) will be
subject to a single AEWR, regardless of which of the particular SOCs
applicable to the field and livestock workers (combined) occupational
category may be involved. For example, a job opportunity involving
duties properly classified under SOC 45-2091 (Agricultural Equipment
Operators) and duties properly classified under SOC 45-2093
(Farmworkers, Farm, Ranch, and Aquacultural Animals) would be subject
only to the field and livestock workers (combined) AEWR and the
provision regarding combination of occupations with different AEWRs
would not be relevant, as a single AEWR applies to the job opportunity.
Under this proposal, the SWA will continue to review job orders--
and SOCs therein--in the first instance and determine the appropriate
SOC code 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 enter the SOC code assigned to the
employer's job opportunity in Section I, Items 4 and 5, of the Form
ETA-790, Agricultural Clearance Order. After the employer files its H-
2A Application for Temporary Employment Certification, the OFLC
Certifying Officer (CO) will review the employer's application and job
order, including SOC coding. The CO may determine a different SOC
coding is necessary, for example, based on additional information
received during processing. The CO evaluates each 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.
In making a determination, the CO compares the duties of the employer's
job opportunity with SOC definitions and tasks that are listed in the
Department's Occupational Information Network (O*NET). Where similar
tasks appear in more than one SOC code (e.g., driving or maintenance
and repair of farm equipment), the CO considers other factual
information in the employer's application and job order. For example,
for job opportunities involving driving duties, the CO will 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 the qualifications and
requirements for the job opportunity in order to determine the most
appropriate SOC code to assign to the employer's job opportunity.
Generally, 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. For example, a job opportunity for workers to solely
perform hand harvesting activities would match with a single
occupation, SOC code 45-2092 (Farmworkers and Laborers, Crop, Nursery,
and Greenhouse), absent factors indicating other SOCs (e.g., a required
machinery repair certification). In the event the job opportunity
cannot be classified within a single SOC, the CO will assign a
combination of occupations--more than one SOC code--to the employer's
job opportunity. As noted above, the Department anticipates that the
majority of H-2A job opportunities will be classifiable in one of the
SOC occupations associated with the FLS field workers and livestock
workers (combined) category, or a combination of those SOCs, since the
H-2A program requires that job opportunities constitute agricultural
labor or services, as defined by the Fair Labor Standards Act and
Internal Revenue Code. Jobs classified within one of these codes or a
combination of these codes will receive the AEWR applicable to field
and livestock workers (combined). If different AEWRs apply to the SOCs,
the CO will use the highest AEWR of the applicable AEWRs.
As explained in the 2020 AEWR Final Rule, a job opportunity
involving driving duties may be properly classified under SOC 45-2091
(Agricultural Equipment Operators), SOC 53-3032 (Heavy and Tractor-
Trailer Truck Drivers), or a combination of the two, depending on the
duties described in the employer's job order. A job opportunity for
workers to drive tractors and other mechanized, electrically powered or
motor-driven equipment on farms to plant, cultivate, and harvest a crop
(including driving tractors in and out of fields carrying bins and
driving forklifts to transfer and stack bins of full product onto
trailers), which requires 12 months of experience operating such
equipment, would be properly classified under SOC 45-2091 and subject
to the field and livestock worker (combined) FLS-based AEWR. In
contrast, a job opportunity for workers to drive semi tractor-trailer
trucks to and from specified destinations within an area of intended
employment (including maneuvering trucks into and out of loading and
unloading positions as well as driving in both on-road (paved) and off-
road conditions), which requires 12 months of experience operating such
equipment and a valid Class A CDL or equivalent, would be properly
classified under SOC 53-3032 and subject to the OEWS-based, occupation-
specific AEWR. In the event an employer seeks
[[Page 68184]]
workers to both drive tractors and other mechanized, electrically
powered or motor-driven equipment on farms and semi tractor-trailer
units, as described above, the employer's job opportunity constitutes a
combination of SOC 45-2091 and SOC 53-3032, subject to either the field
and livestock worker (combined) FLS-based AEWR applicable to SOC 45-
2091 or the OEWS-based, occupation-specific AEWR applicable to SOC 53-
3032, whichever is a higher rate per hour.
As noted in the 2019 NPRM and 2020 AEWR Final Rule, determining the
appropriate occupational classification is an important component of
the Department's decision to move to occupation-specific wages for job
opportunities not classifiable within the field and livestock
(combined) occupational grouping. Use of the highest applicable wage in
these cases reduces the potential for employers to misclassify workers
than if the Department permitted employers to pay different AEWRs for
job duties falling within different occupational classifications on a
single Application for Temporary Employment Certification. This
proposal also reduces an employer's recordkeeping burdens with respect
to wages. Under the proposal, for example, employers who currently file
a single Application for Temporary Employment Certification covering
multiple workers and a wide variety of duties might instead choose to
file separate Applications for Temporary Employment Certification and
limit the duties of the job opportunities in each Application for
Temporary Employment Certification to a single occupational
classification. The employer would then pay a separate wage rate based
on the duties of each job opportunity included in the separate
Applications for Temporary Employment Certification, which reduces the
potential for misclassification and lowers recordkeeping burdens, as
employers would only need to track the highest wage among distinct
occupational classifications, if applicable. This policy is also
consistent with the way the Department determines prevailing wage rates
for jobs that cover multiple SOCs in other employment-based visa
programs.
D. The Department Proposes To Publish FLS-Based AEWRs and OEWS-Based
AEWRs Coinciding With Those Surveys' Publication Schedules
As with the 2020 AEWR Rule, the Department proposes to require that
the OFLC Administrator publish, at least once in each calendar year, on
a date to be determined by the OFLC Administrator, an update to each
AEWR as a notice in the Federal Register. The Department proposes to
make the updated AEWRs effective through two announcements in the
Federal Register, one for the AEWRs based on the FLS (i.e., effective
on or about January 1), and a second for the AEWRs based on the OEWS
survey (i.e., effective on or about July 1), due to the different time
periods for release of these two wage surveys.
The Department anticipates that only one of the two AEWR adjustment
notifications may impact an employer's wage obligations during the work
contract period. Given the Department's proposal to determine the AEWR
for the majority of H-2A job opportunities using the field and
livestock worker (combined) wage reported by FLS, most H-2A
certifications would be subject only to the FLS-based AEWR adjustment
in January. Further, due to the seasonal nature of temporary
agricultural labor or services, many H-2A employment periods begin and
end between FLS-based AEWR adjustments. Only in the circumstance in
which a job opportunity constitutes a combination of occupations that
involves both an FLS-based AEWR and an OEWS-based AEWR would two AEWR
adjustment notices potentially impact an employer's wage obligations.
E. The Department's Decision Not To Use ECI-Adjusted AEWRs
In proposing to annually adjust the AEWRs based on the annual
publication of new FLS and OEWS data, the Department is proposing not
to use the ECI to adjust AEWRs as the 2020 AEWR Final Rule had done,
and is not contemplating use of a similar index for several reasons.
First, the FLS--the Department's preferred wage source for establishing
the AEWR for field and livestock workers--is again available,
eliminating the Department's primary impetus for electing to use the
ECI to adjust AEWRs in future years under the 2020 AEWR Final Rule.
Second, the Department proposes to leverage OEWS survey data for this
group of occupations instead of using of the ECI, as OEWS data is more
consistent with the FLS data category used to set the AEWRs. As noted
above, BLS now will provide the Department wage data for field and
livestock workers (combined), based on the OEWS survey, to determine
the AEWR for these occupations in each State or region where the FLS is
not available or does not report wage data for workers in a particular
geographic area. In those cases where the FLS is not available, the
Department believes that using the OEWS survey rather than the ECI best
allows the Department to prevent adverse effect as required under the
INA because the OEWS survey provides data more specifically tailored to
geographic areas and occupations common in the H-2A program and is more
consistent with the FLS. In particular, though the ECI provides a
stable measure of annual increases in the wages of private sector
workers generally, the ECI does not report the annual change in wages
of field and livestock workers specifically, and does not provide wage
data for agricultural workers in particular geographic areas. Both the
FLS and OEWS survey provide data more specifically tailored to U.S.
agricultural workers and the States and regions where these workers are
employed, making these sources more 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 wage
data from farm labor contractors, who increasingly provide labor or
services to growers both in the predominant field and livestock workers
(combined) occupational group and in occupations that are less common
in the H-2A program.
While the Department remains sensitive to concerns of employers
regarding increases in the FLS-based AEWRs, the Department believes,
for the reasons discussed above, that the approach proposed in this
rulemaking best allows the Department to fulfill its statutory mandate.
The concerns about AEWR increases also appear overstated when
considering long-term historical trends in agricultural worker wages
and the agricultural labor market. Long-term data on growth in the
AEWRs shows that with the exception of the AEWRs for Hawaii, Oregon,
and Washington, growth in the AEWRs from 2010 through 2019 was lower
than growth from 2000 to 2010 and substantially lower in many States.
Considering top user States as examples, the total AEWR increase from
2010 through 2019 compared to 2000 through 2010 was lower in four of
the five top States.\68\
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\68\ 3.95% lower in California, 3.07% lower in Florida, 8.34%
lower in Georgia, 6.07% lower in North Carolina, and 6.07% higher in
Washington, based on an average of annual changes in the AEWR over
the past two decades.
---------------------------------------------------------------------------
Moreover, despite higher-than-average wage increases in some recent
years, farmworkers remain among the lowest paid workers in the United
States. The USDA Economic Research Service (ERS) recently reported that
the gap between farmworker and non-farmworker wages
[[Page 68185]]
is ``slowly shrinking, but still substantial,'' noting that the average
farmworker wage in 1990 ``was just over half the average real wage in
the nonfarm economy for private-sector nonsupervisory occupations,''
but rose to 60% of the non-farmworker wage by 2019, indicating the wage
gap decreased by less than 10% over three decades.\69\ The ERS data
also indicates that labor costs as a share of total gross farm income
has not risen significantly over the past two decades, with the ERS
concluding that ``[a]lthough farm wages are rising in nominal and real
terms, the impact of these rising costs on farmers'' incomes has been
offset by rising productivity and/or output prices,'' and adding that
``labor costs as a share of gross cash income do not show an upward
trend for the industry as a whole over the past 20 years.'' \70\
---------------------------------------------------------------------------
\69\ USDA Economic Research Services, Farm Labor, https://www.ers.usda.gov/topics/farm-economy/farm-labor (last modified Aug.
18, 2021).
\70\ Id. (The ERS found that for all farms, ``labor costs
(including contract labor, and cash fringe benefit costs) averaged
10.4 percent of gross cash income during 2016-18, compared with 10.7
percent for 1996-98.'' At the commodity level, the ERS found that
``[l]abor cost shares have fallen slightly over the past 20 years
for the more labor-intensive fruit and vegetable sectors . . . .'').
---------------------------------------------------------------------------
AEWR increases above historical averages in recent years also are
consistent with a growing agricultural labor shortage that is evidenced
by an exponential increase in use of the H-2A program since 2015, USDA
data, and recurrent statements by employers and associations that it is
increasingly difficult to find U.S. workers for their job
opportunities.\71\ As the Department has explained in prior rulemaking,
basic ``economic theory holds that, under conditions of an emerging
labor shortage . . . [wage] adjustments would occur over time and the
observed wage would increase by an amount sufficient to attract more
workers until supply and demand were met in equilibrium.'' \72\
However, ``labor shortages that would normally drive wages up may
become distorted by the availability of foreign workers . . . .'' \73\
The AEWR methodology in the 2010 Final Rule and the similar FLS-based
methodology proposed here provide a wage floor distinct from the local
prevailing wage and are intended to ``comput[e] an AEWR to approximate
the equilibrium wage that would result absent an influx of temporary
foreign workers . . . serv[ing] to put incumbent farm workers in the
position they would have been in but for the H-2A program.'' \74\
---------------------------------------------------------------------------
\71\ See, e.g., Steven Zhaniser et al., Rising Wages Point to a
Tighter Farm Labor Market in the United States, Amber Waves (Feb 15,
2019), https://www.ers.usda.gov/amber-waves/2019/february/rising-wages-point-to-a-tighter-farm-labor-market-in-the-united-states
(noting that rising real (inflation-adjusted) farm wages in the past
four years is a ``prominent indicator of a tighter farm labor
market'' and that ``greater employment of nonimmigrant, foreign-born
farmworkers through the H-2A'' program is another indicator).
\72\ 75 FR 6883, 6891; see also Final Rule, Wage Methodology for
the Temporary Non-Agricultural Employment H-2B Program, 80 FR 24146,
24159-24160 (Apr. 29, 2015) (noting that ``if employers experience a
shortage of available workers in a particular region or occupation,
compensation should rise as needed to attract workers'').
\73\ 80 FR 24146, 24158-24159.
\74\ 75 FR 6883, 6891.
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III. Request for Comments
The Department invites comments on all aspects of the proposed AEWR
methodology. Because the 2020 AEWR Final Rule has been preliminarily
enjoined, and there is uncertainty as to whether that rule will be
vacated prior to the issuance of a final rule, the Department seeks
comment on all proposals to mirror provisions found in the 2020 rule.
In addition, the Department is interested in comments on the use of the
FLS and OEWS survey and the conditions under which each survey should
be used to establish the AEWR. For example, the Department is
interested in comments on the continued use of a single statewide
hourly AEWR for field and livestock worker occupations (combined),
rather than occupation-specific statewide AEWRs for each occupation
comprising the field and livestock workers (combined) category covered
by the FLS. In addition, the Department is interested in comments on
use of the OEWS survey to establish the AEWR for field and livestock
worker occupations (combined) in the absence of the FLS or where the
FLS does not report a wage finding for these occupations in a
particular geographic area, as well as the use of the OEWS to establish
AEWRs for all job opportunities that do not fall within the FLS field
and livestock workers (combined) category. Commenters may address the
existence or role of the AEWR, but the Department encourages commenters
to focus on the methodology used to determine the AEWR. The 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 reasons explained at length in prior rulemakings,
including in the 2020 AEWR Final Rule and 2010 Final Rule.
IV. Administrative Information
A. Executive Order 12866: Regulatory Planning and Review; and Executive
Order 13563: Improving Regulation and Regulatory Review
Under E.O. 12866, the 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 proposed
rule and has determined that it is a significant--but not economically
significant--regulatory action under E.O. 12866.
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 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.
Outline of the Analysis
Section VI.A.1 describes the need for the proposed rule, and
section VI.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 VI.A.3 explains how the provisions of the proposed
rule will result in quantifiable costs and transfers and presents the
calculations the Department used to estimate them. In addition, section
[[Page 68186]]
VI.A.3 describes the unquantified costs of the proposed rule, a
description of qualitative benefits, and presents an analysis of
distributional impacts of the rule. Section VI.A.4 summarizes the
estimated first-year and 10-year total and annualized costs and
transfers of the proposed rule. Finally, section VI.A.5 describes the
regulatory alternatives that were considered during the development of
the proposed rule.
Summary of the Analysis
The Department estimates that the proposed rule will result in
costs and transfers. As shown in Exhibit 1, the proposed rule is
expected to have an annualized cost of $0.064 million and a total 10-
year quantifiable cost of $0.45 million at a discount rate of 7
percent.\75\ The proposed rule is estimated to result in annual
transfers from H-2A employers to H-2A employees of $30.17 million and
total 10-year transfers of $211.87 million at a discount rate of 7
percent.\76\
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\75\ The proposed rule will have an annualized cost of $0.18
million and a total 10-year cost of $1.54 million at a discount rate
of 3 percent in 2020 dollars.
\76\ The proposed rule will have annualized transfer payments
from H-2A employers to H-2A employees of $29.80 million and a total
10-year transfer payments of $254.20 million at a discount rate of 3
percent in 2020 dollars.
Exhibit 1--Estimated Monetized Costs and Transfers of the Proposed Rule
[2020 $millions]
------------------------------------------------------------------------
Costs Transfers
------------------------------------------------------------------------
Undiscounted 10-Year Total.............. $0.45 $295.00
10-Year Total with a Discount Rate of 3% 0.45 254.20
10-Year Total with a Discount Rate of 7% 0.45 211.87
------------------------------------------------------------------------
10-Year Average......................... 0.45 29.50
Annualized at a Discount Rate of 3%..... 0.53 29.80
Annualized with at a Discount Rate of 7% 0.064 30.17
------------------------------------------------------------------------
The total cost of the proposed 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 VI.A.3 (Subject-by-Subject Analysis) below for a detailed
explanation.
The Department was unable to quantify some costs and benefits of
the proposed rule. The Department describes them qualitatively in
section VI.A.3 (Subject-by-Subject Analysis) and seek input from the
public to help us to reasonably quantify them in the final rule.
1. Need for Regulation
As discussed above, court-issued injunctions prevented USDA from
suspending FLS data collection for calendar year 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 the 2010 Final Rule, the FLS wage data is used to
determine the AEWRs for all H-2A job opportunities. However, the
Department remains concerned that the use of a single AEWR for all job
opportunities in the H-2A program may adversely affect the wages of
workers in the United States similarly employed in certain occupations
where the FLS does not adequately collect or consistently report wage
data at a State or regional level. Therefore, the Department proposes
using 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 occupational
classifications covering field workers and livestock workers--while
shifting AEWR determinations to the OEWS survey for all other
occupations for which the FLS does not adequately collect or
consistently report wage data at a State or regional level (e.g. ,
truck drivers, farm supervisors and managers, construction workers, and
many occupations in contract employment). As AEWR determinations become
more occupation specific, the Department believes it is appropriate to
continue requiring that employers pay the highest applicable wage if
the job opportunity can be classified within more than one occupational
classification to reduce the potential for employers to misclassify
workers and establish greater consistency with prevailing wage
determinations in the H-2B program.
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 proposes revisions in this NPRM
that better meet the statute's twin goals to ensure that employers can
access legal agricultural labor while maintaining an adequate level of
wage protection for workers in the United States similarly employed.
2. Analysis Considerations
The Department estimated the costs and transfers of the proposed
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 has been
preliminarily enjoined by a federal district court, as explained above,
and there is uncertainty as to whether the 2020 AEWR Final Rule rule
will be vacated prior to the issuance of this final rule.
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 proposed rule (i.e., costs and transfers that
accrue to entities affected). The analysis covers 10 years (from 2022
through 2031) to ensure it captures major costs and transfers that
accrue over time. The Department expresses all quantifiable impacts in
2020 dollars and uses discount rates of 3 and 7 percent, pursuant to
Circular A-4.
[[Page 68187]]
Exhibit 2 presents the number of affected entities that are
expected to be impacted by the proposed rule. The average number of
affected entities is calculated using OFLC H-2A labor certification
data from 2016 through 2020. The Department provides this estimate and
uses it to estimate the costs of the proposed rule.
Exhibit 2--Number of Affected Entities by Type
[FY 2016-2020 average]
------------------------------------------------------------------------
Entity type Number
------------------------------------------------------------------------
Annual Unique H-2A Applicants.......................... 8,204
------------------------------------------------------------------------
Growth Rate
The Department estimated growth rates for applications processed
and certified H-2A workers based on fiscal year (FY) 2012-2020 H-2A
program data, presented in Exhibit 3.
Exhibit 3--Historical H-2A Program Data
------------------------------------------------------------------------
Applications Workers
Fiscal year certified 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
------------------------------------------------------------------------
The geometric growth rate for certified H-2A workers using the
program data in Exhibit 3 is calculated as 15.8 percent. This growth
rate, applied to the analysis timeframe of 2022 to 2031, would result
in more H-2A certified workers than projected employment of workers in
the relevant H-2A SOC codes by BLS.\77\ Therefore, to estimate
realistic growth rates for the analysis, the Department applied an
autoregressive integrated moving average (ARIMA) model to the FY 2012-
2020 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.\78\ Multiple models yielded indistinctive measures of
goodness of fit. Therefore, each model was used to project workers and
applications through 2031. 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 3.1
percent for H-2A applications and 5.6 percent for H-2A certified
workers. The estimated growth rates for applications (3.1 percent) and
workers (5.6 percent) were applied to the estimated costs and transfers
of the proposed rule to forecast participation in the H-2A program.
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\77\ Comparing BLS 2029 projections for combined agricultural
workers with a 15.8 percent growth rate of H-2A workers yields
estimated H-2A workers that are about 107 percent greater than BLS
2029 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.
\78\ 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 VI.A.3 (Subject-by-Subject Analysis).
Compensation Rates
In section VI.A.3 (Subject-by-Subject Analysis), the Department
presents the costs, including labor, associated with the implementation
of the provisions of the proposed rule. Exhibit 4 presents the hourly
compensation rates for the occupational categories expected to
experience a change in the number of hours necessary to comply with the
proposed rule. The Department used the mean hourly wage rate for
private sector Human Resources Specialists (SOC code 13-1071).\79\ 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 \80\ 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.\81\ 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.
---------------------------------------------------------------------------
\79\ BLS, May 2020 National Occupational Employment and Wage
Estimates: 13-1071--Human Resources Specialist, https://www.bls.gov/oes/current/oes131071.htm (last modified Mar. 31, 2021).
\80\ 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.
\81\ See Employer Costs for Employee Compensation, https://www.bls.gov/news.release/ecec.toc.htm (last modified Sept. 16,
2021). This shows the ratio of total compensation to wages and
salaries for all private industry workers.
[[Page 68188]]
Exhibit 4--Compensation Rates
[2020 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 $33.38 $14.02 ($33.38 x 0.42) $5.67 ($33.38 x 0.17) $53.08
--------------------------------------------------------------------------------------------------------------------------------------------------------
3. Subject-by-Subject Analysis
The Department's analysis below covers the rule familiarization
costs, unquantifiable costs, transfers, and qualitative benefits of the
proposed 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 proposed rule
includes the cost of rule familiarization and transfers associated with
the AEWR wage structure from the proposed rule. The Department also
described efficiency impacts, payroll and other transition costs, and
the distributional impacts that could result from the proposed rule.
Costs
The following section describes the costs of the proposed rule.
Quantifiable Costs
Rule Familiarization
When the proposed 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 (3.1 percent) to the average number of annual
unique H-2A applicants from FY2016 to FY2020 (8,204) 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 (8,459) was
multiplied by the estimated amount of time required to review the rule
(1 hour).\82\ This number was then multiplied by the hourly
compensation rate of Human Resources Specialists ($53.08 per hour).
This calculation results in a one-time undiscounted cost of $448,973 in
the first year after the proposed rule takes effect. In each subsequent
year new unique employers (2,199) requesting H-2A certifications will
need to review the rule. The growth rate of H-2A applications (3.1
percent) was applied to the number of new unique employer to determine
the annual number of new unique H-2A applicants impacted in the
remaining years of the analysis. This results in an average annual
undiscounted cost of $140,589 in years 2-10 of the analysis. The one-
time and continuing costs yield a total average annual undiscounted
cost of $171,428. The annualized cost over the 10-year period is
$52,633,180,190 and $63,924,192,560 at discount rates of 3 and 7
percent, respectively.
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\82\ This estimate reflects the nature of the proposed 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.
---------------------------------------------------------------------------
Unquantifiable Costs
a. Efficiency Impacts
The proposed wage methodology is designed to achieve the statute's
twin 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 of
perfect competition, if the proposed rule results in a wage floor above
competitive market wages, it will produce some deadweight loss (DWL).
In the case of market power, if the proposed rule reduces 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 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 proposed rule may act as a
wage floor that is above competitive market equilibrium wages for
certain job opportunities whereas in others imperfect competition may
suppress domestic labor markets at quantities below the competitive
market equilibrium.
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, as
well as 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 seeks public comment on
the DWL or other labor market inefficiencies resulting from the
proposed rule. The efficiency impact of the proposed rule is limited
only to the 2 percent of H-2A workers whose wages the proposed rule
will affect, while there would be no change to the DWL for the other 98
percent of H-2A workers.\83\ Therefore, the DWL resulting from the
proposed rule is likely very small. Because the market equilibrium
wages for construction workers, supervisors/managers of farmworkers,
and logging equipment operators are above current baseline AEWRs, the
proposed 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
[[Page 68189]]
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).
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\83\ Under this proposed 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 occupations (45-2041, 45-2091,
45-2092, 45-2093, 53-7064, 45-2099) which comprise 98 percent of H-
2A workers.
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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 below 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 proposed 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 proposed 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 multistate region. Under the proposed rule when the
AEWR is annually adjusted, the DWL may increase when the AEWR covering
the State or multistate region also increases and remains above market
equilibrium. Under the proposed rule this may occur for some, but not
all, occupations covering field and livestock workers where the AEWR is
determined using the annual weighted statewide gross hourly wage based
on the OEWS survey. 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 occupations 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 for a State based on OEWS wage data may
be higher than the baseline AEWR that is based on the FLS and market
equilibrium wage for temporary agricultural employment. Therefore, for
most SOC code and area combinations, the AEWRs under this proposed rule
AEWR, set at the OEWS wage, will serve as a wage floor and may create a
DWL in the labor market, as illustrated by Figure 1.
BILLING CODE 4510-FP-P
[GRAPHIC] [TIFF OMITTED] TP01DE21.000
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
[[Page 68190]]
some combinations of occupations and geographic areas where this can
occur. For example, workers in higher paid occupations and occupations
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 proposed rule the AEWR will be
increased for these occupations to the State-level OEWS.\84\ In
addition, workers in occupations 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
field and livestock worker occupations which may be below market wage
rates for a specific SOC code and geographic area combination.\85\ 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 proposed rule that DWL is reduced because
of the higher AEWR (see Figure).
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\84\ For example, Mobile Heavy Equipment Mechanics, Except
Engine (49-3042, in ME) has a 2021 AEWR of $14.99 and under the
proposed rule would have an OEWS wage of $22.85.
\85\ For example, Agricultural Workers, All Other (45-2099, in
SOC) has a 2021 AEWR of $11.81. If the FLS data was unavailable it
would have a weighted average OEWS wage of $14.18 and the OEWS wage
for that specific occupation is $16.51. Thus, the weighted average
OEWS wage would be below the actual market wage for that occupation.
[GRAPHIC] [TIFF OMITTED] TP01DE21.001
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 68191]]
[GRAPHIC] [TIFF OMITTED] TP01DE21.002
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,
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 to foreign workers from
increasing their wages. Increasing the AEWR under the proposed rule
will extend all these impacts; that is, increase DWL, decrease domestic
employer surplus, and increase domestic worker surplus.
[[Page 68192]]
[GRAPHIC] [TIFF OMITTED] TP01DE21.003
BILLING CODE 4510-FP-C
b. Payroll and Other Transition Costs
The proposed 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 proposed 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 are performed by H-2A workers. The Department is not able
to quantify the transition costs and seeks public input on the
potential transition expenses such as recruitment and training.
Transfers
The following section describes the transfers of the proposed 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.\86\ Therefore, the
Department considers the wage transfers in the analysis as transfer
payments within the global economic system.
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\86\ 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/.
---------------------------------------------------------------------------
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 proposed rule maintains this general wage-
setting structure but proposes to modify 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
region, without regard to occupational classification, 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
[[Page 68193]]
workers in higher paid agricultural occupations, such as supervisors of
farmworkers 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 proposed rule the Department would modify 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 occupations that are less
common in the H-2A program. While the labor demanded from H-2ALCs
(i.e., farm labor contractors) using the H-2A program for employment 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.\87\ 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 of H-2A applications.\88\ 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 date, it also surveys the
agricultural employers which make up a significant majority of H-2A
applications.
---------------------------------------------------------------------------
\87\ Based on an analysis of H-2A labor certification data for
FY 2020, the Department issued 12,491 temporary 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).
\88\ Id.
---------------------------------------------------------------------------
Under this proposed 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) 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 annual gross average hourly wage in the State or region is
not reported by the FLS, the Department proposes to set the annual AEWR
for these occupations (45-2041, 45-2091, 45-2092, 45-2093, 53-7064, 45-
2099) using the statewide gross average hourly wage rate reported by
the OEWS survey. If the annual statewide gross average hourly wage is
not reported by the OEWS survey, the Department proposes to set the
AEWR for these occupations by using the annual national gross average
hourly wage as reported by the OEWS survey. To produce an equivalent
AEWR for field and livestock worker job opportunities using the OEWS
survey under the proposed rule, BLS will compute an annual weighted
average hourly wage using the establishment data reported for these
occupations at the State and national level.
For all other SOC codes the Department proposes to 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 proposes to set the AEWR based on the national/
annual average hourly wage reported by the OEWS survey.
To estimate wage impacts the Department uses FY 2020 through FY
2021 OFLC certification data. To include the most recent H-2A
certification data (i.e., FY 2021) the Department simulated Q4 data
based on FY 2016-2020 data, to produce a full year of certification
data.\89\ For the most common SOC codes (45-2091; 45-2092; and 45-
2093), the Department calculated the average certification growth rate
form FY 2016 to FY 2020 by SOC and State, and then determined the
average annual growth rate. In some cases, due to small numbers of
certifications in certain States for a specific SOC in each year, the
growth rates were unreasonably high or low (greater than 80% or less
than -80% growth). In such cases, the Department applied the national
growth rate for the applicable SOC. Next, the Department calculated the
number of certifications that had work in the fourth quarter of 2020 by
State, and SOC, and applied the applicable growth rate to Q4 to
estimate FY 2021 quarter 4 certifications. For all other SOC codes, the
Department took the average of the number of certifications for each
SOC and State from FY 2016 to FY 2020. The Department also needed to
estimate the period of need, number of workers per certification, and
number of hours per certifications. For the three most common SOC
codes, the Department calculated, by State and SOC code, the number of
certifications that had work in one or two calendar years, and the
average number of days that occurred in each year. For all other SOC
codes, the Department used the national average from FY 2016 to FY 2020
of the percentage of certifications with work in one or two calendar
years, and the number of days in each year. For number of workers per
certifications and number of hours, the average number of workers for
each SOC code and State from FY 2016 to FY 2020 was applied. Total
wages were then calculated using the simulated Q4 certifications and
these estimated FY 2021 Q4 wage impacts were summed with the FY 2021 Q1
to Q3 wage impacts to create an estimate of total wages for the
entirety of FY 2021.
---------------------------------------------------------------------------
\89\ FY 2021 certification data only consists of three quarters
of data as of the date of analysis for this proposed rule.
---------------------------------------------------------------------------
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, 45-2099 occupations at the
State and national level using the OEWS May 2020 survey. The OEWS May
2020
[[Page 68194]]
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 of 2019. To determine the appropriate
weighted average hourly wage for these six occupations between October
of 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 datasets. 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.\90\
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\90\ 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 proposed AEWR methodology. Then,
the Department determined the annual wage impact in calendar year (CY)
2020 and CY 2021 by subtracting the AEWR baseline wage from the NPRM
wage. The Department summed the wage impacts in each CY, converted the
wage impact to 2020 dollars using the Employment Cost Index (ECI) \91\
and took the average impact of CY 2020 and CY 2021.\92\ Wage impacts
for 2022 to 2031 were estimated by applying the H-2A workers growth
rate (5.6 percent) to account for that fact that the number of H-2A
workers affected (and the total wage impact) will grow annually at 5.6
percent. Because the proposed rule wage-setting methodology would not
retroactively impact workers and OEWS wages in the May 2021 OEWS will
not be applicable until July of 2022, the wage impact in 2022 is
divided by 2 to account for the fact that only half the year of wages
would be impacted.\93\
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\91\ BLS, Employment Cost Index Archived News Releases, https://www.bls.gov/bls/news-release/eci.htm (last modified July 30, 2021).
\92\ 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.
\93\ The Department assumes in the economic analysis of the
proposed rule that the final rule will not become effective until
the second half of the year 2022.
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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 proposed rule and
baseline. 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
5, for agricultural equipment operators (SOC 45-2092, Farmworkers and
Laborers, Crop, Nursery, and Greenhouse) the FLS AEWR wage is not
available in Alaska and Puerto Rico, so the AEWR is set by the weighted
average OEWS wage. For SOC codes set by the OEWS survey, 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 5--AEWR Wage Under the Proposed Rule
[Example case]
--------------------------------------------------------------------------------------------------------------------------------------------------------
NPRM Number Number
------------------------- Number of Basic of days of days Wage Wage Total AEWR Total AEWR
SOC code certified number of worked worked 2020 2021 wages 2020 wages 2021
Wage source workers hours in 2020 in 2021
(a) (b) (c) (d) (e) (f) (a*(b/5)*c*e) (a*(b/5)*d*f)
--------------------------------------------------------------------------------------------------------------------------------------------------------
45-2092.................... FLS AEWR (unavailable); 14 40 152 10 $15.15 $16.78 $257,913.60 $18,793.60
weighted average OEWS.
13-1074.................... OEWS................... 10 35 280 50 25.45 29.84 498,820.00 104,440.00
--------------------------------------------------------------------------------------------------------------------------------------------------------
After the total wages for the proposed rule were determined, the
wage calculation under the baseline AEWR was calculated. 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 6 provides
an example of the calculation of the AEWR baseline for the same case as
in Exhibit 5). In the example provided in Exhibit 6 for SOC code 45-
2092, the AEWR baseline wage is not available, so the baseline wage is
set by the public OEWS State wage.
Exhibit 6--AEWR Wage Under the Baseline
[Example case]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number Number
Number of Basic of days of days Wage Wage Total AEWR Total AEWR
SOC code Baseline wage source certified number of worked worked 2020 2021 wages 2020 wages 2021
workers hours in 2020 in 2021
(a) (b) (c) (d) (e) (f) (a*(b/5)*c*e) (a*(b/5)*d*f)
--------------------------------------------------------------------------------------------------------------------------------------------------------
45-2092.................... FLS AEWR (unavailable); 14 40 152 10 $15.54 $15.72 $264,552.96 $17,606.40
OEWS State.
13-1074.................... FLS AEWR............... 10 35 280 50 14.58 15.37 285,768.00 53,795.00
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 68195]]
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.\94\ 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 (5.6 percent).\95\ The results are average annual undiscounted
transfers of $29.50 million. The total transfer over the 10-year period
is estimated at $295.00 million undiscounted, or $254.20 million and
$211.87 million at discount rates of 3 and 7 percent, respectively. The
annualized transfer over the 10-year period is $29.80 million and
$30.17 million at discount rates of 3 and 7 percent, respectively.
---------------------------------------------------------------------------
\94\ There is no FLS wage available for Alaska or Puerto Rico.
Because of that, wages under the baseline are set by the public OEWS
State data. Under the proposed 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
proposed rule.
\95\ 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[caret](Current year - Base year)).
---------------------------------------------------------------------------
The estimated transfers are likely on the high end of potential
transfers. The 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, there
were 213,394 H-2A visas issued.\96\ In FY 2020 there were 275,430
workers 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 were filled by U.S. workers.
---------------------------------------------------------------------------
\96\ 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 proposed 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 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. And finally, the Department is also not able to estimate how
much of the wage transfer stays in the U.S. economy. It is likely that
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 U.S., spend the money outside of the U.S.,
send the money outside of the U.S., or some combination. The Department
invites comments regarding how these wage transfer impacts can be
calculated.
Qualitative Benefits
The proposed rule makes an important update to the AEWR to ensure
that it protects U.S. workers in occupations where the existing wage
methodology may adversely affect wages in certain occupations where the
FLS does not adequately collect or consistently report wage data at a
State or regional level (e.g., truck drivers, farm supervisors and
managers, construction workers, and many occupations in contract
employment). U.S. workers in these occupations 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
occupations 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 occupations. The potential for the employment of
foreign workers to adversely affect the wages of U.S. 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.'' \97\ As a result,
``their ability to negotiate wages and working conditions with farm
operators or agriculture service employers is quite limited.'' \98\ 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.'' \99\
---------------------------------------------------------------------------
\97 \ Proposed Rule, Temporary Agricultural Employment of H-2A
Aliens in the United States, 74 FR 45905, 45911 (Sep. 4, 2009).
\98 \ Id.
\99\ Id.
---------------------------------------------------------------------------
[[Page 68196]]
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 Indigenous and Native American persons, Asian
Americans and Pacific Islands, and other persons of color, as well as
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.
To assess the impact of the proposed rule on equity the Department
used Current Population Survey (CPS) data from BLS \100\ 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) is presented in Exhibit 7. These top 10 SOC codes
\101\ account for over 90 percent of all the workers in the FY 2021
certification data that experience wage impacts (certifications with
wages set by the OEWS).
---------------------------------------------------------------------------
\100\ 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).
\101\ 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
--------------------------------------------------------------------------------------------------------------------------------------------------------
% of employed people Number of
------------------------------------------------------------------------------------------------- FY 2021 Q1-
SOC code Description Black or African Q3 H-2A
White American Asian Hispanic or Latino workers
--------------------------------------------------------------------------------------------------------------------------------------------------------
45-0000................ Farming, fishing, 90..................... 4..................... 2..................... 43.................... (**)
and forestry
occupations.
47-2061................ Construction 87..................... 8..................... 1..................... 46.................... 2,107
Laborers.
53-3032................ Heavy and Tractor- 77..................... 17.................... 3..................... 23.................... 526
Trailer Truck
Drivers.
45-1011................ First-Line 90..................... 5..................... 3..................... 28.................... 328
Supervisors of
Farming, Fishing,
and Forestry
Workers.
47-3012................ Helpers--Carpenter Not available.......... Not available......... Not available......... Not available......... 104
s.
45-4022................ Logging Equipment Not available.......... Not available......... Not available......... Not available......... 57
Operators.
49-3041................ Farm Equipment 94..................... 4..................... 1..................... 19.................... 55
Mechanics and
Service
Technicians.
47-2031................ Carpenters........ 88..................... 7..................... 2..................... 36.................... 30
47-3019................ Helpers, Not available.......... Not available......... Not available......... Not available......... 18
Construction
Trades, All Other.
47-2051................ Cement Masons and 83..................... 8..................... 1..................... 53.................... 16
Concrete
Finishers.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Not available 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
proposed rule over the 10-year analysis period. The Department
estimates the annualized costs of the proposed rule at $0.19 million
and the annualized transfers (from H-2A employers to employees) at
$30.17 million, at a discount rate of 7-percent.
Exhibit 8--Estimated Monetized Costs and Transfers of the Proposed Rule
[2020 $millions]
------------------------------------------------------------------------
Year Costs Transfers
------------------------------------------------------------------------
2022.................................... $0.00 $11.86
2023.................................... 0.00 25.05
2024.................................... 0.00 26.45
2025.................................... 0.00 27.93
2026.................................... 0.00 29.50
2027.................................... 0.00 31.15
2028.................................... 0.00 32.90
2029.................................... 0.00 34.74
2030.................................... 0.00 36.68
2031.................................... 0.00 38.74
-------------------------------
Undiscounted 10-Year Total.......... 0.45 295.00
10-Year Total with a Discount Rate 0.45 254.20
of 3%..............................
10-Year Total with a Discount Rate 0.45 211.87
of 7%..............................
------------------------------------------------------------------------
10-Year Average......................... 0.045 29.50
Annualized with a Discount Rate of 3%... 0.053 29.80
Annualized with a Discount Rate of 7%... 0.064 30.17
------------------------------------------------------------------------
[[Page 68197]]
5. Regulatory Alternatives
The Department considered two alternatives to the proposal of using
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 SOCs:
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, job opportunities classified under any other
SOC will have the AEWR set using the same methodology in the proposed
rule: The AEWR for each occupation would be the statewide annual
average hourly gross wage for that occupation 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 occupation as
reported by the OEWS survey.
Under the first regulatory alternative, the Department considered
setting the AEWR for job opportunities classified under SOCs 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
occupations 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 occupation 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 $103.30 million. The total
transfer over the 10-year period was estimated at $1.03 billion
undiscounted, or $890.12 million and $741.88 million at discount rates
of 3 and 7 percent, respectively. The annualized transfer over the 10-
year period was $104.35 million and $105.63 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 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 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, 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 $72.30
million. The total transfer over the 10-year period was estimated at
$723.03 million undiscounted, or $623.03 million and $519.28 million at
discount rates of 3 and 7 percent, respectively. The annualized
transfer over the 10-year period was $73.04 million and $73.93 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 and Costs of the Proposed Rule
[2020 $millions]
----------------------------------------------------------------------------------------------------------------
Regulatory Regulatory
Proposed rule alternative 1 alternative 2
(transfers from (transfers from (transfers from
employers to employers to employees to
employees) employees) employers)
----------------------------------------------------------------------------------------------------------------
Total 10-Year Transfer................................. $295 $1,033 $723
Total with 3% Discount................................. 254 890 623
Total with 7% Discount................................. 212 742 519
Annualized Undiscounted Transfer....................... 30 103 72
Annualized Transfer with 3% Discount................... 30 104 73
Annualized Transfer with 7% Discount................... 30 106 74
----------------------------------------------------------------------------------------------------------------
The Department prefers the chosen approach of the proposed rule
because it allows specific OEWS wages for workers in higher paid
agricultural occupations, such as supervisors of farmworkers and
construction laborers on farms while maintaining the use of FLS data
for occupations 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 occupations. 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 Regulatory Flexibility Act of 1980 (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
[[Page 68198]]
(IRFA) when proposing, and a final regulatory flexibility analysis
(FRFA) when issuing, regulations that will have a significant economic
impact on a substantial number of small entities. The Department
certifies that the proposed 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.
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
Small Business Administration (SBA), in effect as of August 19, 2019,
to classify entities as small.\102\ SBA establishes separate standards
for individual 6-digit 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 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.\103\
---------------------------------------------------------------------------
\102\ 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.
\103\ 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 and merged those 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 name and city. The Department
identified 9,927 unique employers (excluding labor contractors). 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 small (80.5 percent).\104\ 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 proposed rule on small
entities is based on the number of small unique entities (2,085 with
revenue data).
---------------------------------------------------------------------------
\104\ 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 entities
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 162 8
Supply Stores.
561730................................... Landscaping Services................. 134 7
445230................................... Fruit and Vegetable Markets.......... 127 6
424480................................... Fresh Fruit and Vegetable Merchant 84 4
Wholesalers.
111339................................... Other Noncitrus Fruit Farming........ 78 4
112990................................... All Other Animal Production.......... 57 3
424930................................... Flower, Nursery Stock, and Florists' 51 3
Supplies Merchant Wholesalers.
424910................................... Farm Supplies Merchant Wholesalers... 41 2
484230................................... Specialized Freight (except Used 39 2
Goods) Trucking, 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; TEGL 17-
06, Change 1; TEGL 33-10, and TEGL 16-06, Change 1) to this proposed
rule. We estimated the costs of (a) time to read and review the
proposed rule and (b) 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, 1,946 unique small entities,\105\ would incur a one-time cost of
$53.08 to familiarize themselves with the rule.\106\
---------------------------------------------------------------------------
\105\ The 1,946 unique small entities exclude all labor
contractors.
\106\ $33.38 + $33.38(0.46) + $33.38(0.17) = $53.08.
---------------------------------------------------------------------------
In addition to the cost of rule familiarization above, each small
entity will 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 proposed rule in CY 2020 and CY 2021. The
Department estimates the total annualized cost at a discount rate of 7
percent is $4,347 on average.
The Department determined the proportion of each small entity's
total revenue that would be impacted by the costs of the proposed rule
to determine if the proposed 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.
[[Page 68199]]
A threshold of 3 percent of revenues has been used in prior
rulemakings for the definition of significant economic impact.\107\
This threshold is also consistent with that sometimes used by other
agencies.\108\
---------------------------------------------------------------------------
\107\ 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).
\108\ 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
three 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 proposed 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 had more than 3 percent of
their total revenue impacted in the first year. Based on the findings
presented in Exhibit 11, the proposed rule does not have a significant
economic impact on a substantial number of small H-2A employers.
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
--------------------------------------------------------------------------------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------------------------------------------------------------------------------
5%................................................... 4 (0.7%) 0 (0.0%) 2 (1.5%) 2 (1.6%) 17 (1.6%) 25 (1.2%)
-------------------------------------------------------------------------------------------------
Total >3%......................................... 4 (0.7%) 0 (0.0%) 2 (1.5%) 2 (1.6%) 19 (1.8%) 27 (1.3%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
C. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501, et seq.,
and its attendant regulations, 5 CFR part 1320, require the Department
to consider the agency's need for its information collections and their
practical utility, the impact of paperwork and other information
collection burdens imposed on the public, and how to minimize those
burdens. This proposed rule does not require a collection of
information subject to approval by OMB under the PRA, or affect any
existing collections of information.
D. Unfunded Mandates Reform Act of 1995
The Unfunded Mandates Reform Act of 1995 (UMRA) is intended, among
other things, to curb the practice of imposing unfunded Federal
mandates on State, local, and tribal governments. Title II of UMRA
requires each Federal agency to prepare a written statement assessing
the effects of any Federal mandate in a proposed or final agency rule
that may result in a $100 million or more expenditure (adjusted
annually for inflation) in any one year by State, local, and tribal
governments, in the aggregate, or by the private sector. The inflation-
adjusted value equivalent of $100 million in 1995 adjusted for
inflation to 2019 levels by the Consumer Price Index for All Urban
Consumers (CPI-U) is approximately $168 million based on the Consumer
Price Index for All Urban Consumers.\109\
---------------------------------------------------------------------------
\109\ See BLS, Historical Consumer Price Index for All Urban
Consumers (CPI-U): U.S. City Average, All Items, By Month, https://www.bls.gov/cpi/tables/supplemental-files/historical-cpi-u-202003.pdf (last visited Aug. 19, 2021).
Calculation of inflation: (1) Calculate the average monthly CPI-
U for the reference year (1995) and the current year (2019); (2)
Subtract reference year CPI-U from current year CPI-U; (3) Divide
the difference of the reference year CPI-U and current year CPI-U by
the reference year CPI-U; (4) Multiply by 100 = [(Average monthly
CPI-U for 2019--Average monthly CPI-U for 1995)/(Average monthly
CPI-U for 1995)] * 100 = [(255.657-152.383)/152.383] * 100 =
(103.274/152.383) *100 = 0.6777 * 100 = 67.77 percent = 68 percent
(rounded). Calculation of inflation-adjusted value: $100 million in
1995 dollars * 1.68 = $168 million in 2019 dollars.
---------------------------------------------------------------------------
This proposed rule does not result in unfunded mandates for the
public or private sector because private employers'' participation in
the program is voluntary, and State governments are reimbursed for
performing activities required under the program. The requirements of
Title II of the UMRA, therefore, do not apply, and the Department has
not prepared a statement under the UMRA.
E. Executive Order 13132 (Federalism)
This proposed rule would not have substantial direct effects on the
States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government. Therefore, in accordance with section 6
of E.O. 13132, it is determined that this proposed rule does not have
sufficient federalism implications to warrant the preparation of a
federalism summary impact statement.
F. Executive Order 12988 (Civil Justice Reform)
This proposed rule meets the applicable standards set forth in
sections 3(a) and 3(b)(2) of E.O. 12988.
[[Page 68200]]
G. Regulatory Flexibility Executive Order 13175 (Consultation and
Coordination With Indian Tribal Governments)
This proposed rule does not have ``tribal implications'' because it
does not have substantial direct effects on one or more Indian tribes,
on the relationship between the Federal Government and Indian tribes,
or on the distribution of power and responsibilities between the
Federal Government and Indian tribes. Accordingly, E.O. 13175,
Consultation and Coordination with Indian Tribal Governments, requires
no further agency action or analysis.
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 Department of Labor
proposes to amend 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 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 revising paragraphs (b)(1)(i) through (iii)
and (b)(5) to read as follows:
Sec. 655.120 Offered wage rate.
* * * * *
(b)(1) * * *
(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.
(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 January 31, 2022, 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.
* * * * *
(5) If the job duties on the Application for Temporary Employment
Certification do not fall within a single occupational classification,
the applicable AEWR shall be the highest AEWR for all applicable
occupations.
* * * * *
Angela Hanks,
Acting Assistant Secretary for Employment and Training, Labor.
[FR Doc. 2021-25803 Filed 11-30-21; 8:45 am]
BILLING CODE 4510-FP-P
