Changes to the H-2A program become too expensive for many producers

Farmers across the country who are facing a worker shortage may no longer be able to afford the farm labor they need to keep their operations running.

Jon Hofer runs a farm spread across six counties in central South Dakota, where he relies heavily on his H-2A workers to help keep running.

"I didn’t grow up on a family farm where I have a brother or a dad that is here every day working on the farm too, so for me I need these workers because it’s hard in this area to find people from town that want to work the hours that we have to work in spring or in the fall,” said Hofer.

"We hear stories all the time from people who say, ‘listen, if it wasn’t for you guys and the H-2A program, I would have to shut my doors and close down business because I can’t find people to harvest crops,” said Alex Cracchiolo, technical writer for USA Farm Labor Inc.

However, changes have been put into place by the United States Department of Labor for H-2A Temporary Agriculture Program forcing producers to pay many of their H-2A workers significantly more than before.

Prior to this rule, employers were required to pay the Adverse Effect Wage Rate, which is based off of the Farm Labor Survey, which is a survey that USDA does to collect information about how much farm workers around the country are getting pay, said Cracchiolo.

“One of the challenges with this new rule is that a lot of times people aren’t going to be paying workers based on the Farm Labor Survey, they are instead going to be paying on the OEWS, which is more of a metropolitan, urban wage rate,” said Cracchiolo. “That doesn’t really take into account the factors of the agricultural labor market, which makes it less than ideal.”

The new rule looks at all the jobs listed in the H-2A’s job description and has employers compensate them for the highest wage rate offer for that specific task.

“If you hire workers to do things that are outside of their sort of idea of what general, normal farm work is, what they do is they look at those specific job duties that they consider to be extra, and they say ‘OK, well this job duty is also in these other occupations, and this is the highest paying of those occupations, so this is the wage rate that this employer should be paying,’” said Cracchiolo.

However, a lot of the tasks that the Department of Labor has isolated as non-standard tasks for agricultural workers are actually commonly done chores on a farm, such as hauling commodities to the marketplace, even just once during the season.

“If you are hiring workers that are going to be hauling these commodities off the farm to some sort of a local elevator, they want you to instead be paying those workers for the entire season a wage rate that is really for heavy trucking, which of course is a completely different job, different requirements, involves much further distances being driven. It’s a completely separate job,” said Cracchiolo.

The USA Farm Labor Inc. compared the new wage rates to the old wage rates and found that, on average, operation costs for producers will increase by between $100,000 and $200,000 per season.

According to the USA Farm Labor Inc, the South Dakota required wage rate prior to the new rule was $17.33 per hour. But now, an employer who will be required to pay the first-line supervisor wage rate will have to pay that employee $29.08 per hour, an $11.75 raise per hour.

The situation also gets more complicated if the employer also has American workers, said Cracchiolo. Regulations forbid the employers from paying H-2A workers more than any employed American workers. Under this rule, if the employer has American workers who do any of the same job duties, not just the affected duties, as the H-2A worker who is paid the supervisor rate, then the employer must pay that American worker the supervisor rate as well, even if they do not act as a supervisor.

“For a lot of people, that’s just not sustainable, something that they just simply can’t afford,” said Cracchiolo.

The rule change has not gone unnoticed by Congress. Resolutions in the U.S. House and U.S. Senate express disappointment at the rule.

“It is already difficult to find workers," U.S. Sen. Kevin Cramer, R-N.D., said in a statement about the resolutions. "We should not be placing more rules and regulations on this industry, especially when inflation is high and prices keep increasing.”

On top of the wage increase, Cracchiolo says the United State Citizenship and Immigration Services is also trying to significantly increase their fees for the program as well.

“Employers are getting hit from both sides here,” said Cracchiolo. “On one hand the Department of Labor is increasing their costs, USCIS is increasing their costs, and it makes things really, really difficult.”

“If I wouldn’t be able to get H-2A workers here and couldn’t come across anyone local here that wanted to work I guess I would have to downsize the operation and just farm the acres that I can all by myself,” said Hofer. “It would be difficult to do what we are doing now without these workers.”

Cracchiolo encourages anyone who may be affected by this new rule to reach out to their representatives and explain the situation to them.