The agricultural sector is buzzing with news that could fundamentally reshape workforce planning across the country. Following the Department of Labor’s (DOL) announcement of a new methodology for calculating the H-2A Adverse Effect Wage Rate (AEWR), most growers are seeing a significant and immediate drop in required labor costs.
This is the reform farmers have been waiting for, and at Garza Labor, we are thrilled. As Magali Perez, our Chief Operating Officer, noted, this shift is a “huge change over last year,” and we anticipate that “more farmers/growers are going to want H-2A labor than years before.” This is a monumental opportunity for long-term sustainability on the farm, and Garza Labor is ready to help our clients capitalize on every dollar saved.
A Historic Drop in H-2A Labor Costs
For years, the rapidly escalating AEWR has been the primary barrier to entry for many small and medium-sized farms considering the H-2A program. This new rule, which went into effect immediately in early October, provides the financial relief growers desperately need.
The core of the change involves the DOL moving to a new wage data source, combined with the introduction of a critical new feature: an Adverse Compensation Adjustment (ACA). This adjustment recognizes the substantial non-wage costs borne by farmers, such as providing free housing, and allows for a state-level deduction on the AEWR. This essentially lowers the effective hourly cost, resulting in immediate payroll savings for most growers across the nation.
While we understand that details are still emerging (even amidst temporary government service uncertainties), the key takeaway is clear: the cost of securing a stable, dedicated H-2A workforce is now demonstrably more affordable than it has been in years.
Unlocking Stability and Affordability for New H-2A Users
This shift validates the years of advocacy by organizations like ours, who have pushed for an AEWR calculation that accurately reflects the economic realities of farming. The previous rates often made the H-2A program financially unviable, particularly for specialty crop growers operating on thin margins.
The impact of this lower rate is transformational for two key groups:
- Current H-2A Users: Growers who rely on the program will see immediate and substantial cost savings that can be reinvested directly into their operations—whether for equipment upgrades, land maintenance, or managing other rising input costs.
- Prospective H-2A Users: The lower AEWR breaks down the financial barrier for thousands of new farmers who can now access the program’s stability. A reliable workforce is the cornerstone of a successful harvest, and this affordability allows growers to secure that workforce without jeopardizing their bottom line. We believe this is the moment for growers to finally transition from year-to-year labor uncertainty to a stable, affordable H-2A solution.
Garza Labor: Your Partner in Maximizing New H-2A Savings
At Garza Labor, we are not just excited about this change, we are prepared. We have been advocating for this outcome and are now fully equipped to guide our clients through the immediate complexities of the new rule and application process.
The new structure, with its tiered wages and compensation adjustments, adds nuance to job order certification. Our team is already mastering these new requirements to ensure every client’s application is optimized to receive the maximum possible savings.
The lower rate is here, and the time for action is now. If you are a grower who has considered H-2A in the past but was deterred by cost, or a current user looking to maximize the new savings, contact Garza Labor today. Let us turn this historic wage reform into a year of record stability and affordability for your farm.
