Judge strikes down H-2A interim final rule

On Aug. 26, a U.S. federal district court ruled that the interim final rule on farmworker wages from October 2025 must be rewritten.

The decision found that the U.S. Department of Labor interim final rule did not meet the good cause standard for bypassing the required notice and comment period, in violation of federal law.

The rule cut farm workers’ wages by up to $7 per hour, depending on the state, and DOL estimated that the rule would annually transfer $2.46 billion in wages from workers to employers.

Federal law requires the DOL to ensure hiring temporary foreign farmworkers under H-2A visas doesn’t drag down wages for U.S. farmworkers doing the same jobs.

Since 2016, the DOL has set each region’s minimum required wage, called the Adverse Effect Wage Rate. Last October, citing the discontinuation of the U.S. Department of Agriculture's Farm Labor Survey, which it had long relied on as its primary tool to calculate AEWRs, the department issued an interim final rule overhauling how that wage floor gets calculated without going through the normal public comment process.

This decision is the culmination of a federal lawsuit filed last year against the DOL rule by United Farm Workers, the UFW Foundation and a group of 18 individual farmworkers. The lawsuit argued the IFR's formula was designed to lower wages rather than accurately track the market.

What the court found

U.S. District Judge Kirk Sherriff found DOL's new wage formula unlawful, finding three of four challenged components “arbitrary and capricious.” He ruled the agency lacked good cause to skip the public notice and comment process for most of the changes.

The three elements of the IFR that were deemed arbitrary and capricious were:

• The current two-tier Skill Level I and Skill Level II wage structure.

• The housing adjustment used in calculating AEWRs.

• The “greater than 50%” rule used to determine occupational classifications.

In the court’s judgement, Sherriff wrote that there are significant distinctions between the IFR’s two-tier system and the H-1B program’s four-tier system on which it was based.

He continued that the methodology used in determining the tier system’s wage structure sets the AEWRs for the vast majority of H-2A workers well below the relevant market wages, which runs counter to the DOL’s mandate that hiring H-2A workers will not adversely affect the wages and working conditions of similar U.S. workers.

Sherriff also critiqued the housing adjustment, saying it effectively reduced workers’ wages by deducting the value of employer-provided housing from the AEWR, which conflicts with federal regulations that require growers to provide that housing at no cost to H-2A workers.

Sherriff additionally took issue with the IFR’s greater-than-50% approach, which requires an entire job to be classified under whichever duty consumes more than half a worker’s time, even when that means a higher-paying task gets paid at the lower rate if the worker spends less than half their time performing it.

The court did, however, recognize that DOL had good cause to act quickly in selecting a replacement wage-data source after USDA discontinued the Farm Labor Survey. DOL’s use of Occupational Employment and Wage Statistics data was the fourth component that was challenged and the only one that survived the judicial process.

“The IFR fails to show why hiring more H-2A workers at then-current AEWRs was not feasible, and it fails to demonstrate good cause for bypassing notice and comment with the tier system, housing adjustment, and greater than 50% rule,” Sherriff wrote in his judgement. “Those components of the IFR should have gone through the notice and comment process.”

What’s next for H-2A interim final rule

The court remanded the IFR to DOL without vacating it. For employers that use the H-2A program, that means the status quo remains in effect until something replaces it. However, the court did not restore the previous, pre-IFR H-2A system.

The court directed DOL to promptly develop and publish a new AEWR methodology and replacement wage rates consistent with the court’s decision. The court also left open the possibility that employers could eventually be required to make wage adjustment payments if the replacement AEWRs exceed wages paid during the applicable interim period.

No back pay or wage adjustments have been ordered at this time, but DOL must notify state workforce agencies, employers and the public about the potential for future wage adjustments.

The court will continue to oversee the case, and the parties must provide an initial status report within two weeks, outlining DOL’s progress and the anticipated timeline.

JPH Law Firm, AmericanHort’s legal counsel, has been following the IFR since it was established and has recorded webinars explaining the details of this complicated rule, as well as how it revised AEWR. Shawn Packer, principal member of JPH, reviewed Sheriff’s decision and wrote an opinion for AmericanHort members.

Packer wrote that growers using the H-2A system now face a period of uncertainty.

“Employers must continue operating under a rule that remains legally effective even though a federal court has concluded that important portions of that rule cannot stand as presently justified,” Packer wrote. “At the same time, the court has created the possibility that workers may eventually be entitled to additional wages for work performed while DOL develops its replacement rule.”

His recommendation is not to panic, but to recognize potential exposure that now exists and preserve the records that may be needed when the DOL determines what comes next.

Matt Mika, senior vice president of government affairs and chief advocacy officer for AmericanHort, sees the court’s decision regarding the IFR as another reason to support the U.S. House Agriculture Committee’s H-2A reform bill, which was introduced in July.

“This decision only amplifies the need for a long-term, permanent solution to the agricultural labor workforce issue,” Mika says. “Congress can provide that, with full support from AmericanHort and the entire agricultural industry, to support and pass H.R. 9535, the Securing Agriculture’s Workforce Act (SAWA).”

Matt McClellan is editor of Nursery Management magazine, a GIE Media Horticulture Group publication. Contact him at mmcclellan@gie.net.