Adverse Effect Wage Rate Methodology for the Temporary Employment of H-2A Nonimmigrants in Non-Range Occupations in the United States

Under the 2023 AEWR Final Rule, the Department determined a single AEWR for any job opportunity where the duties to be performed cover one or more of the following six SOC codes reported by the FLS: 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). In adopting this approach, the Department reasoned that the broad, overlapping nature of tasks listed in the Occupational Information Network (O*NET) for these six field and livestock workers (combined) SOC codes is consistent with the most common tasks performed by workers in agricultural operations and the variety of duties employers may require of field and livestock workers during a typical workday or intermittently during the period of employment. Further, in response to public comments, the Department concluded that establishing a single AEWR for this group of six SOC codes provided a reasonable amount of flexibility with respect to the type of duties a field and livestock worker may perform without added recordkeeping, administrative burden, or uncertainty regarding wage obligations.

Although this IFR affirms the policy decision to establish a single AEWR covering the most common field and livestock worker (combined) occupations, for the reasons stated below, the Department is making a minor change to remove SOC code 45-2099, All Other Agricultural Workers, from the AEWR computations. Specifically, the Department is removing reference to the USDA FLS under 655.120(b)(1)(i) in determining the AEWR for the field and livestock workers (combined) category and concludes that this change will produce more accurate wage estimates of workers in the United States performing agricultural work that is encompassed by the most common field and livestock worker (combined) occupations for which employers are seeking temporary agricultural labor certification.

First, based on how the SOC system is administered, the employment and wage information associated with workers classified within 45-2099, All Other Agricultural Workers, represents too broad a spectrum of jobs that are not common or prevalent in the agricultural labor market. According to the BLS, for example, the SOC system is used “to classify workers and jobs into occupational categories for the purpose of collecting, calculating, analyzing, or disseminating data.” \162\ Jobs within the labor market that have similar duties, and in some cases, similar skills, education, and/or training, are organized into a distinct detailed SOC code.\163\ Under the SOC system, workers are assigned a SOC code based on the job duties or work tasks performed and, in some cases, on the skills, education or training needed to perform the work.\164\

\162\ See 2018 SOC Manual, 1. Available at: https://www.bls.gov/soc/2018/soc_2018_manual.pdf.

\163\ Id.

\164\ Id. at 23.

Because the goal of the SOC system is to classify all jobs into an occupational classification where work is performed for pay or profit, there are circumstances in which the duties and tasks performed by workers are too diverse, less prevalent or emerging within the labor market where assignment to a detailed occupation is not practicable. When these circumstances occur and workers do not perform job duties described in any distinct detailed occupation, the SOC system classifies the worker's duties performed as one contained within an “All Other” SOC code.\165\ For example, the SOC code 45-2099, Agricultural Workers, All Other, which broadly covers all agricultural workers not otherwise captured by the more detailed SOC codes in the entire 45-0000 series of farming, fishing, and forestry related occupations, provides no sample job titles or any other detailed description to understand what kind of field or livestock work duties, if any, are being performed by workers and classified within this “All Other” SOC code.

\165\ Id.

Further, based on the May 2024 OEWS data release, the 45-2099 SOC code only accounted for 4,980 jobs nationwide; approximately 1.1% of the estimated 442,050 jobs in the 45-0000 series that encompasses all farming, fishing, and forestry occupations. Similarly, according to the FLS November 2024 annual report, the 45-2099 SOC code only accounted for an average of 7,000-8,000 jobs nationwide; approximately 1.1% of the estimated 710,000-720,000 field and livestock worker (combined) employment during the July and October 2024 reference quarters. Thus, the relevant data demonstrate that employment of workers classified within this “All Other” SOC code are not common or prevalent within the agricultural labor market.

Second, because the 45-2099, Agricultural Workers, All Other SOC code covers a broad spectrum of jobs that are not common in the agricultural labor market, the Department cannot effectively determine whether an employer's job qualification(s) and requirement(s) to perform work that could be classified under this SOC code and are normal and accepted qualifications required by employers that do not use H-2A workers in the same or comparable occupations and crops, as required by statute and regulations. See 8 U.S.C. 1188(c)(3); 20 CFR 655.122(b). Specifically, O*NET, which is based on the SOC system and collects detailed occupational data related to common work tasks, skills, licensure, education, experience, and other job qualifications and requirements, is an essential tool of independent worker-centric information the Department has historically used to evaluate whether the job qualifications and requirements contained in an employer's job offer are normal and accepted qualifications required by employers that do not use H-2A workers in the same or comparable occupations and crops, as required by statute and regulations. See 8 U.S.C. 1188(c)(3); 20 CFR 655.122(b). Because the work performed contains too wide a range of characteristics that do not fit

into any other detailed occupational code, the O*NET does not consistently report such essential information for “Agricultural Workers, All Other” that can be used to effectively determine compliance with program requirements. Although the employer may be required to submit documentation to substantiate the appropriateness of any job qualification, the lack of such essential information in the O*NET prevents the CO and the SWA from determining whether the employer's documentation is sufficient to meet program requirements, as there is no independent source of data the CO and the SWA can use to assess any particular job qualification or requirement specified in the employer's job offer.

Finally, due to the way the SOC coding system is administered and the lack of essential information in O*NET to assess whether job qualifications or requirements specified in the employer's job offer meet program requirements, the 45-2099, Agricultural Workers, All Other SOC code offers very little practical utility for OFLC and the SWA with respect to classifying the duties or work tasks for which employers are requesting temporary labor certification. Based on a review of public H-2A labor certification records submitted under the 2023 AEWR Final Rule on and after April 1, 2023, through March 30, 2025, OFLC issued 44,014 temporary agricultural labor certifications covering more than 742,600 worker positions classified within approximately 75 different SOC codes. Of these totals, only 20 H-2A labor certification records covering 125 worker positions were granted temporary agricultural labor certification where the duties or work tasks to be performed were classified as SOC 45-2099, Agricultural Workers, All Other. However, based on careful quality review of these H-2A labor certification records, each of these applications were improperly coded by OFLC and the SWA and the duties or work tasks to be performed should have been more appropriately classified within one of the detailed occupations within the SOC system. Therefore, the change being made through this IFR should have little to no impact on the wages required to be paid to H-2A workers and other workers in corresponding employment.

Thus, based on how the SOC coding system is administered, relevant data, and the experience of OFLC processing employer job orders in the H-2A program, the Department concludes that employment and wage information associated with workers classified within SOC code 45-2099, All Other Agricultural Workers, does not provide practical utility for its continued use in the field and livestock workers (combined) category due to the broad spectrum of unknown duties and tasks performed by workers classified within this SOC code. In addition, due to the significantly small percentage of employment this SOC code represents within the agricultural labor market, the Department concludes that the removal of this SOC code will not have an adverse effect on the amount of flexibility an employer needs with respect to the type of duties a field and livestock worker may perform without added recordkeeping, administrative burden, or uncertainty regarding wage obligations. Even with the removal of SOC code 45-2099 (Agricultural Workers, All Other), the Department maintains that each of the remaining five SOC codes constituting field and livestock workers (combined) already encompass a wide array of work tasks and responsibilities, some of which overlap and mutually support one another (i.e., the same or substantially similar duties, requirements, or tools are included in more than one of the five SOC codes).

Accordingly, under this IFR, the Department has modified paragraph (b)(1)(i)(A) to state that it will determine a single statewide AEWR at two skill levels for any job opportunity where the duties to be performed cover one or more of the following five SOC codes representing the field and livestock workers (combined) category: 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); and Graders and Sorters, Agricultural Products (45-2041). In the rare circumstances in which there is no statewide wage reported by OEWS field and livestock workers (combined) category, the Department will use the national annual average gross hourly wage reported by the OEWS for the particular SOC code and skill level, which will ensure an AEWR determination can be made each year. Thus, the Department has also revised paragraph (b)(1)(i)(B) to reflect use of a national annual average gross hourly wage reported by the OEWS in these circumstances and, with this modification, has removed paragraph (b)(1)(i)(C).

For H-2A job opportunities that do not fall within the five SOC codes that constitute the field and livestock workers (combined) category, the Department will use the OEWS survey to determine SOC- specific AEWRs. Under this IFR and as described in revised paragraph (b)(1)(ii)(A), the AEWRs at two skill levels for all non-range SOC codes where the primary duties, including those duties that are directly and close related, that fall outside the field and livestock workers (combined) category will be the statewide annual average hourly gross wage for the SOC code, as reported by the OEWS survey. If the OEWS survey does not report a statewide annual average hourly gross wage for the SOC code and at the skill level, as described in paragraph (b)(1)(ii)(B), AEWR for that State and skill level will be the national annual average hourly gross wage for the SOC code, as reported by the OEWS survey.

As previously discussed, the OEWS has practical utility to the agency in circumstances where the agricultural labor or services to be performed qualify under the H-2A program but are not adequately represented by the five most common field and livestock worker (combined) occupational wages. For instance, as discussed in the 2023 AEWR Final Rule, the OEWS is a useful wage source for those occupations that constitute a small percentage of agricultural labor or services and a larger subset of non-agricultural labor or services (e.g., construction workers) or provide agricultural support services to farms (e.g., farm equipment mechanics) or where the work is generally not performed on farms or ranches such that wages are not representative of those covered by the most common farm and livestock worker (combined) occupations (e.g., logging occupations). These positions are often filled as contract positions through non-farm establishments, rather than direct on-farm hired positions, for which the OEWS survey consistently covers in its sampling frames, and for which the cross- industry reach of this survey inherently covers the same or substantially similar work both in and outside the agricultural sector. And finally, H-2ALC participation in the H-2A program has grown significantly since 2010 and the employment of H-2A workers by non-farm establishments remains a high percentage of all H-2A

worker positions certified by the Department.\166\

\166\ A recent Government Accountability Office (GAO) report noted that “from FY 2020 through FY 2023, direct-hire employers submitted most of the applications (84 percent, on average) that OFLC approved, which accounted for 57 percent of the jobs approved during the period. Farm labor contractors (FLC) submitted 15 percent of approved applications and accounted for 42 percent of the jobs approved during the period.” GAO further found “that the average number of jobs per approved application was over four times higher for FLCs (54 jobs) when compared to direct-hire employers (13 jobs).” Government Accountability Office, H-2A Visa Program: Agencies Should Take Additional Steps to Improve Oversight and Enforcement, GAO-25-106389 (Nov. 14, 2024). More recently and based on a review of H-2A applications covering all agricultural sectors certified by OFLC covering October 1, 2023, through June 30, 2025, the proportion of H-2A worker positions certified for employers operating as H-2ALCs remained high. In FY 2024, of the 384,865 worker positions certified nationally, 163,844 (or 43 percent) were issued to H-2ALCs. From October 1, 2024, through July 1, 2025, for FY 2025, of the 317,459 worker positions certified nationally, 134.209 (or 42.3 percent) were issued to employers operating as H- 2ALCs. See https://www.dol.gov/agencies/eta/foreign-labor/performance (accessed July 28, 2025).

As discussed previously, the available program data supports the Department's determination that OEWS wage data collected from non-farm establishments, such as farm labor contractors or H-2ALCs, who employ workers to perform duties not covered by the five field and livestock workers (combined) category SOC codes, is an appropriate source of actual market wages in agriculture to determine the AEWRs for all other SOC codes. The Department's decision to expand the OEWS survey to cover farm establishments will further strengthen the survey for positions that are outside the field and livestock worker (combined) SOC codes by ensuring that the employment and wages associated with any direct on- farm employees are incorporated into the annual wage estimates. The more robust employment and wage estimates resulting from this expansion will have a corollary benefit of enhancing the accuracy of prevailing wage determinations in the H-2B temporary non-agricultural labor certification program, and other nonimmigrant and immigrant programs, where workers are performing the same or substantially similar work for employers who otherwise cannot qualify under the H-2A program and where prevailing wage determinations are predominantly based on the wages collected from non-farm establishments. Where the primary duties, including those duties closely and directly related, fall outside the five field and livestock worker (combined) category, the Department recognizes that the AEWRs determined for these SOC codes, even at two skill levels, may result in higher wages, depending upon geographic location and the specific SOC code. These relatively higher AEWRs, however, will most likely be the result of administering a more robust and accurate set of occupational data from the OEWS that is better representative of the actual wages paid to workers in these relatively higher skill jobs, and thus will provide appropriate protection against adverse effect.

Finally, the Department will continue to determine the AEWRs for the SOC covering a statewide geographic area. In the temporary nonimmigrant and permanent immigrant programs, the Department generally establishes prevailing wages based on the OEWS for the SOC in one or more metropolitan or non-metropolitan areas or statewide in circumstances where localized prevailing wages cannot be reported due to small sample sizes. For the H-2A program, however, the Department will use a statewide wage both to more closely align with the geographic areas historically used by the Department under the H-2A program and to protect against potential wage depression from a large influx of nonimmigrant workers that is most likely to occur at the local level.

As explained in prior rulemakings, the concern about localized wage depression is more pronounced in the H-2A program due to both the vulnerable nature of agricultural workers and the fact that the H-2A program is not subject to a statutory cap, which allows a potentially unlimited number of nonimmigrant workers to enter a given local area.\167\ In the rare circumstances in which there is no statewide wage, use of the national annual average gross hourly wage reported by the OEWS for the particular SOC code and skill level will ensure an AEWR determination can be made each year for each SOC code outside of the field and livestock workers (combined) category.

\167\ See, e.g., 75 FR at 6895.

Under this IFR, the Department is implementing a standard downward adjustment to the hourly AEWRs that accounts for the compensation disparity U.S. workers face when H-2A workers are being paid for work performed under the same work contract but, unlike most U.S. workers, receive additional non-wage compensation in the form of free housing. Those U.S. workers who are reasonably able to return to their permanent places of residence at the end of each workday, must continue to bear these essential costs from their wages, despite often being offered and often paid the same wages as H-2A workers. Thus, the result is an adverse disparity in compensation where the effective wage rate of U.S. workers is lower than that mandated for H-2A workers under the same work contract, which the Department views as prohibited by the statute that this IFR seeks to correct.

The evidence available to the Department supports a conclusion that U.S. workers face significant burdens for housing costs from their earned wages. Specifically, domestic farm workers face significant challenges finding and maintaining affordable housing. Rural housing that is close in proximity to agricultural operations is often in short supply and decades of underdevelopment and regulatory requirements have contributed to rising costs, and available evidence demonstrates that this situation is placing an increasing burden on domestic farmworker family incomes. Due to the unique nature of agricultural work, employers face significant costs investing in housing units for temporary workers that may only be used during specific seasons of the year and, where H-2A workers are employed, employers are required to provide housing at no charge to H-2A workers and any migrant domestic farm workers. See 20 CFR 655.122(d)(1). Unfortunately, local domestic farmworkers, who may want to seek out temporary agricultural jobs where H-2A workers will be employed, are competing in an uneven playing field as they must accept employment under at least the same terms of the work contract--often at the same wage--while continuing to pay and maintain their own housing out of their earned wages. Therefore, as discussed in detail below, the Department seeks to address this adverse compensation effect due to the importation of H-2A workers while ensuring that the wage offers to any U.S. workers to perform the same agricultural labor or services are protected.

While it is challenging to obtain accurate data, the most recent data from the NAWS offers some practical evidence in favor of a wage policy that can account for the adverse compensation effect domestic farm workers face when H-2A workers are admitted into the United States to perform the same agricultural labor or services and provided housing at no cost. In 2021-2022, approximately 90 percent of crop workers reported living in housing not owned or administered

by their current employer, and only 7 percent of crop workers who do not migrate live in employer-provided housing free of charge. In fact, even among crop workers who migrate, only 12 percent reported living in employer-provided housing free of charge, signaling that the vast majority of crop workers across the United States pay for their housing costs, including those that cannot return to their primary residence after the end of the workday.\168\

\168\ Findings from the National Agricultural Workers Survey (NAWS) 2021-2022: A Demographic Employment Profile of United States Crop Workers (Sept. 2023), pg. 20-21.

Among crop workers who reported paying for their housing, approximately 61 percent paid $600 or more per month, 21 percent paid $400-599 per month, and another 56 percent interviewed reported living in housing rented from someone other than their employer (e.g., non- employer or non-relative).\169\ With more than 85 percent of crop workers reporting an hourly wage as the basis for their pay and earning an average of $14.53 per hour,\170\ the available evidence from the NAWS demonstrates that the majority of crop workers are paying the equivalent of $138 per week ($600 housing cost per month divided by 4.345 weeks per month) or $3.45 per hour of their average hourly wage ($138 per week divided by 40 hours of work per week) for their housing. Housing is generally considered affordable when a person spends 30 percent or less of their income on housing. With nearly 41 percent of crop workers reportedly earning less than $25,000 annually and most paying more than $600 or more per month, domestic farm workers are experiencing a significant housing cost burden that is not similarly born by H-2A workers.

\169\ Id. at pg. 22, 84.

\170\ Id. at pg. 3.

Other available reports and studies covering specific state or local areas also support the conclusion that housing poses a significant cost burden on the earnings of domestic farm workers. For example, based on an assessment of historical NAWS data and a survey of farm workers, the Housing Assistance Council (HAC) found that farm workers face challenges locating and retaining affordable housing. Specifically, due to their low wages, HAC found that farm workers pay a median monthly housing cost of approximately $380 with “approximately 34 percent of these farmworkers were cost-burdened, paying more than 30 percent of their monthly income for housing. Among all surveyed cost- burdened households, over 85 percent included children.” \171\ Within California, the National Farm Worker Ministry, which is a faith-based organization dedicated to advancing the rights of farm workers, recently observed that in “Santa Maria, Santa Barbara County, California, an area with a high number of farm workers, the median rent was $2,999 in March 2024. The average annual pay of a farm worker in Santa Barbara County in 2024 was $41,031 or $82,062 per year for two working parents. This means half of a family's income is going towards rent.” \172\

\171\ Housing Assistance Council, No Refuge from the Fields, a report of HAC's farmworker housing survey, available at https://www.ruralhome.org, (last visited August 10, 2025).

\172\ National Farm Worker Ministry, Issues Affecting Farm Workers: Housing, available at https://nfwm.org/farm-workers/farm-worker-issues/housing. (last visited August 10, 2025).

In another study measuring the impact of housing on domestic farm workers conducted by the University of California at Davis, economists utilized a 5-year sample from the American Community Survey to identify farm workers by industry and occupation for the purpose of measuring housing affordability at the state and county in California for comparison to the NAWS data. These economists found that “sixty-seven percent of farmworker families live in rented housing units, and 27.5 percent are severely rent burdened paying more than 50 percent of their income. We find that 54.5 percent of farmworker families are rent cost burdened.” \173\ And finally, in a 2023 report sponsored by the Oregon Housing and Community Services, researchers conducted a survey of farm workers in Hood River, Marion, Morrow, and Yamhill counties of Oregon and found that “nearly all farmworker households are cost burdened” by housing across the four counties.\174\

\173\ Alexis Vivas Flores and Timothy Beatty, Measuring Housing Affordability for Domestic Farmworkers in California: Are They Facing a Housing Affordability Crisis?, Selected Paper prepared for presentation at the 2024 Agricultural & Applied Economics Association Annual Meeting, New Orleans, LA, July 28-30, 2024, available through AgEcon Search at http://ageconsearch.umn.edu (last visited August 10, 2025).

\174\ Jamie Stamberg, Beth Goodman, Jennifer Cannon, and Ariel Kane, Cultivating Home: A Study of Farmworker Housing (Oregon: Oregon Housing and Community Services, May 2023). The researchers note that, on average, farmworker households have incomes of between approximately 25 percent and 37 percent of the Median Family Income (MFI) covering this geographic area, and typically, a household needs to earn about 60% of MFI to afford market-rate rent. This fact alone led the researchers to conclude that nearly all farmworker households were cost-burdened by their housing.

Employers have likewise cited the high costs associated with the employment of H-2A workers as one of the primary challenges to using the program. The employment of H-2A workers is generally more costly than hiring local domestic farm workers due to the other program costs and non-wage compensation benefits employers provide, which includes paying for transportation from the foreign worker's home country and return, daily transportation of foreign workers from housing to the worksites, and the costs associated with housing H-2A workers. These costs and non-wage compensation benefits provided to H-2A workers, which are not afforded to local U.S. workers, are above and beyond paying H-2A workers at least the hourly AEWR, which is almost always greater than federal and state minimum wage rates and often greater than any local or regional market-based wages for similar agricultural work.

Given the evidence presented that U.S. workers face an adverse compensation effect relative to the employment of H-2A workers, who are provided housing at no charge, the Department is adopting a standard adjustment factor to the AEWRs that accounts for this non-monetary compensation benefit. Specifically, under 20 CFR 655.120(b)(3) of this IFR, the OFLC Administrator is establishing a downward annual AEWR compensation adjustment factor for each State, which can only be applied to H-2A workers sponsored under the Application for Temporary Employment Certification, and computed as an equivalent hourly rate based on the weighted statewide average of Fair Market Rents (FMRs) for a four-bedroom housing unit available from the Department of Housing and Urban Development (HUD).\175\ Further, to ensure this downward adjustment is reasonable and not unduly burdensome on the earnings of H-2A workers, the standard hourly adjustment factor will not exceed 30 percent of the hourly AEWR determined for the employer's job opportunity. The policy rationale behind the 30 precent standard adopted in this IFR is to ensure the AEWRs that will apply to H-2A workers are set at a level that best approximates the maximum value of compensation these workers may be provided by employers related to their housing. Within federal

housing programs, this standard is a widely accepted benchmark for defining housing affordability and identifying households experiencing housing cost burden.\176\ Within its Section 8 Housing Choice Voucher Program, HUD uses this standard as a basis for paying housing subsidies where program beneficiaries pay a limited percentage of their adjusted gross incomes (i.e., typically 30 percent) for rent, with the balance of the rent paid by the federal program. And finally, to ensure employers continue to offer and pay any U.S. worker the full market- based AEWR determined under 20 CFR 655.120(b)(1)(i) and (ii), the standard hourly adjustment factor will only apply to the AEWR established separately for H-2A workers sponsored under the Application for Temporary Employment Certification.

\175\ The Department recognizes that some U.S. workers in corresponding employment may reside in H-2A employer-provided housing but believes that such circumstances are uncommon and these workers face similar adverse compensation effects as local U.S. workers. Accordingly, the Department will not apply the downward adjustment to the AEWR for non-H-2A workers, even if these workers reside in employer-provided housing.

\176\ See McCarty, Maggie and Daniels, Mary and Keightley, Mark, “Housing Cost Burdens in 2023: In Brief,” Congressional Research Service, Report No. R48450 (March 11, 2025). The report notes that “federal housing policies typically deem housing to be “affordable” if it costs no more than 30% of family income (adjusted for family size). According to this metric, families that pay more are considered to be `cost burdened,' and those that pay more than half of their incomes are considered `severely cost burdened.' ” For a more comprehensive discussion on the history of the 30 percent standard, see Pelletiere, Danilo and Pelletiere, Danilo, Getting to the Heart of Housing's Fundamental Question: How Much Can a Family Afford? A Primer on Housing Affordability Standards in U.S. Housing Policy. Available at SSRN: https://ssrn.com/abstract=1132551 or http://dx.doi.org/10.2139/ssrn.1132551.

In establishing this annual adverse compensation adjustment, the Department is relying on the weighted statewide average of Fair Market Rents (FMRs) for a four-bedroom housing unit available from HUD. FMRs represents the most comprehensive and reliable data on housing rental costs and are consistently published annually by HUD's Office of Policy Development and Research, in collaboration with the Economic and Market Analysis Division, using a combination of local surveys and the American Community Survey (ACS). For its low-income affordable housing programs, HUD establishes FMRs at various percentiles, including the 50th, percentile of gross rents, taking into account both rent and the cost of necessary utilities (except telephone, cable or satellite television, and internet services).\177\ With limited exceptions, HUD provides estimates for FMRs for all OMB-defined Metropolitan Statistical Areas (MSAs) and any non-metropolitan area counties, which provides the Department with the most comprehensive set of data upon which to estimate the average rental payments for housing. Because 56 percent of U.S. crop workers interviewed for the 2021-2022 NAWS reported living in housing rented from someone other than their employer (e.g., non-employer or non-relative), the Department can conclude that FMRs available through HUD represents the most reasonable source of housing data to use in computing an annual adverse compensation adjustment under this IFR.

\177\ Fair Market Rents (FMRs) are used to determine payment standard amounts for the Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, initial rents for housing assistance payment (HAP) contracts in the Moderate Rehabilitation Single Room Occupancy program (Mod Rehab), rent ceilings for rental units in both the HOME Investment Partnerships program and the Emergency Solutions Grants program, maximum award amounts for Continuum of Care recipients and the maximum amount of rent a recipient may pay for property leased with Continuum of Care funds, and flat rents in Public Housing units. For a more information, see the HUD Office of Policy Development and Research website at https://www.huduser.gov/portal/datasets/fmr.html. (last visited August 11, 2025).

The Department notes that HUD publishes population-weighted FMR's for one-bedroom, two-bedroom, three-bedroom or four-bedroom housing units covering all MSA and non-MSA areas. The Department is adopting FMRs associated with 4-bedroom housing units with a reasonable assumption of 2 beds per room for a maximum occupancy capacity of 8 individuals. The selection of this housing unit size and capacity is consistent with the average occupancy per housing unit in the H-2A program. Based on an analysis of H-2A housing data associated with labor certification applications processed from FY 2020 through FY 2024, the average occupancy capacity per housing unit, which includes all forms of housing, was approximately 7 to 8 individuals.\178\ The adjustment value per week will be calculated by dividing the applicable weighted average statewide FMR (at the 50th percentile) by 4.345 (average number of weeks per month), and then the proceeding value will be divided by 8 (assumption of two workers per bedroom in a four- bedroom home). The adjustment per worker per week will then be divided by 40 hours (industry adopted standard work week) to arrive at the hourly adjustment rate. This hourly adjustment rate will be subtracted from the appropriate AEWR (depending on state, SOC code, and experience level) to arrive at the final hourly rate to be applied each pay period. In addition, the Department is adopting an average FRM across each state because employer-provided housing for workers employed under temporary agricultural labor certifications are commonly located in non-metropolitan and metropolitan statistical areas. For example, among employers in the 10 largest states employing H-2A workers during FY 2024, more than 67 percent of all housing units used to house approximately 60 percent of all H-2A workers were located in metropolitan statistical areas while the remaining 33 percent were located in rural non-metropolitan statistical areas.\179\

\178\ Based on OFLC public disclosure data, the Department has computed the following: FY 2020, 15,191 housing records covering 45,552 units at 379,114 occupancy capacity for an estimated 8 persons per unit; FY 2021, 19,212 housing records covering 74,367 units at 472,506 occupancy capacity for an estimated 6 persons per unit; FY 2022, 22,299 housing records covering 77,088 units at 536,238 occupancy capacity for 7 persons per unit; FY 2023, 22,716 housing records covering 67,515 units at 528,784 occupancy capacity for 8 persons per unit; and FY 2024, 26,998 housing records covering 77,464 units at 600,582 occupancy capacity for 8 persons per unit. See https://www.dol.gov/agencies/eta/foreign-labor/performance (last visited August 11, 2025).

\179\ During FY 2024, more than 67 percent of all certified H-2A worker positions and employer-provided housing for these workers were in metropolitan statistical areas across the following 10 largest states using the H-2A program: Florida (75 percent or 11,979 units with a maximum occupancy of 90,837 persons); Georgia (12 percent or 342 units with a maximum occupancy of 4,698 persons); California (97 percent or 3,765 units with a maximum occupancy of 21,716 persons); Washington (71 percent or 9,661 units with a maximum occupancy of 74,112 persons); North Carolina (51 percent or 3,062 units with a maximum occupancy of 30,398 persons); Michigan (49 percent or 1,437 units with a maximum occupancy of 11,787 persons); Louisiana (71 percent or 847 units with a maximum occupancy of 9,804 persons); Texas (19 percent or 413 units with a maximum occupancy of 2,123 persons); Arizona (97 percent or 2,549 units with a maximum occupancy of 13,579 persons); and New York (79 percent or 831 units with a maximum occupancy of 8,196 persons). Based on an analysis of public H-2A labor certification records from the DOL Office of Foreign Labor Certification at https://www.dol.gov/agencies/eta/foreign-labor/performance.

Although precise and local market-based data specific to the costs of temporary agricultural housing in rural areas is limited, the Department believes that the FMRs serve as a reasonable proxy for estimating housing costs. While FMRs vary across any given state, most agricultural workers are typically mobile across a wide area of intended employment, which often covers a number of counties, and the complexities associated with estimating multiple local area based FMRs would make such an option almost impracticable for the Department to administer and enforce. Of note, HUD publishes the FMRs at both the 40th and 50th percentiles. Although HUD utilizes the 40th percentile for purposes of administering its housing voucher programs, the Department has chosen in this IFR to use the statewide average of

the 50th percentile FMRs, as calculated by HUD, and weighted based on state population. This methodological approach reasonably reflects the central tendency of FMRs across a given state without being influenced by outliers in certain local or regional area housing costs and is an easily understood statistical concept. As such, the Department proposes using a statewide average FMR to set a uniform “adverse effect adjustment” to the AEWRs. This will provide H-2A employers within a given state or region, with a predictable, consistent rate that better accounts for non-wage compensation.

The Department recognizes that 20 CFR 655.122(d)(1) currently requires that employers “provide housing at no cost to the H-2A workers and those workers in corresponding employment who are not reasonably able to return to their residence within the same day.” Unlike the statute's express mandate that the Secretary deny labor certification to employers who fail to provide workers' compensation insurance at no cost to the worker, no similar statutory mandate exists with respect to the provision of housing. Compare 8 U.S.C. 1188(b)(3) with 8 U.S.C. 1188(c)(4). Rather, Section 218(c)(4) of the INA, 8 U.S.C. 1188(c)(4), requires only that H-2A employers “furnish housing in accordance with regulations” and permits them to satisfy this obligation either by providing housing that meets applicable Federal temporary labor camp standards or by securing housing that meets local rental or public accommodation standards. The statute does not expressly require that such housing be provided at no cost to the worker as a condition of labor certification.

However, given the evidence presented in this IFR that U.S. workers face adverse effect in their wages relative to H-2A workers who are provided housing at no charge, the Department is adopting a standard adjustment factor to the AEWRs to account for this non-monetary compensation benefit. The Department clarifies that this downward AEWR adjustment factor, computed annually for each State under 20 CFR 655.120(b)(3), is not inconsistent with Sec. 655.122(d)(1). The adjustment does not authorize an employer to charge workers rent or otherwise deduct housing costs from the wages of H-2A workers or of workers in corresponding employment who are not reasonably able to return to their residence within the same day. Rather, it ensures that the AEWR reflects the value of this non-wage compensation benefit, so that the effective level of compensation does not create adverse effect on the wages of U.S. workers similarly employed, consistent with 8 U.S.C. 1188(a)(1)(B).

In adopting this approach, the Department also invites public comment on whether the regulatory “no cost” mandate under Sec. 655.122(d)(1) remains appropriate in light of the rising costs and other obstacles (e.g., zoning restrictions, permits) faced by employers in locating sufficient and affordable worker housing. The Department also seeks comment on whether alternative approaches would better align with the statutory text while continuing to ensure that the wages of U.S. workers similarly employed are not adversely affected by the employment of H-2A workers.

Under the 2023 AEWR Final Rule, the OFLC Administrator was required to 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 OFLC Administrator published the updated AEWRs through two announcements in the Federal Register, one for the FLS-based AEWRs (i.e., effective on or about January 1) and a second for the OEWS-based AEWRs (i.e., effective on or about July 1), due to the different time periods for release of these two wage surveys. The publication of two distinct AEWR updates within a single calendar year cycle, combined with other regulatory requirements (e.g., payment of the highest AEWR across all applicable SOC codes regardless of time spent performing any duty), created burden and costs on some employers with respect to their wage obligations to workers.

Given the policy decision to determine the AEWRs for all H-2A job opportunities using occupational wage data reported by the OEWS, the Department will now simplify publication of the updated AEWRs for non- range occupations through a single Federal Register Notice on or about July 1 each year. Although the Department typically discloses updated OEWS data on the BLS website in May each year, the BLS requires a short amount of time to create customized wage data files that are required by the OFLC Administrator to administer the revised AEWR methodology in this IFR and the prevailing wage requirements covering other immigrant and nonimmigrant employment-based visa programs.

In addition, with the adoption of an annual statewide AEWR compensation adjustment for housing that is provided to H-2A workers at no charge, the Department will align the timeframes for obtaining the FMR data from HUD and computing the statewide equivalent hourly rates for publication in the same notice in the Federal Register as the AEWRs. Accordingly, the Department has made minor modifications to 20 CFR 655.120(b)(4) to state that the OFLC Administrator will publish a notice in the Federal Register, at least once in each calendar year, on a date to be determined by the OFLC Administrator, establishing each AEWR and corresponding housing compensation adjustment for each State that will become effective as of the date of publication of the notice in the Federal Register.

The Department invites comments on all aspects of the AEWR methodology changes contained in this IFR. In particular, the Department is interested in comments on the use of the OEWS and the combined use of occupational wages collected for farm and non-farm establishments through the OEWS, determining the AEWRs at two skills levels based on job qualifications and the thresholds (the lower one- third and the average wage); the conditions for assigning the most representative SOC code based on the primary and directly and closely related duties and qualifications contained in the employer's job offer, including any alternative sources of reliable and comprehensive occupational information beyond the O*NET system; modifying the most common field and livestock workers (combined) occupations for assigning a single AEWR by removing SOC code 45-2099, Agricultural Workers All Other; and the use of a non-wage compensation factor, the specifications for adopting a standard non-wage compensation adjustment factor to the AEWR that employers may offer only to H-2A workers provided housing at no charge, the data source used to establish the adjustment factor, and the level at which the adjustment factor has been sent. Comments supported by reliable and objective data or other quantifiable studies will be more helpful to the Department in drafting a final rule than comments consisting of qualitative anecdotal evidence. The Department is open to making changes in the final rule based on the comments it receives on this IFR.

To the extent that any portion of this IFR is declared invalid or unenforceable by a court, the Department intends for all other parts of this IFR that can operate in the absence of the specific portion that has been invalidated, to remain in effect. Thus, the Department notes that the existing severability clause under 20 CFR 655.190 \180\ applies because each provision within this IFR is capable of operating independently from one another. The assignment of the SOC code(s) for the employer's job opportunity specified at 20 CFR 655.120(b)(7), which involves a comparison the duties and qualifications contained in the job order to the SOC definitions, skill requirements, and tasks that are listed in the O*NET system, is an independent assessment performed by the SWA and the CO before determining the applicable AEWR and that assessment has no impact on the actual computation of the AEWRs by the BLS. Further, computation of the AEWRs at two skill levels, as specified in 20 CFR 655.120(b)(2), using the OEWS survey is a statistical process conducted by the BLS annually that is independent of any other provision contained in this IFR. And finally, the standard adjustment factor to the AEWRs specified at 20 CFR 655.120(b)(3) is based on annual data obtained from HUD and used to independently compute an equivalent hourly rate based on the weighted statewide average of FMRs for a four-bedroom housing unit. The implementation of these statewide equivalent hourly rate adjustments, which apply only to the minimum wages offered to H-2A workers, has no influence on the assignment of the SOC code(s) by the SWA and the CO for the employer's job opportunity and does not affect the computation of the AEWRs by the BLS.

\180\ The Department acknowledges that it has proposed retaining the severability provision in the Notice of Proposed Rulemaking, Recission of Final Rule: Improving Protections for Workers in Temporary Agricultural Employment in the United States, published July 2, 2025. 90 FR 28919. The Department will review any relevant comments received in connection with that NPRM and, prior to finalizing, will consider whether any changes or amendments need to be made to the provision. As described below, however, the existing 655.190 applies to this IFR because each provision is capable of operating independently from one another.

Thus, even if a court decision invalidating a portion of this IFR results in a partial reversion to the current regulations or to the statutory language itself, the Department intends that the rest of this IFR continue to operate, to the extent possible, in tandem with the reverted provisions, as specified in 20 CFR 655.190. It is the Department's intent that the remaining provisions of the regulations should continue in effect if any provision or provisions are held to be invalid or unenforceable. It is of great importance to the Department and the regulated community that even if a portion of this IFR were held to be invalid or unenforceable that the larger program could operate consistent with the expectations of employers and workers.

Under E.O. 12866, the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB) determines whether a regulatory action is significant and, therefore, subject to the requirements of the Executive Order and review by OMB. Regulatory Planning and Review, 58 FR 51735 (Oct. 4, 1993). Section 3(f) of E.O. 12866 defines a “significant regulatory action” as an action that is likely to result in a rule that may: (1) have an annual effect on the economy of $100 million or more, or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public+ health or safety, or State, local, or Tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlement, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. A regulatory impact analysis (RIA) must be prepared for a regulatory action that is significant under section 3(f)(1). OIRA has reviewed this rule and designated it a significant regulatory action under 3(f)(1) of E.O. 12866.

The Secretary of Homeland Security, in consultation with the Secretary of Labor and Secretary of Agriculture, has approved this rule consistent with section 301(e) of the Immigration Reform and Control Act of 1986, 8 U.S.C. 1188.\181\

\181\ Although this provision vests approval authority in the “Attorney General,” the Secretary of Homeland Security now may exercise this authority. See 6 U.S.C. 202(3)-(4), 251, 271(b), 291, 551(d)(2), 557; 8 U.S.C. 1103(c) (2000).

E.O. 13563 directs agencies to, among other things, 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. Improving Regulation and Regulatory Review, 76 FR 3821, 3821 (Jan. 21, 2011), E.O. 13563 recognizes that some costs and 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. Id.

This IFR also furthers the goals of E.O. 14192, Unleashing Prosperity Through Deregulation.\182\ In relevant part, the E.O. articulates the executive branch policy to “be prudent and financially responsible in the expenditure of funds, from both public and private sources, and to alleviate unnecessary regulatory burdens placed on the American people.” This executive branch policy is advanced by federal agencies reassessing their regulations and eliminating unnecessary and burdensome requirements that are not squarely authorized by Federal law to “significantly reduce the private expenditures required to comply with Federal regulations to secure America's economic prosperity and national security and the highest possible quality of life for each citizen.” \183\ Specifically, the E.O. directs federal agencies, including the Department, to “ensure that the total incremental cost of all new regulations, including repealed regulations, being finalized this year, shall be significantly less than zero, as determined by the Director of the Office of Management and Budget (Director), unless otherwise required by law or instructions from the Director.” \184\ This IFR is expected to be an E.O. 14192 deregulatory action, generating $$246 million in annual cost savings (taking the form of reduced deadweight loss). The primary purpose of this IFR is to implement or interpret the immigration laws of the United States (as described in section 101(a)(17) of the INA, 8 U.S.C. 1101(a)(17)) or any other function

performed by the United States Federal Government with respect to aliens.\185\

\182\ See 90 FR 9065 (Jan. 31, 2025).

\183\ Id. sec. 1.

\184\ Id. sec. 3(b).

\185\ See OMB Memorandum M-25-20, Guidance Implementing Section 3 of Executive Order 14192, titled “Unleashing Prosperity Through Deregulation” at 5-6 (Mar. 26, 2025).

The Department estimates that the IFR will result in costs and transfers. It also anticipates the IFR will generate economic benefits that substantially outweigh these costs. As shown in Exhibit 1, the IFR will impose an annualized cost of $0.78 million and a total 10-year cost of $0.55 million (7 percent discount rate). The IFR will generate annualized transfers from H-2A workers to H-2A employers of $2.46 billion and total 10-year transfers of $17.29 billion (7 percent discount rate).

Exhibit 1--Estimated Monetized Costs and Transfers of the Final Rule

[$2025 millions]

Costs Transfers

Undiscounted 10-Year Total................... $0.55 $24,157.10 10-Year Total with a Discount Rate of 3 0.55 20,781.20

percent..................................... 10-Year Total with a Discount Rate of 7 0.55 17,296.86

percent..................................... 10-Year Average.............................. 0.05 2,415.71 Annualized at a Discount Rate of 3 percent... 0.06 2,436.23 Annualized with at a Discount Rate of 7 0.08 2,462.68

percent.....................................

The total cost of the IFR reflects only rule familiarization. Transfers arise from changes to the AEWR methodology, specifically establishing new AEWRs for non-range H-2A occupations based on employee skill level, and adjustments for employer-provided housing. See the costs and transfers subsections below for a detailed explanation.

The Department expects the IFR to generate significant economic benefits well in excess of familiarization costs. Assuming a relatively elastic supply of H-2A labor for the relevant wage ranges,\186\ the Department estimates that the IFR's lower AEWR would lead farmers to hire approximately 119,000 additional H-2A workers producing $0.2 billion in annual economic benefits resulting from new, mutually beneficial transactions that otherwise would not have occurred. In other words, the Department anticipates substantial incompletely- quantified benefits, including avoiding crop losses, preserving farm viability, stabilizing the food supply, supporting rural economies, and facilitating workforce transition.

\186\ The supply of H-2A workers is considered highly elastic because the Adverse Effect Wage Rate (AEWR) offered in the United States is significantly higher than the wages these workers could earn in their home countries for similar work. This large wage differential creates a strong incentive for foreign agricultural workers to enter the U.S. labor market whenever positions are available. Economists routinely and uncontroversially assume perfect elasticity of labor when assessing the effect of AEWRs. See, e.g., Zachariah Rutledge, et. al, Adverse Effect Wage Rates and US Farm Wages, Amer. J. of Agr. Econ. June 9, 2025, available at: https://onlinelibrary.wiley.com/doi/10.1111/ajae.12557.

As discussed above, Executive Order 14159 directs agencies to “employ all lawful means to ensure the faithful execution of the immigration laws of the United States against all inadmissible and removable aliens,” including those who entered illegally, lack lawful status, or are subject to final orders of removal.

Agricultural employers are facing immediate challenges due to the expected lack of availability of illegal aliens. According to the Department's National Agricultural Worker Survey (NAWS) \187\ agricultural employers are disproportionately dependent on illegal aliens: approximately 42 percent of crop workers reported lacking authorization to work in the United States during FY 2021-2022. With illegal border crossings at record lows--agricultural employers, who have historically been incentivized to rely on such workers because of high AEWRs mandated to use the H-2A program, will experience economic harm caused by mounting labor shortages.

\187\ Findings from the National Agricultural Workers Survey (NAWS) 2021-2022: A Demographic Employment Profile of United States Crop Workers (Sept. 2023). U.S. DOL, Employment and Training Administration. Available at: https://www.dol.gov/sites/dolgov/files/ETA/naws/pdfs/NAWSResearchReport17.pdf.

In addition, the Department does not believe American workers currently unemployed or even marginally employed will make themselves readily available in sufficient numbers to replace the departing illegal aliens. The supply of American agricultural workers is limited by structural factors including the geographic distribution of agricultural operations, and the seasonal nature of certain crops, and the relatively low unemployment rate.\188\ Furthermore, agricultural work requires a distinct set of skills and is among the most physically demanding and hazardous occupations in the U.S. labor market. These essential jobs involve manual labor, long hours, and exposure to extreme weather conditions--particularly in the cultivation of fruit, tree nuts, vegetables, and other specialty crops for which production cannot be immediately mechanized. Based on the Department's extensive experience administering the H-2A temporary agricultural visa program, the available data strongly demonstrate--even absent intensified enforcement--a persistent and systemic shortage of qualified and eligible American workers.

\188\ See Diane Charlton, (“The Farm Workforce Modernization Act and warnings from previous immigration reforms, Applied Economic Perspectives, August 2023, at pp. 6-7, The Farm Workforce Modernization Act and warnings from previous immigration reforms).

Despite efforts to broadly advertise agricultural jobs as required by regulation, the most recent data confirm that domestic applicants are not applying in sufficient numbers to meet employer demand. Thus, based on the available evidence, the Department concludes that qualified and eligible U.S. workers--whether unemployed, marginally employed, or employed and seeking work in agriculture--will not make themselves immediately available in sufficient numbers to avert the potential adverse consequences to the stability of the United States food supply and irreparable economic harm to agricultural employers as the illegal alien labor force decreases. 4. Analysis a. Analysis Considerations

The Department estimated the costs and transfers associated with the IFR relative to the existing baseline, which reflects current practices under the H-2A program as stipulated in 20 CFR part 655, subpart B and 29 CFR part 501. The existing baseline aligns with the 2023 AEWR Final Rule,\189\ which uses the average annual hourly wage for field and livestock workers (combined) as determined by the U.S. Department of Agriculture's (USDA) Farm Labor Survey (FLS). Furthermore, the AEWRs are established using statewide or national average annual hourly wages derived from the Bureau of Labor Statistics (BLS) Occupational Employment and Wage Statistics (OEWS) program, particularly for non-

range agricultural occupations that are underrepresented or inadequately reported by the FLS.

\189\ There is virtually no difference between aligning the baseline with the 2023 AEWR Final Rule versus the 2010 AEWR as baseline because they used the same methodology to set the AEWR for the vast majority of job. Under the recently vacated 2023 AEWE, which still appears in the E-CFR, 98 percent of H-2A jobs would continue to be assigned the FLS-based AEWR and a few high-skilled agricultural jobs would be subject to the OEWS-based AEWR.

In accordance with the regulatory analysis guidance specified in OMB's Circular A-4 and consistent with methodologies used in prior rulemakings, this analysis emphasizes the probable effects of the IFR, particularly concerning costs and transfers borne by affected entities. The analysis encompasses a ten-year period (2025 through 2034) to adequately capture significant costs and transfers that may manifest over time. The Department expresses all quantifiable impacts in 2025 dollars, using discount rates of 3 percent and 7 percent, as prescribed by Circular A-4.

Exhibit 2--Number of Affected Entities by Type

[CY 2015-2024 average]

Entity type No.

Annual unique H-2A applicants.......................... 8,530

The implementation of the IFR will result in new AEWR wage rates for certain Standard Occupational Classification (SOC) codes and geographic combinations, diverging from the baseline. H-2A employers will need to revise payroll systems to incorporate these new AEWR wage rates. The Department does not quantify

this cost, anticipating it to be de minimis, as employers must already update payrolls in response to the annual release of AEWR wage rates. Consequently, employers are adequately equipped to make these updates swiftly and at minimal cost when AEWR wage rates change.

Furthermore, the IFR may incur additional transition costs for certain employers in terms of recruitment and training if they choose to hire U.S. workers for positions traditionally filled by H-2A workers. Transfers Associated With the AEWR Housing Adjustment

This section outlines the transfers resulting from IFR revisions to the AEWR wage structure. Transfers are defined as reallocation of payments between groups without changing total societal resources. (or, if resources do change, it is through incentive effects captured through more extensive analysis). Specifically, this analysis identifies wage transfers from H-2A workers to U.S. employers, resulting from the changes outlined in this IFR.

As articulated in Section 218(a)(1) of the Immigration and Nationality Act (INA), codified at 8 U.S.C. 1188(a)(1), the admissibility of an H-2A worker is contingent upon the Secretary of Labor's determination 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 compliance with this statutory requirement, the Department, per 20 CFR 655.120(a) and 655.122(l), mandates that employers offer and pay a wage that is the highest among the AEWR, the prevailing wage, the agreed-upon collective bargaining wage, the Federal minimum wage, or the State minimum wage. The IFR maintains this broad wage-setting framework but introduces modifications to the methodology employed in establishing AEWRs.

Another source of transfers arises from the Department's implementation of a downward adjustment to the hourly AEWR to account for the disparity in compensation between U.S. workers and H-2A workers, the latter of whom receive non-wage compensation in the form of employer-provided lodging.

To address this disparity, the Department established a standardized AEWR adjustment factor reflecting the value of employer- provided housing. The calculation for the housing adjustment is derived from annual fair market rents data published by the U.S. Department of Housing and Urban Development (HUD).\194\ Since HUD releases this data by county, the Department utilizes county population weights to derive statewide average Fair Market Rents (50th Percentile Rents). Exhibit 5 demonstrates the Department's methodology using 2014 housing figures as an example. The Department's approach assumes an occupancy of 8 individuals in a four-bedroom accommodation and 172 hours worked per worker on average per month.

\194\ https://www.huduser.gov/portal/datasets/fmr.html.

Exhibit 5--Housing Adjustment Example

[$2025]

Fair market rent (4- Monthly hours Hourly housing

Year bedroom unit) ($) Number of occupants worked adjustment ($)

(a) (b) (c) d = a/(b*c)

2014........................... $1,390 8 172 $1.07

Utilizing the aforementioned formula, the estimated hourly employer compensation from the housing premiums for the fiscal years 2014 through 2024 are presented in Exhibit 6.

Exhibit 6--Annual Housing Premium by Year

[FYs 2014-2024 $2025]

Baseline annual

Year Hourly national AEWRs

housing ($) ($) \195\

2014.................................... 1.07 10.54 2015.................................... 1.12 10.83 2016.................................... 1.17 11.32 2017.................................... 1.24 11.73 2018.................................... 1.29 11.99 2019.................................... 1.35 12.58 2020.................................... 1.43 13.25 2021.................................... 1.48 13.79 2022.................................... 1.54 14.63 2023.................................... 1.70 15.81 2024.................................... 1.89 16.66

To project total housing premiums, the Department multiplied the hourly housing cost by the total number of certified H-2A workers, calculated over 40 hours per week for 26 weeks.\196\ The preliminary estimate for the total housing premium in 2024 is approximately $729 million. To project future housing transfers, the Department applied an ARIMA model, utilizing data from the H-2A program spanning FY 2014 to 2024.\197\ The forecast incorporates geometric growth rates derived from certified H-2A workers and applications. Each model specification is fitted to historical data to generate out-of-sample forecasts for the subsequent decade. The compound annual growth rate (CAGR) for each model is computed between the first forecast year (2025) and the last (2034), and the average CAGR across all models is taken to smooth out model-specific discrepancies, providing a singular and robust estimate of anticipated long-term growth. The average growth rate is then applied to the most recent observed value (2024) using the formula:

\195\ The Department calculated Average Annual AEWRs using annual reported state AEWRs reported in the Federal Register and weighing the state-level figures based on the number of certified H- 2A workers in each state to create a national estimate. For example, see. Federal Register, Labor Certification Process for the Temporary Employment of Aliens in Agriculture in the United States: 2014 Adverse Effect Wage Rates.

\196\ 40 represents the average number of hours worked per week and 26 the average duration of work (in weeks) of an H-2A worker.

\197\ To forecast future housing costs, we estimate a set of ARIMA models with alternative lag structures: (0,2,0), (0,2,1), (0,2,2), (1,2,1), (1,2,2), (2,2,2).

Future Valuet = Base Value2024 x (1 + r)t-2024

Where r signifies the average CAGR. This methodology results in a consistent projection path for 2025-2034 that reflects the central tendency of the ARIMA forecasts while maintaining smooth year-to-year progressions. The results indicate an average CAGR of 6.56 percent for housing and 3.34 percent for workers.

Exhibit 7--Estimated Annual Housing Transfers by Year

[FYs 2025-2034 $2025)]

Estimated hourly Estimated H-2A Estimated housing

Year housing ($) workers certified transfers ($)

2025............................................. 2.00 383,210 798,987,601 2026............................................. 2.13 395,996 877,978,389 2027............................................. 2.27 409,209 964,778,490 2028............................................. 2.41 422,863 1,060,159,962 2029............................................. 2.56 436,973 1,164,971,190 2030............................................. 2.73 451,554 1,280,144,432 2031............................................. 2.90 466,620 1,406,704,115 2032............................................. 3.08 482,190 1,545,775,944 2033............................................. 3.28 498,279 1,698,596,914 2034............................................. 3.49 514,905 1,866,526,315

The Department employed multiple ARIMA models across the dataset, assessed fit using standard metrics, and found consistent results across specifications. The total estimated housing transfer over a ten- year period is approximately $12.66 billion (undiscounted), with discounted values at $10.88 billion (3%) and $9.03 billion (7%). The annualized transfer over this period totals approximately $1.28 billion (3%) and $1.29 billion (7%).

The second category of transfers arises from modifications to the AEWR methodology to account for qualifications specified in employers' job offers. The existing baseline aligns with the 2023 AEWR Final Rule, which uses the average hourly gross wage for field and livestock workers (combined) as determined by the U.S. Department of Agriculture's (USDA) Farm Labor Survey (FLS). The Department believes that this revised approach provides a more consistent, market-based assessment of wages paid to similarly employed U.S. workers. Under this policy, the Department will establish AEWRs for H-2A positions using the state or territorial average hourly wage, separated into two qualification levels: Skill Level I (Entry-Level) and Skill Level II (Experience-Level).

This dual-skill level policy seeks to approximate average wages paid to U.S. workers engaged in similar occupations within the relevant geographic area based on the qualifications specified in the employers' job offers for which H-2A workers are sought for temporary agricultural labor certification. Skill Level I AEWR corresponds with entry-level positions where workers are expected to have no formal education or specialized training. Conversely, Skill Level II AEWR corresponds with offers requiring qualifications reflective of experienced or trained employees.

To estimate total wage transfers, the Department used OEWS state wage data. The analysis first estimated the mean of the lower third of the wage distribution, which may approximately equal the 17th percentile. Since the Bureau of Labor Statics does not publish the 17th percentile data directly, an approximation is calculated using a linear interpolation between the 10th and 25th percentile. Therefore, the full wage for the entry level is calculated as follow: [GRAPHIC] [TIFF OMITTED] TR02OC25.010

Where H10 and H25 are equal to the 10th and 25th percentile.

The experienced-worker wage is determined as the difference between the baseline AEWR and the mean wage:

WageExperience = AEWR-HMEAN

The overall total wage is a weighted average of these entry-level and experienced wages, with 92% weight on the entry-level wage and 8% on the experienced-worker wage:

Total Wage = 0.92 x WageENTRY + 0.08 x WageExperience

We chose 92% given the fact that roughly 92% of all H-2A Visas were paid the AEWR.

We then assume the other 8% would be paid the higher wage level.

Exhibit 8--Wage Transfer Estimates

[$2025]

Total H-2A

Year workers Hourly wage Hourly wage Hourly wage Total wage

certified entry ($) experience ($) total ($) transfers ($)

2014............................ 137,601 1.96 -0.73 1.74 249,400,656 2015............................ 162,156 2.02 -0.69 1.80 304,092,787 2016............................ 194,595 2.15 -0.52 1.94 392,496,418

2017............................ 232,230 2.20 -0.56 1.98 477,327,411 2018............................ 262,791 2.18 -0.81 1.94 530,625,900 2019............................ 271,686 2.49 -0.68 2.23 631,308,989 2020............................ 283,845 2.55 -0.52 2.30 679,910,519 2021............................ 315,695 2.30 -0.66 2.06 676,814,801 2022............................ 355,894 1.82 -1.24 1.58 583,474,128 2023............................ 366,995 2.02 -1.02 1.77 677,384,528 2024............................ 370,836 2.13 -0.89 1.89 727,237,161

Wage transfers for 2024 are approximately $727 million. Forecasting for subsequent years, the Department applied the same methodology to project H17, HMEAN and AEWR with respective CAGRs of 4.1, 3.9, and 4.15 percent, respectively.

Exhibit 9--Projected Wage Transfer Estimates

[$2025]

Estimated total

Year Estimated H-2A Estimated wage Estimated wage Estimated wage wage transfers

workers certified entry ($) experience ($) total ($) ($)

2025......................................................... 383,210 2.21 -0.90 1.96 783,018,058 2026......................................................... 395,996 2.32 -0.90 2.06 847,914,598 2027......................................................... 409,209 2.42 -0.89 2.16 918,150,315 2028......................................................... 422,863 2.53 -0.89 2.26 994,161,745 2029......................................................... 436,973 2.65 -0.88 2.37 1,076,420,926 2030......................................................... 451,554 2.77 -0.87 2.48 1,165,438,271 2031......................................................... 466,620 2.90 -0.85 2.60 1,261,765,674 2032......................................................... 482,190 3.03 -0.84 2.72 1,365,999,865 2033......................................................... 498,279 3.17 -0.82 2.85 1,478,786,038 2034......................................................... 514,905 3.32 -0.80 2.99 1,600,821,767

The total estimated skill-level wage transfer over the ten-year period is projected at approximately $11.5 billion (undiscounted), with discounted values of $939 billion (3%) and $8.26 billion (7%). Annualized transfers are $1.16 billion (3%) and $1.176 billion (7%).

Exhibit 10--Total Transfers

[$2025]

Estimated total Estimated total

Year housing transfers wage transfers Estimated total

($) ($) transfers ($)

2025................................................. 798,987,601 783,018,058 1,582,005,658 2026................................................. 877,978,389 847,914,598 1,725,892,987 2027................................................. 964,778,490 918,150,315 1,882,928,805 2028................................................. 1,060,159,962 994,161,745 2,054,321,707 2029................................................. 1,164,971,190 1,076,420,926 2,241,392,116 2030................................................. 1,280,144,432 1,165,438,271 2,445,582,703 2031................................................. 1,406,704,115 1,261,765,674 2,668,469,789 2032................................................. 1,545,775,944 1,365,999,865 2,911,775,809 2033................................................. 1,698,596,914 1,478,786,038 3,177,382,952 2034................................................. 1,866,526,315 1,600,821,767 3,467,348,082

Results indicate average annual undiscounted transfers of $2.42 billion. Over 10 years, transfers total $24.16 billion undiscounted, or $20.78 billion (3%) and $17.3 billion (7%). Annualized totals are $2.43 billion (3%) and $2.46 billion (7%).

The decrease (or increase) in the AEWRs also represents a wage transfer from corresponding workers, not only H-2A workers. However, the Department lacks sufficient information about the number of corresponding workers or their wage structures to measure these impacts.\198\ Recruitment

reports submitted for certification cover only the initial recruitment period (through 50% of the contract period) and do not capture all potentially affected workers already employed.

\198\ The Department considers corresponding workers to be U.S. workers employed by an H-2A employer in any work included in the ETA-approved job order or in any agricultural work performed by the H-2A workers during the period of the job order. U.S. workers may include individuals who are either born in the United States, or individuals who are naturalized U.S. citizens. Authorized workers in the H-2A program refers to either a U.S. citizen/national, a lawful permanent resident, or a foreign national who is not an “unauthorized alien” and holds a valid H-2A visa classification. Unauthorized workers are individuals who are not legally permitted to work in the United States under the H-2A program.

Because available data are limited, the Department cannot reasonably quantify transfer impacts to corresponding workers. Likewise, it cannot estimate how much of the transfer remains within the U.S. economy, although it is likely that a substantial share does, as employers reinvest in land, equipment, crop diversification, and local supply chain activities.

The Department invites comments on data sources or methods to better estimate corresponding worker impacts and transfer effects under the revised AEWR methodology. Quantitative Benefits Analysis

The Department further expects the IFR to generate substantial economic benefits that exceed familiarization costs. To quantify these benefits, the Department must adopt several key assumptions. First, the Department assumes that lowering the AEWR increases H-2A employment-- growers employ more H-2A workers when the cost of doing so falls because the demand for H-2A labor can be assumed to be downwardly sloped.\199\ Given the large wage differential between U.S. farm jobs and typical wages in workers' home countries, the supply of foreign labor can reasonably be modeled as perfectly elastic at the competitive wage. In this framework, lowering the AEWR does not reduce labor supply, but instead allows employers to hire more workers.\200\ Second, we assume that farms can expand output along a linear demand curve (see diagram below); diminishing marginal returns on a fixed farm reflect the sector's capacity to expand production when affordable labor is available. Under these assumptions lower wages would translate into new employment opportunities for H-2A workers. The associated increase in output can be estimated by applying an empirical estimate of demand elasticity.

\199\ See, Zachariah Rutledge, et. al, Adverse Effect Wage Rates and U.S. Farm Wages, Amer. J. of Agr. Econ. June 9, 2025, available at: https://onlinelibrary.wiley.com/doi/10.1111/ajae.12557.

\200\ See Paik, Song YI. 2021. The impacts of agricultural minimum wage on U.S. agricultural employment. [GRAPHIC] [TIFF OMITTED] TR02OC25.011

We have assumed perfect elasticity of labor supply and a long-run labor demand elasticity of -0.8, and seek comment on whether this figure is realistic. lowering the AEWR from $17.35 to $13.38 would raise projected employment from about 383,000 to 502,000 workers, an increase of roughly 119,000 workers. To get the total number of increased workers following formula is used (where AEWRavg is the average of AEWRnew and AEWRold): Increased workers = 1 -0.8[middot](Projected workers)[middot](AEWRnew-AEWRold)/ AEWRavg:

Given the new AEWR change of $3.97/hour (= $17.35/hour-$13.38/ hour), the net deadweight loss reduction per worker-hour would be approximately $1.99.\201\ Multiplying by the additional 123 million hours yields an estimated annual benefit of $246 million.

\201\ This estimate reflects a linear demand curve, as diagrammed above, and would have a tendency toward overstatement of deadweight loss if the underlying demand curve is instead non- linear.

The same effect could, alternatively, be quantified with a more itemized approach, estimating revenue changes and then subtracting off various categories of opportunity cost associated with the production process that ultimately yields the sales revenue.

Under a standard 40-hour workweek and a 26-week employment schedule, an increase of 119,000 H-2A workers corresponds to an additional 123 million hours of farm labor. According to MacDonald et al. (2018),\202\ specialty crop farms in 2015 required 14.4 hours of labor to generate $1,000 in sales, implying an average revenue of about $69 per labor hour. An additional 123 million hours of farm labor each year could therefore produce $8.54 billion in additional farm revenue. This revenue estimate may have a tendency toward understatement, as cash grain farms are approximately 288% more productive per hour than specialty crop farms.\203\ Itemized estimates of associated production- process costs are not available for this alternative quantification's necessary next step of subtraction.

\202\ MacDonald, J.M., Hoppe, R.A., & Newton, D. (2018). Three decades of consolidation in U.S. agriculture. Economic Information Bulletin. https://doi.org/10.22004/ag.econ.276247.

\203\ Id.

Extended (Qualitative) Discussion of Benefits

The Department also anticipates several significant benefits. that are incompletely quantified due to the use, above, of a long-run labor demand elasticity. The first is the avoidance of irreversible crop losses. By potentially lessening near-term wage spikes that can render hiring prohibitively expensive, farms are better positioned to maintain adequate staffing levels during crucial planting, growing, and harvesting periods. This reduces the risk of irreversible crop destruction and protects food security.

The rule also plays a vital role in the preservation of farm viability. By mitigating unsustainable short-term wage increases, the rule can help prevent farm closures, bankruptcies, and asset liquidations--particularly for small and mid-sized operations that often lack substantial financial reserves. Maintaining farm stability preserves agricultural diversity.

Furthermore, the adjustment contributes to the stabilization of food supply chains. Ensuring that agricultural production remains uninterrupted supports not only farmers but also downstream industries, including food processing, transportation, and retail. This continuity is essential for minimizing the likelihood of shortages, price volatility, and disruptions throughout the supply chain, which can affect consumers and businesses alike.

The IFR also offers significant support for rural economies. By preventing sudden contractions in farm payrolls, the rule helps sustain local spending, tax revenues, and business activity, vital to rural communities.

Lastly, the IFR facilitates an orderly workforce transition. By moderating wage adjustment, the rule provides time for farms to recruit, relocate, and train authorized domestic workers without destabilizing production. This aligns with the long-term goal of fostering a fully authorized agricultural workforce, effectively shifting reliance away from illegal labor practices and enhancing the stability and legality of the agricultural labor market.

The Department believes that the anticipated benefits of the IFR exceed its costs. c. Regulatory Alternatives

The Department considered two regulatory alternatives. The first alternative would apply the Skill Level I (Entry-Level) AEWR rate to all positions, rather than using the two-skill AEWR methodology in the IFR. In this alternative, the transfer estimates applied to the majority of H-2A workers in are also applicable to the remaining H-2A workers that would be considered experienced workers under the Department's preferred methodology. To calculate the total impact of the first regulatory alternative, the Department used the same methodology described in the Transfers Associated with AEWR Determination Methodology section, resulting in estimated average annual undiscounted transfers of $2.55 billion. The total transfer over the 10-year period was estimated at $25.50 billion (undiscounted), or $21.95 billion (3%) and $18.27 billion (7%). Annualized transfer over ten years are $2.57 billion (3%) and $2.60 billion (3%).

Under the second regulatory alternative, the Department would replace the 4-bedroom fair market rent with the 0-bedroom (i.e., efficiency) fair market rent for 2 people. For 2024, this change would increase the housing premium to $3.54, which is approximately $613 per month--closer to Farmers.gov housing cost estimates \204\ of approximately $9,000 to $13,000 per worker per year. Under the IFR methodology, the Department estimated a housing premium of $1.75, which is equal to a rent of approximately $70 per week and $300 per month. The Department estimated average annual undiscounted transfers of $3.88 billion. The total transfer over the 10-year period was estimated at $ 38.82 billion undiscounted, or $33.31 billion (3%) and $27.64 billion (7%). Annualized transfer over ten years are $3.91 billion (3%) and $3.94 billion (3%).

\204\ https://www.farmers.gov/working-with-us/h2a-visa-program.

Exhibit 11 summarizes the estimated transfers associated with the three considered revised wage structures over the 10-year analysis period. Transfers under the IFR and both regulatory alternatives are transfers from H-2A employees to H-2A employers.

Exhibit 11--Estimated Monetized Transfers of the Interim Final Rule

[$2025 Millions]

Regulatory Regulatory

Interim final rule alternative 1 alternative 2

(transfers from (transfers from (transfers from

employees to employees to employees to

employers) employers) employers)

Total 10-Year Transfer.............................. $24,157.10 $25,503.49 $38,817.90 Total with 3% Discount.............................. 20,781.53 21,946.32 33,314.66 Total with 7% Discount.............................. 17,296.86 18,273.50 27,642.21 Annualized Undiscounted Transfer.................... 2,415.71 2,550.35 3,881.79 Annualized Transfer with 3% Discount................ 2,436.23 2,575.78 3,905.49 Annualized Transfer with 7% Discount................ 2,462.68 2,601.74 3,935.63

The Department prefers the chosen approach of the IFR because it better accounts for the wages of workers in higher skilled positions and is more representative of lodging conditions for H-2A workers.

B. Regulatory Flexibility Act, Small Business Regulatory Enforcement Fairness Act of 1996, and Executive Order 13272 (Proper Consideration of Small Entities in Agency Rulemaking) 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 Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), Public Law 104-121> (Mar. 29, 1996), hereafter jointly referred to as the RFA, requires agencies to prepare an initial regulatory flexibility analysis (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.

Because public notice was not required for this IFR, the Department was not obligated to prepare a regulatory flexibility analysis.\205\ Nonetheless, The Department conducted the analysis below of the effect on small entities from the IFR and, based on that analysis, concludes that this rule will have a significant economic impact on small farms that employ H-2A workers.

\205\ See, e.g., Oregon Trollers Ass'n v. Gutierrez, 452 F.3d 1104, 1124 (9th Cir. 2006) (“When the agency validly invokes the “good cause” exception, the RFA does not apply.”).

Initial Regulatory Flexibility Analysis (IRFA) 1. Why action is being considered

As described throughout the preamble for this IFR, in the Department's view, immediate reform to the H-2A program's minimum wage policy, or the AEWRs, is necessary to avoid widespread disruption across the U.S. agricultural sector. Without prompt action, agricultural employers will face severe labor shortages, resulting in disruption to food production, higher prices, and reduced access for U.S. consumers. Further, the Department initially finds that qualified and eligible U.S. workers will not make themselves available in sufficient numbers, even at current wage levels, to fill the significant labor shortage in the agricultural sector that will result from the sealing of the border and potential further enforcement of immigration laws. The reforms contained in this IFR of the H-2A program's wage policy are urgently needed to restore the usability of the H-2A program and to provide a practical, lawful workforce alternative to illegal aliens being removed. These changes ensure that agricultural employers offer wages to legally authorized workers that are consistent with wages paid in comparable farm and non-farm jobs, while maintaining compliance with immigration law and supporting the stability of the nation's food supply. 2. Objective of the IFR

The primary objectives of the IFR are to restore the usability of the H-2A program, ensure a stable food supply for the United States, and (relevant to the RFA) avert irreparable economic harm to agricultural employers as large numbers of illegal aliens exit the labor force. (3) Class of Small Entities

A small entity is one that is independently owned and operated and that is not dominant in its field of operation. 5 U.S.C. 601(3); 15 U.S.C. 632. The definition of small entity varies from industry to industry to properly reflect industry size differences. 13 CFR 121.201. An agency must either use the SBA definition for a small entity or establish an alternative definition for the industry.

Using the U.S. Department of Agriculture (USDA) farm size definitions and data, the Department has conducted a small entity impact analysis. This analysis is focused on farms because over three quarters of affected entities are primarily engaged in growing crops and raising animals for sale. The Department lacks data on individual entities that participate in the H-2A program. Therefore, the Department is using USDA data as a proxy for H-2A participants. USDA data includes the number of farms that hire farm workers, number of hired farm workers, and annual revenue disaggregated farm size. Using this data allows the Department to estimate the per-small farm rule familiarization cost and the cost savings of the IFR as a percent of revenue. The Department notes that all hired farm workers are not H-2A workers and that only a small share of U.S. farms utilize the H-2A program. (4) Impact on Small Entities a. Familiarization With Regulatory Change

Upon effective implementation of the IFR, H-2A employers will be required to become acquainted with the new regulatory framework. The Department estimated this cost for a hypothetical small entity by multiplying the time required to read the new rule (1 hour) by the average hourly compensation rate of a human resources specialist ($60.95, as calculated above). Thus, the resulting cost per small entity is $60.95 ($60.95 x 1 hour). This cost occurs only in the year the IFR is published. b. Cost Savings

As explained in the E.O. 12866 section above, the Department identified wage transfers from H-2A workers to U.S. employers that will result from the following provisions in the IFR:

Wage transfers that account for the compensation disparity U.S. workers face when H-2A workers are paid for work performed under the same work contract but, unlike U.S. works, receive additional non- wage compensation in the form of free housing.

Wage transfers associated with modifications to the AEWR determination methodology that account for different skill levels delineated in employers' job offers.

The Department estimated that the above provisions will result in annualized transfers of $2.46 billion discounted at 7 percent over 10 years. The Department also estimated that there will be an annual average of 446,180 certified H-2A workers over the next 10 years. This translates into a wage transfer from the average H-2A worker to U.S. employers of $5,513 per year. Method Used To Estimate the Impact on Small Entities

The Department used the following steps to estimate the cost of the IFR per small entity as a percentage of annual receipts. First, the Department used the USDA size definitions to determine the size thresholds of small entities. The USDA defines a “small family farm” as a farm having a gross cash farm income (GCFI) of less than $350,000 per year. Next, the Department obtained data on the number of farms and annual revenue by size from the USDA's 2022 Census of Agriculture.\206\ Then, the Department divided the estimated first-year cost per entity ($60.95) by the average annual receipts per small farm ($47,062) to determine whether the IFR rule familiarization cost would have a significant economic impact on small entities.\207\

\206\ U.S. Department of Agriculture, “2022 Census of Agriculture,”

\207\ For purposes of this analysis, the Department used a 3- percent threshold for “significant economic impact.” The Department has used a 3-percent threshold in prior rulemakings.

To estimate the cost savings per small farm, the Department first determined the average number of hired farm workers per small farm (2.5) by dividing the number of hired farm workers on small farms (669,690) by the number of small farms that hire farm labor (268,931). The Department then estimated the average number of hired H-2A workers per small farm (0.41) by multiplying the average number of hired farm workers per small farm (2.5) by the percent of the farm workforce that are H-2A workers (16.3%).\208\ The Department then multiplied the average number of hired H-2A workers per small farm (0.41) by the annualized discounted cost savings per H-2A worker ($5,513) to estimate the savings per small farm ($2,238). Then, the Department divided the estimated cost savings per small farm by the average receipts per small farm to determine whether the IFR will have a significant economic impact on small farms.

\208\ The percent of the farm workforce that are H-2A workers (16.3%) was derived by dividing the number of H-2A workers in 2022 (355,894) by the number of hired farm workers in 2022 (2,184,493).

As shown in Exhibit 12, the first-year cost for rule familiarization is not expected to have a significant economic impact (3 percent or more) on small farms. The first-year cost for rule familiarization is estimated to be 0.1 percent of the average receipts per small farm. As also shown in Exhibit 12, the annualized cost savings are estimated to have a significant economic impact on small farms that employ H-2A workers. The annualized cost savings are estimated to be 4.8 percent of the average receipts per small farm. The Department therefore estimates the total annualized transfers for small farms that hire farm labor to be $601.8 million or 24.5% of total transfers. [GRAPHIC] [TIFF OMITTED] TR02OC25.012

(5) Relevant Federal Rules Duplicating, Overlapping, or Conflicting With the Proposed Rule

The Immigration and Nationality Act requires a prospective employer seeking to employ foreign nationals in agricultural employment of a temporary or seasonal nature to first apply to the Department for a labor certification. When creating the H-2A visa classification, Congress charged the Department with, among other things, a unique responsibility to regulate the employment of nonimmigrant foreign nationals in agriculture to guard against adverse impact on the wages of agricultural workers in the United States similarly employed. Thus, the statute delegates broad discretion to the Department in determining the sources and methods that best allows it to meet its statutory mandate, which this IFR adopts through the determination of AEWRs applicable only to employers seeking temporary agricultural labor certification under the H-2A visa classification. As such, the standards adopted in this IFR do not duplicate, overlap, or conflict with any other Federal rules. (6) Alternatives to the Proposed Rule

As explained in the RIA, the Department considered two regulatory alternatives. The first alternative would apply the Skill Level I (Entry-Level) AEWR rate to all positions, rather than using the two- skill AEWR methodology in the IFR. The Department estimated that this alternative would result in annualized transfers of $2.60 billion discounted at 7 percent over 10 years. Given the projected annual average number of certified H-2A workers over the next 10 years (446,180), the Department estimated a wage transfer from the average H- 2A worker to U.S. employers of $5,831 per year. The Department then multiplied the average number of hired H-2A workers per small farm (0.41) by the annualized discounted cost savings per H-2A worker ($5,831) to estimate the cost savings per small farm from this alternative ($2,367). As shown in Exhibit 13, the annualized cost savings of this alternative are estimated to have a significant economic impact on small farms that employ H-2A workers. The annualized cost savings of this alternative are estimated to be 5.0 percent of the average receipts per small farm.

[GRAPHIC] [TIFF OMITTED] TR02OC25.013

Under the second regulatory alternative, the Department would replace the 4-bedroom fair market rent with the 0-bedroom (i.e., efficiency) fair market rent for 2 people. The Department estimated that this alternative would result in annualized transfers of $3.94 billion discounted at 7 percent over 10 years. Given the projected annual average number of certified H-2A workers over the next 10 years (446,180), the Department estimated a wage transfer from the average H- 2A worker to U.S. employers of $8,821 per year. The Department then multiplied the average number of hired H-2A workers per small farm (0.41) by the annualized discounted cost savings per H-2A worker ($8,821) to estimate the cost savings per small farm from this alternative ($3,580). As shown in Exhibit 14, the annualized cost savings of this alternative are estimated to have a significant economic impact on small farms that employ H-2A workers. The annualized cost savings of this alternative are estimated to be 7.6 percent of the average receipts per small farm. [GRAPHIC] [TIFF OMITTED] TR02OC25.014

The Department prefers the chosen approach of the IFR because it better accounts for the wages of workers in higher skilled positions and is more representative of lodging conditions for H-2A workers.

The purpose of the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq., includes minimizing the paperwork burden on affected entities. The PRA requires certain actions before an agency can adopt or revise a collection of information, including publishing for public comment a summary of the collection of information and a brief description of the need for and proposed use of the information.

As part of its continuing effort to reduce paperwork and respondent burden, the Department conducts a preclearance consultation program to provide the public and Federal agencies with an opportunity to comment on proposed and continuing collections of information in accordance with the PRA. See 44 U.S.C. 3506(c)(2)(A). This activity helps to ensure that the public understands the Department's collection instructions, respondents can provide the requested data in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the Department can properly assess the impact of collection requirements on respondents.

A Federal agency may not conduct or sponsor a collection of information

unless it is approved by the Office of Management and Budget (OMB) under the PRA and it displays a currently valid OMB control number. The public is also not required to respond to a collection of information unless it displays a currently valid OMB control number. In addition, notwithstanding any other provisions of law, no person will be subject to penalty for failing to comply with a collection of information if the collection of information does not display a currently valid OMB control number (44 U.S.C. 3512).

The Department has determined that the changes adopted in this IFR will not result in changes to the information collection covered under H-2A Temporary Agricultural Labor Certification Program, OMB Control Number 1205-0466 (OMB 1205-0466), which would not require soliciting public comments in order to seek OMB approval of any clarifying changes and de minimis adjustment in burden the proposed changes might cause to existing information collection tools covered under this control number. The Department intends to collect the information it currently requires in order to process H-2A job orders and applications for agency decision making and will provide a set of frequently asked questions that will be available on the agency website to help respondents better organize information related to job duties and requirements that employers already disclose on existing fields in the forms.

Administrative practice and procedure, Employment, Employment and training, Enforcement, Foreign workers, Forest and forest products, Fraud, Health professions, Immigration, Labor, Passports and visas, Penalties, Reporting and recordkeeping requirements, Unemployment, Wages, Working conditions.

For the reasons stated in the preamble, the DOL amends 20 CFR part 655 as follows:

PART 655--TEMPORARY EMPLOYMENT OF FOREIGN WORKERS IN THE UNITED STATES

0 1. The authority citation for part 655 continues to read as follows:

Authority: Section 655.0 issued under 8 U.S.C. 1101(a)(15)(E)(iii), 1101(a)(15)(H)(i) and (ii), 8 U.S.C. 1103(a)(6), 1182(m), (n), 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), 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).

0 2. Amend Sec. 655.120 by revising paragraph (b) to read as follows:

Sec. 655.120 Offered wage rate.

* * * * *

(b) AEWR determinations. (1) Except for occupations governed by the procedures in Sec. Sec. 655.200 through 655.235, the OFLC Administrator will determine the AEWRs as follows:

(i) For occupations included in the field and livestock workers (combined) category:

(A) If a statewide annual average hourly gross wage in the State at each skill level, as required by paragraph (b)(2) of this section, is reported by the Occupational Employment and Wage Statistics (OEWS) survey, that wage shall be the AEWR for the State; or

(B) If a statewide annual average hourly gross wage in the State at either skill level is not reported by the OEWS, the AEWR for the occupations shall be the national annual average hourly gross wage at that skill level, 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 at each skill level, as reported by the OEWS survey; or

(B) If a statewide annual average hourly gross wage in the State at either skill level is not reported by the OEWS survey, the AEWR for each occupation shall be the national annual average hourly gross wage for that occupation at that skill level, 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 October 2, 2025, including job orders filed concurrently with an Application for Temporary Employment Certification to the NPC for emergency situations under Sec. 655.134.

(iv) For purposes of this section, the terms State and statewide include the 50 States, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands.

(2) The OFLC Administrator shall determine the AEWRs described in paragraphs (b)(1)(i) and (ii) of this section at two skill levels.

(i) Skill level I shall be computed as the arithmetic mean of the first one-third of the wage distribution for the occupation(s); and

(ii) Skill level II shall be computed as the arithmetic mean of the entire wage distribution for the occupation(s).

(3) Notwithstanding 20 CFR 655.122(d), the OFLC Administrator shall establish a downward annual AEWR compensation adjustment for each State computed as an equivalent hourly rate based on the weighted statewide average of fair market rents for a four-bedroom housing unit available from the Department of Housing and Urban Development, provided that such adjustment shall not exceed 30 percent of the AEWRs determined under paragraphs (b)(1)(i) and (ii) of this section. The statewide annual hourly AEWR based on this compensation adjustment shall be determined separately and only apply to H-2A workers sponsored under the Application for Temporary Employment Certification.

(4) The OFLC Administrator will publish a notice in the Federal Register, at least once in each calendar year, on a date to be determined by the OFLC Administrator, establishing each AEWR and corresponding housing compensation adjustment under this section. The updated AEWR and corresponding housing compensation adjustment under this section will be effective as of the date of publication of the notice in the Federal Register.

(5) If an updated AEWR for the occupational classification and geographic area is published in the Federal Register during the work contract, and the updated AEWR is higher than the highest of the previous AEWR; a prevailing wage for the crop activity or agricultural activity and, if applicable, a distinct work task or tasks performed in that activity and geographic area; the agreed-upon collective bargaining wage; the Federal minimum wage; or the State minimum wage, the employer must pay at least the updated AEWR beginning on the date the updated AEWR is published in the Federal Register.

(6) If an updated AEWR for the occupational classification and geographic area is published in the Federal Register during the work contract, and the updated AEWR is lower than the rate guaranteed on the job order, the employer must continue to pay at least the rate guaranteed on the job order.

(7) The occupational classification and applicable AEWR shall be determined based on the majority (meaning more than 50 percent) of the workdays during the contract period the worker will spend performing the agricultural labor or services, including duties that are closely and directly related, and the qualifications on the job order. * * * * *

Susan Frazier, Acting Assistant Secretary for Employment and Training, Labor. [FR Doc. 2025-19365 Filed 9-30-25; 4:15 pm] BILLING CODE 4510-FP-P