Temporary Agricultural Employment of H-2A Aliens in the United States

DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Part 655

Wage and Hour Division

29 CFR Part 501

RIN 1205-AB55

Temporary Agricultural Employment of H-2A Aliens in the United States

AGENCY:

Employment and Training Administration, and Wage and Hour Division, Labor.

ACTION:

Final rule.

SUMMARY:

The Department of Labor (the Department or DOL) is amending its regulations governing the certification of temporary employment of nonimmigrant workers in temporary or seasonal agricultural employment and the enforcement of the contractual obligations applicable to employers of such nonimmigrant workers. The Department is also amending the regulations at 29 CFR part 501 to provide for enhanced enforcement under the H-2A program requirements so that workers are appropriately protected when employers fail to meet their obligations under the H-2A program.

DATES:

This Final Rule is effective March 15, 2010.

FOR FURTHER INFORMATION CONTACT:

For further information on 20 CFR part 655, contact William L. Carlson, Ph.D., Administrator, Office of Foreign Labor Certification, Employment and Training Administration, U.S. Department of Labor, 200 Constitution Avenue, NW., Room C-4312, Washington, DC 20210; Telephone (202) 693-3010 (this is not a toll-free number). Individuals with hearing or speech impairments may access the telephone number above via TTY by calling the toll-free Federal Information Relay Service at 1-800-877-8339.

For further information on 29 CFR part 501 contact James Kessler, Farm Labor Branch Chief, Wage and Hour Division, U.S. Department of Labor, 200 Constitution Avenue, NW., Room S-3510, Washington, DC 20210; Telephone (202) 693-0070 (this is not a toll-free number). Individuals with hearing or speech impairments may access the telephone number above via TTY by calling the toll-free Federal Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Revisions to 20 CFR Part 655 Subpart B

A. Statutory and Regulatory Background

The H-2A nonimmigrant worker visa program enables United States (U.S.) agricultural employers to employ foreign workers on a temporary basis to perform agricultural labor or services. Section 101(a)(15)(H)(ii)(a) of the Immigration and Nationality Act (INA or the Act), 8 U.S.C. 1101(a)(15)(H)(ii)(a); see also 8 U.S.C. 1184(c)(1) and 1188.

1

The INA authorizes the Secretary of the Department of Homeland Security (DHS) to permit employers to import foreign workers to perform temporary agricultural labor or services of a temporary or seasonal nature if the Secretary of the U.S. DOL (Secretary) certifies that:

1

For ease of reference, all subsequent sections of the INA will be referred to by their corresponding section in the United States Code (U.S.C.).

(A) There are not sufficient U.S. 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

(B) 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.

8 U.S.C. 1188(a)(1). The Secretary has delegated these responsibilities, through the Assistant Secretary, Employment and Training Administration (ETA), to ETA's Office of Foreign Labor Certification (OFLC). The Secretary has delegated responsibility for enforcement of the worker protections to the Administrator of the Wage and Hour Division (WHD). The Department's H-2A regulations remained largely unchanged from the 1987 Rule until 2008. In 2008, the Department significantly revised these regulations at 73 FR 77110, Dec. 18, 2008 (the 2008 Final Rule). Over the past several months, the Department undertook a review of the policy decisions reflected in the 2008 Final Rule, specifically reviewing the worker protections afforded under that rule. This review resulted in a Notice of Proposed Rulemaking (NPRM) published in September 2009, 74 FR 45906, Sep. 4, 2009.

B. Overview of Comments Received

The Department received almost 7,000 comments on the proposed rule. We have determined that 349 of these comments were completely unique, 13 were considered duplicates, and 6,577 were considered a form letter or based on a form letter.

Commenters represented a broad range of constituencies for the H-2A program, including individual farmers, farm workers, farm associations, farm worker advocate groups, agents, law firms, farm labor bureaus, State Workforce Agencies (SWAs), State Government Officials, U.S. Congress Members and Committees, and various interested members of the public. The Department received comments both in support of and in opposition to the proposed regulation, which are discussed in greater detail below. These comments raised a variety of concerns, some general and some pertaining to specific provisions or specific proposals. After reviewing the comments thoughtfully and systematically, the Department has modified several provisions and retained others as originally proposed in the NPRM. In addition, there were several commenters that requested that due to the timing of the regulation falling during harvest time for many farmers and based on the complexity of the issues addressed, the Department should provide additional time to comment on the proposed rule. In response to these comments, the Department provided an additional 15 days for comments on the proposed rule.

The Department received many comments that were deemed to be beyond the scope of the proposed rule. Some of these issues included pending legislation, the H-2B temporary nonagricultural worker program, comprehensive immigration reform, and specific issues related to the control of our nation's borders. These are issues that cannot be resolved or implemented through this regulatory process or are not within the purview of the Department. Additionally, comments submitted in a manner inconsistent with the specific directions of the NPRM or submitted after the comment period closed were not considered.

The Department received many comments challenging the Department's decision to engage in new rulemaking for the H-2A program. The Department has inherent authority to change its regulations in accordance with the Administrative Procedure Act (APA). In this Final Rule we provide an appropriate justification for all of the changes that we are making to the H-2A program.

The Department received requests by several commenters that the proposed rule be published in Spanish since the workers who use the program predominantly speak and write Spanish as their first language. The APA at 5 U.S.C. 552(a)(1) requires agencies to

publish regulations in the

Federal Register.

The Department initiated conversations with the Office of the

Federal Register

on the subject of publishing regulations in a language other than English. However, the Office of the

Federal Register

informed the Department that based on its limited resources and personnel it is unable to publish any documents in a language other than English.

C. Severability

To the extent that any portion of this Final Rule is declared invalid by a court, the Department intends for all other parts of the Final Rule that are capable of operating in the absence of the specific portion that has been invalidated to remain in effect. Thus, even if a court decision invalidating a portion of this Final Rule results in a partial reversion to the current regulations or to the statutory language itself, the Department intends that the rest of the Final Rule continue to operate, if at all possible in tandem with the reverted provisions.

II. Discussion of Comments Received

The Department has addressed those areas in which it received comments. With regard to specific provisions on which the Department did not receive comments, it has retained the provisions as proposed, except where clarifying edits have been made, which have been explained below.

A. Section 655.103 Overview of This Subpart and Definition of Terms

1. Section 655.103(a) Overview

The overview section in the proposed rule was shortened from the 2008 Final Rule to avoid any possibility that it may contain mandates not contained in the sections following it. The Department received no comments on this change and is leaving the section unchanged in the Final Rule.

2. Section 655.103(b) Definitions

For the purposes of this section, the Department has included a discussion of those definitions that received comments. Any definitions that did not receive comments have been retained as proposed without further changes, unless otherwise noted.

a. Agricultural Association

The NPRM proposed a slight change to the definition of agricultural association. The 2008 Final Rule seemed to imply that an agricultural association could be both an agent of its employer members and an employer at the same time. The NPRM clarified that an agricultural association could either be an agent or an employer (whether a sole employer or joint with its members) but not both. The Department received no comments on this change; therefore, the Final Rule reflects the language proposed in the NPRM without any modification.

b. Area of Intended Employment

The NPRM made no significant changes from the 2008 Final Rule in the definition of area of intended employment. The only changes were in the elimination of the redundancies and the use of etc. in the listing of examples of the factual circumstances that could constitute a normal commuting distance or commuting area. One commenter suggested that the Department add a definite number of miles, such as 75 miles, within which all work locations must be located. The commenter suggested that because of the size of the area of intended employment coupled with the length of the certification period, U.S. workers who only want to do one kind of agricultural job may be dissuaded from applying. Another commenter suggested narrowing the area of intended employment because commuting distances within an area of intended employment could be upwards of 90 miles and it would be unreasonable for the Department to expect U.S. workers to commute such a distance every day without being provided housing.

The Department understands the concerns of both commenters; however, their concerns are misplaced. The term area of intended employment is used in conjunction with recruitment, which should cast a net as wide as possible to inform all potential U.S. workers of an upcoming contract in their area. U.S. workers are entitled to the same housing as the H-2A workers if they are not reasonably able to return to their residence within the same day as discussed under § 655.122(d)(1).

As for the commenter's concern that a worker who only wanted to do one type of agricultural activity would be precluded from applying, changing the definition of an area of intended employment would not alleviate such a situation. The term is used primarily for recruitment purposes to ensure that the designated SWAs receive the job order so that U.S. workers have the opportunity to apply for the job. Therefore, the Final Rule adopts the definition as proposed in the NPRM, with the exception of a minor editorial change.

c. Corresponding Employment

In the definition of corresponding employment, the Department proposed that all workers employed by H-2A employers doing work performed by H-2A workers be considered engaged in corresponding employment. The proposal returns to the requirements of the 1987 Rule, with one difference which is explained below. The Final Rule adopts the language of the NPRM as proposed.

The change from the 1987 Rule is the addition of the phrase or in any agricultural work performed by the H-2A workers. This language was added to address the adverse impact on U.S. workers when an H-2A employer engages H-2A workers in agricultural work outside the scope of work found in the approved job order, including work impermissibly performed outside the area of intended employment. Domestic workers should not be disadvantaged when an employer violates the terms and conditions of the H-2A job order. This does not require that every worker on a farm be paid the H-2A required wage. It does, however, require that workers employed by an H-2A employer who perform the same agricultural work as the employer's H-2A workers be paid at least the H-2A required wage for that work.

A number of commenters opposed the proposal to return to the prior definition of corresponding employment because they agreed with the rationale offered for the change in the 2008 Final Rule (which limited the protections to newly hired workers). These commenters stated that we provided no basis for a return to the prior definition, offered no evidence to support the proposed definition, and did not account for the increased costs. A labor contractor opposed the definition because it would require the payment of the Adverse Effect Wage Rate (AEWR) to non-H-2A workers who performed incidental work that was also performed by H-2A workers.

A worker advocate favored the proposal because it would ensure that U.S. workers would not be adversely affected by H-2A workers. Another advocacy organization supported the proposal because it would not penalize local workers and would contribute to a stable workforce.

The effect of the proposed definition which would require U.S. workers to be paid the same wages and conditions that H-2A workers receive when performing the same work is not new. Hearings were held in 1962 to address the impact on the wages and working conditions of domestic workers due to the use of temporary foreign workers to perform agricultural work. The 1980 Senate Judiciary Report on Temporary Worker Programs discussing the 1962 hearings

stated that U.S. employers were required to offer domestic workers wages equal to foreign workers as a prerequisite for labor certification. See Congressional Research Service: “Report to the Senate Committee on the Judiciary: Temporary Worker Programs: Background and Issues, 53 (1980).” For many years, the H-2 program has required employers to pay wage rates to domestic workers as determined by DOL. See 32 FR 4571, Mar. 28, 1967.

The preamble to the 1979 H-2 rulemaking provided that employers must offer and provide U.S. workers at least the same level of wages, benefits, and working conditions offered or provided to foreign workers. See 43 FR 10308, Mar. 10, 1979. The 1987 Rule continued the application of this principle and introduced the term corresponding employment, stating that those regulations were applicable to the employment of other workers hired by employers of H-2A workers in the occupations and for the period of time set forth in the job order approved by ETA as a condition for granting the H-2A certification. The regulations made specific reference to workers in corresponding employment hired by H-2A employers as well as to any other worker employed in corresponding employment. See 52 FR 20527-20528, and 20531, Jun. 1, 1987.

Courts have consistently upheld the Department's interpretation that the wages and benefits offered or provided to the H-2A workers must also be provided to domestic workers. See

Farmer

v.

Employment Security Comm'n of N.C.,

4 F.3d 1274, 1276, n.2, 3 (4th Cir. 1993) (H-2A employers must make certain benefits available to all temporary agricultural laborers); see also

Williams

v.

Usery,

531 F.2d 305, 306 (5th Cir. 1976) (the Secretary's authority is limited to making an economic determination of what rate must be paid all workers to neutralize any adverse effect resulting from the influx of temporary foreign workers), and

NAACP, Jefferson County

v.

Donovan,

566 F.Supp. 1202, 1205 (D.D.C. 1983) (the AEWR is the rate at which DOL requires growers to pay all of their farm workers before the Department will allow them to import alien labor; the purpose of requiring payment of the AEWR is to prevent importation of nonimmigrant laborers from having an adverse effect on the prevailing wage rate).

The 2008 Final Rule stripped these protections from longtime employees of H-2A employers, applying H-2A protections only to newly-hired workers and the H-2A workers themselves. The preamble to the 2008 Final Rule reasoned that longtime U.S. workers paid below the AEWR were no worse off for the hiring of H-2A workers at the higher AEWR and therefore were not adversely affected by the hiring of H-2A workers. On further review, this explanation fails to account for the role of the AEWR in protecting against possible wage depression from the introduction of foreign workers. Further, as one commenter observed, since newly-hired employees are entitled to the AEWR, a longtime employee may quit his current employment and re-apply for the same job with the same employer to obtain the new higher AEWR. This anomaly puts too high a premium on longtime employees knowing the AEWR, understanding their rights under the regulations, and having the security, rare in low-wage agricultural employment, to quit a job with the expectation of being immediately rehired. Under this Final Rule, longtime U.S. workers will be entitled to the wage rates paid to H-2A employees without having to quit their jobs and be rehired.

One commenter noted that the proposal ignores market-based principles. Another asserted that supervisors who occasionally did jobs performed by H-2A workers would have to be paid the AEWR. As explained above, the AEWR is intended to supplement wage rates that have been depressed by the presence of H-2A and other foreign workers. In that sense it is not reflective of market forces. Supervisors presumably would be paid more than the AEWR and the Final Rule does not require that their wages be reduced. To the extent that is not the case, the requirement to pay them the AEWR would only apply for the period of time they perform work done by H-2A workers.

One commenter requested that the definition of corresponding employment be expanded to include joint employment, and another requested that U.S. workers of fixed-site employers be included in the definition when their employer contracts with an H-2A Labor Contractor (H-2ALC) to provide H-2A workers. We do not believe it is necessary to include joint employment in the definition of corresponding employment, as the regulatory definition of joint employment makes clear that each employer in a joint employment relationship bears all of the obligations of an employer. Accordingly, U.S. workers employed by a joint employer of H-2A workers would be in corresponding employment, if performing the same work. However, the INA limits the Secretary's enforcement authority to employers (or joint employers) of H-2A workers. See 8 U.S.C. 1188(g)(2).

d. H-2A Labor Contractors (H-2ALCs)

The definition of an H-2ALC in the Final Rule remains unchanged from the NPRM. One commenter questioned whether the Department should grant certification to labor contractors to participate in the program, noting that, for growers, the H-2A program is a means to obtain the labor needed to meet their end, the production of a farm commodity, whereas for the labor contractor, the H-2A workers themselves are the desired end. Some commenters objected to the inclusion of the activities of recruitment and employment in the definition of an H-2ALC, asserting that these activities are only applicable to domestic migrant and seasonal workers already covered by the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). Because the Department's enforcement experience shows agricultural labor contractors have lower compliance rates than fixed-site agricultural employers, additional obligations are required for them. This requires a definition that distinguishes each type of employer. The fact that some H-2ALCs engage in activities covered by other statutes (such as MSPA) does not mean that the Department should ignore those activities when they relate to H-2A workers.

A representative of the sheep shearing industry objected to the potential classification of sheep shearing contractors as H-2ALCs. The argument presented by this commenter is that Congress specifically exempted employers in this industry from farm labor contractor (FLC) licensing requirements under MSPA; therefore, they should be exempt from being considered H-2ALCs.

The definition of an H-2ALC broadly encompasses employers who seek to participate in the H-2A program, but do not fit the definition of a fixed-site employer. The shearing contractor does not have a fixed site where the agricultural activities are performed; therefore, it cannot be a fixed-site employer and by default is an H-2ALC. The fact that shearing contractors are exempt from MSPA licensing requirements does not affect their status as H-2ALCs.

In addition, this commenter mistakenly believes that the name and location of each ranch where the shearing will take place must be in the advertisement. This was a requirement in the 2008 Final Rule, but was eliminated in the NPRM. The NPRM proposed to require that advertisements

contain the geographic area of intended employment with enough specificity to apprise applicants of any travel requirements and where applicants will likely have to reside to perform the labor or services. Therefore, the Department does not believe this to be a significant burden warranting a special definition of employer for the shearing industry.

This commenter also asserted that sheep shearing contractors will have to file separate applications for each area of intended employment and in some cases may have to file two different applications for one area of intended employment, if the contractor must return to the same area of intended employment after moving to a different area of intended employment. This commenter points out that under the 1987 Rule and the 2008 Final Rule there were special procedures for shearing contractors that provided for itinerary work and required only one application. The NPRM did not remove the special procedures at § 655.102. In addition, the “Special Procedures for Employers in the Itinerant Animal Shearing Industry Under the H-2A Program” found in Training and Employment Guidance Letter No. 17-06 are still in effect and would permit a sheep shearing employer to file an itinerary-based application. Therefore, the Department is not persuaded that this is a valid reason to exempt shearing contractors from the definition of an H-2ALC.

e. Job Opportunity

One commenter opined that the new definition of job opportunity offered by the NPRM was not as specific as the 1987 Rule because it does not include the words job opening. The commenter contended that a definition of job opportunity without a reference to a job opening is invalid. The Department disagrees. There is no meaningful distinction between the two concepts and adding the phrase job opening would be redundant.

f. Job Order

The definition of job order has been modified in this Final Rule to add the word material for consistency with the definitions of job offer and work contract.

g. Master Application

The NPRM proposed to include a definition of master application. Although we did not receive comments directly addressing the definition, based on comments received on the treatment of master applications in § 655.131(b), we are clarifying several aspects including that a master application may cover multiple areas of intended employment within a single State but no more than two contiguous States. These clarifications are discussed in more detail in the preamble for that section.

h. Positive Recruitment

The 2008 Final Rule definition included the concept of interviewing qualified and eligible individuals. The NPRM added the language that positive recruitment is performed under the auspices and direction of the OFLC. The Department received no comments on the definition of this term; therefore, the definition is unchanged in the Final Rule.

i. Prevailing Practice

The 2008 Final Rule defined the term prevailing whereas the NPRM defined the term prevailing practice. We have returned to the formulation used in the 1987 Rule which defines prevailing practice. This definition applies to certain terms of employment,

e.g.,

family housing, which must be offered by employers if they reflect prevailing practice,

i.e.,

are offered by a majority of the employers employing a majority of the workers in the area. Since the term prevailing wage is otherwise defined, there is no need for a definition of the term prevailing.

j. Prevailing Wage

The NPRM defined prevailing wage as the wage established under 20 CFR 653.501(d)(4). The Department received no comments on this change. Therefore, the Final Rule adopts the language of the NPRM without change.

k. Successor in Interest

The NPRM proposed no substantive changes to the definition of successor in interest; however, it added one factor to the circumstances that may be considered in determining whether an employer is a successor in interest. The change clarified that whether the former management or persons with an ownership interest in the prior firm retain a management interest in the successor firm may be considered in the successor determination. One commenter opposed the proposed clarification, but did not provide a reason for its opposition. The definition is adopted as proposed.

l. United States

The NPRM included in the definition of United States language regarding the transition program effective date of the application of Federal immigration law to the Commonwealth of the Northern Mariana Islands (CNMI). That transition program effective date having passed, we have accordingly deleted that language as CNMI now is included automatically in the definition of United States under U.S. immigration law.

m. United States Worker

The NPRM included a definition of U.S. workers that referenced, as did the 2008 Final Rule, the INA. Although no comments were received on this definition we have edited the definition for clarity.

3. Section 655.103(c) Definition of Agricultural Labor or Services

The NPRM proposed to modify the definition of agricultural labor or services in several ways. It proposed to retain all three of the statutory definitions set forth in the INA, which include agricultural labor as defined in sec. 3121(g) of the Internal Revenue Code of 1986 (IRC), agriculture as defined in sec. 3(f) of the Fair Labor Standards Act (FLSA), and the pressing of apples for cider on a farm, 8 U.S.C. 1188(a)(15)(H)(ii)(a). The NPRM proposed to remove three provisions from the definition. The first expressly provided that an activity is agriculture, even though it meets only one of the statutory definitions. The second allowed H-2A employees to engage in certain activities that are not included in the statutory definitions, provided that H-2B workers were not performing the same work in the same place. The third allowed H-2A workers to perform work that was not listed on the

Application for Temporary Employment Certification

(Application), so long as it was less than 20 percent of the work and incidental to the agricultural work performed. The Final Rule retains the first provision that had been proposed for removal but removes the latter two provisions. The NPRM also had proposed to retain logging employment in the definition and to add reforestation and pine straw activities. The Final Rule retains logging, but does not add reforestation and pine straw activities.

The IRC and FLSA definitions include work performed by a farmer or on a farm cultivating, raising, or harvesting crops and raising livestock and other animals and bees, including the operation and maintenance of the farm. The IRC definition also includes the packing and processing of agricultural and horticultural commodities so long as more than half of the commodities are produced by the farmer performing the packing and processing.

The FLSA definition has been interpreted to have a primary meaning (

e.g.,

production, cultivation, growing and harvesting of any agricultural or

horticultural commodities) as well as a broader secondary meaning that includes any practices performed by a farmer or on a farm as an incident to or in conjunction with such farming operations, including preparation for market, delivery to storage or to market, and delivery to carriers for transportation to market.

In 2008, changes to FLSA regulations at 29 CFR part 780 and 29 CFR part 788 addressing Christmas tree production were published simultaneously with the H-2A regulations. These changes to FLSA regulations did not change the applicability of H-2A to Christmas tree production. The H-2A definition of agricultural labor or services includes the IRC definition of this term. The IRC recognizes as agricultural labor those services performed in the employ of any person in connection with the planting, raising, cultivating, and harvesting of Christmas trees when such services are performed on a farm. Therefore, such activities come within the scope of H-2A.

a. An Occupation Included in Either Statutory Definition

The NPRM proposed the removal of a clarifying sentence stating that an occupation included in either the IRC or the FLSA definition is considered agricultural labor or services even though the occupation does not appear in both definitions. This means that if the work is within the scope of either the IRC or the FLSA definition of agriculture, then the work is within the scope of the H-2A program. Although the Department believed that this principle was clear and the provision superfluous, several commenters found it useful. The Final Rule reinstates the deleted sentence, with slight editorial modifications.

b. Removal of Handling, Packing, Processing, and Other Non-Agricultural Activities Where the Farmer Processed Less Than 50 Percent of the Commodity

The NPRM also proposed the removal of the definition of agricultural labor and services that had been added in the 2008 Final Rule that permitted handling, planting, drying, packing, packaging, processing, freezing, grading, storing, or delivering to storage or to market or to a carrier for transportation to market, in its unmanufactured state, any agricultural or horticultural commodity while in the employ of the operator of a farm where no H-2B workers are employed to perform the same work at the same establishment. This provision allowed activities defined as nonagricultural work under the FLSA and the IRC to be performed by H-2A workers, so long as no H-2B workers were employed at the same worksite doing the same work. The Final Rule adopts the proposed deletion, returning to the definition used in the 1987 Rule.

A few commenters sought the Department's rationale for the removal of this language. One commenter expressed disappointment regarding the proposed removal, asserting that it was a major change that would impact packing houses that might not be able to obtain workers through the H-2B program due to the annual cap on that program. This commenter further asserted that since such H-2B workers often worked alongside H-2A workers and their jobs are clearly in the stream of agriculture, the language should be re-inserted.

The 2008 Final Rule's definition was problematic because it allowed a farmer to employ both H-2A workers and H-2B workers to perform identical work, so long as the H-2A workers and the H-2B workers were employed in different locations. Congress clearly intended to create two separate programs: H-2A for agricultural work and H-2B for other, nonagricultural work. Compare 8 U.S.C. 1101(a)(15)(H)(ii)(a) and 8 U.S.C. 1101(a)(15)(H)(ii)(b). A regulation that allows H-2A workers and H-2B workers to perform the same activity is inconsistent with this Congressional intent. Furthermore, Congress has already addressed the proper classification of packing and processing work by including the IRC definition, which specifies that these activities are considered agricultural labor only if more than 50 percent of the commodity on which the work is being performed has been produced by the farmer. In other words, work in a packing shed on a farm, packing apples or peaches which are grown on the same farm, falls within the definition and thus within the H-2A program. However, if more than 50 percent of the apples or peaches being packed come from other farms, the work is no longer considered agriculture.

The Department believes that this statutory limitation is meaningful, and that Congress intended it to apply to different types of work. As a result, the Department has determined that it is appropriate to return to the definition of agriculture as set forth in the 1987 Rule and has deleted this provision.

c. Removal of Minor and Incidental Activities

Further, the NPRM proposed the removal of the phrase other work typically performed on a farm that is not specifically listed on the Application and is minor (

i.e.,

less than 20 percent of the total time worked) and incidental to the agricultural labor or services for which the H-2A worker was sought. Several commenters objected to this change, asserting that the removal of this language would unfairly limit their flexibility in assigning H-2A workers to different kinds of work, and/or to work which was not listed on the job order. Commenters also expressed fears that the removal of the 20 percent tolerance for work that is not listed on the Application would subject employers to debarment if H-2A workers perform work that is outside the scope of the job order for even a small fraction of their time.

The comments appear to reflect a misunderstanding of the 2008 Final Rule's use of the terms minor and incidental. For example, commenters complained that they would no longer be able to assign H-2A workers to such nonagricultural work as directing traffic at retail outlets (as opposed to roadside stands selling agricultural goods produced on the farm), and unloading truckloads of purchased merchandise (as opposed to farm products) to be offered for sale to retail customers. These activities are not incidental to the agricultural activities performed by H-2A workers, and they do not appear to relate to agriculture in any way. In light of these comments, it appears that the language added to the definition of agriculture led to confusion rather than clarification.

On further review, the Department believes that the proposed return to the 1987 Rule definition still provides farmers adequate flexibility in the use of H-2A workers, while respecting congressional intent that the work be agricultural in nature. These workers can, for example: Work at a farmer's roadside retail stand; handle, package or sell agricultural or horticultural goods produced on the farm; or perform maintenance work on farm buildings and machinery. These activities are performed by a farmer or on a farm and are incidental to farming operations, and therefore meet the FLSA definition of agriculture. In addition, the IRC definition of agricultural labor or services encompasses a broad range of activities, such as the management of wildlife on a farm, the ginning of cotton, or the handling, planting, drying, packing, packaging, processing, freezing, grading, storing, or delivering to storage or to market, of any agricultural or horticultural commodity, as long as more than 50 percent of the goods were produced by the farmer-employer. These definitions provide considerable latitude to the employer as to the type of work for which H-2A

workers may be used. They have been used for decades and are well understood.

Further, the INA is clear that in order for the Secretary to certify a petition, an applicant must demonstrate that there are not sufficient workers to perform the labor or services involved in the petition. It is incongruous to claim that such a broad degree of flexibility is needed to encompass work that has not yet been identified, while representing in the Application for H-2A workers that there are not enough U.S. workers available to perform such work. To approve an Application that would allow a worker to perform a substantial amount of work that was not included in the Application would not be in keeping with the plain statutory language requiring the Department to find that there are not enough workers available to perform the work for which H-2A workers are being sought. The 2008 Final Rule's 20 percent tolerance allowed H-2A workers to work a full day a week, every week for the entire job order, in work other than that listed on the Application. This broad language effectively allowed an employer to apply for 10 workers although the employer had only identified work for which eight workers were needed. This permitted an employer with a substantial number of H-2A workers to routinely assign them unadvertised work that would have been sufficient to support the hiring of additional U.S. workers. Such a tolerance is not minor and is inconsistent with the statutory standard. Therefore, the Final Rule deletes this provision from the definition.

Finally, several commenters expressed concerns that removing the reference to incidental work from the definition of agricultural labor or services, coupled with proposed changes in the provisions addressing revocation and debarment, might lead to an employer being debarred for having assigned a worker outside the scope of the job order for even a small fraction of time. However, the Department does not intend to debar an employer whose H-2A workers perform an insubstantial amount of agricultural work not listed in the Application. In exercising our enforcement discretion when an employer has worked an H-2A worker outside the scope of the activities listed on the job order due to unplanned and uncontrollable events (such as a freeze that prevents planting or heavy rains that prevent harvesting), the Department will consider the employer's explanation, so long as the activities are within the scope of H-2A agriculture, have been occasional or sporadic, and the time spent in total is not substantial. Moreover, the debarment regulations require that the violation be substantial, and that a number of factors must be considered in making that determination, including: An employer's previous history of violations; the number of workers affected; the gravity of the violation; the employer's explanation, if any; its good faith; and its commitment to future compliance. Under these criteria, the good faith assignment of a worker to work not listed in the Application for a small amount of time would not result in debarment. The Final Rule deletes the provision providing a blanket 20 percent tolerance for work outside the scope of the Application, as proposed.

d. Definition of Agricultural Labor or Services—Inclusion of Reforestation and Pine Straw Activities

The Department proposed that the definition of agricultural labor or services include reforestation activities, defined as predominately manual forestry work including but not limited to tree planting, brush clearing, and pre-commercial tree thinning. It also proposed to include pine straw activities, defined as certain activities predominately performed using hand tools, including but not limited to raking, gathering, baling, and loading of pine straw, a product of pine trees that are managed using agricultural or horticultural/silvicultural techniques. Currently, employers engaged in these activities may use the H-2B program. Reforestation, a sub-industry of forestry, is commonly performed by migrant crews who are overseen by labor contractors and share the same characteristics as traditional agricultural crews. The same reasoning was used in proposing to include pine straw activities within the scope of the H-2A program. Overwhelmingly, the comments were opposed to adding reforestation activities and pine straw activities to the H-2A program. We are convinced by these comments and therefore the Final Rule does not include reforestation and pine straw activities.

A number of employer commenters claimed that the way in which contracts are awarded to reforestation companies would preclude applicants from being able to file H-2A applications in realistic timeframes and would make it difficult to comply with H-2A provisions; they asserted that such contracts are often for short duration, making it particularly difficult to provide documentation that housing, typically hotels or motels, had been secured far in advance. Some of the commenters projected their increased costs and predicted the costs could put them out of business or preclude them from using the program to employ an authorized workforce.

Employee advocates indicated they were concerned about moving such workers into the H-2A program, since such a change would mean these workers would lose the protections afforded to them by the MSPA, particularly the right to a Federal cause of action to enforce these rights, replete with statutory liquidated damages for violations. Commenters indicated that the loss of protections under MSPA outweighed whatever additional benefits or protections inclusion in the H-2A program would offer. Several commenters suggested that the better course of action would be for the Department to provide additional protections to these workers through changes in the regulations that govern the H-2B program.

Only a few commenters supported the proposed change. One stated that the activities were agricultural and thus it was unreasonable for forestry contractors to have all the regulatory responsibilities of agricultural employers but be denied access to agricultural labor under the H-2A visa program. Others supported the change based on the reasons the Department had used in making the proposal. A State agency supported the proposal but cautioned there would be increased efforts and costs for their agency to carry out additional housing inspections and prevailing wage and practices surveys. We received only one comment that specifically addressed the proposed inclusion of pine straw activities, and it supported the inclusion based on a circuit court decision that found that these activities fell within the definition of agriculture under MSPA. We note that the court in this decision did not rely on the definitions of agriculture used in either the FLSA or the IRC, which are the statutory definitions included in the H-2A program. See

Morante-Navarro

v.

T & Y Pine Straw, Inc.,

350 F.3d 1163 (11th Cir. 2003).

Taking into account the lack of support from all sides to the proposed inclusion of reforestation activities and pine straw activities in the H-2A program, the Department has decided not to include these activities in the definition of agricultural labor or services in the Final Rule. We will consider whether it is appropriate to propose additional protections for these workers in any future revision of the H-2B program.

e. Definition of Agricultural Labor or Services—Logging

The NPRM proposed to keep logging in the H-2A program; however, the definition section of the NPRM proposed a more detailed definition of logging employment. The justification for this decision to include logging in the definition was contained in the preamble to the 2008 Final Rule.

The Department received some comments on the inclusion of logging in general and the definition in particular. One commenter indicated no opposition to the inclusion of logging in the definition of agricultural labor or services but noted that the Department offered no justification for inclusion of logging in the NPRM. Another commenter stated that the rationale for including logging in the definition is inconsistent with prior regulations and principles of statutory interpretation. This commenter asserted that the statutory language of 8 U.S.C. 1101(a)(15)(H)(ii)(b) clearly encompasses all temporary service or labor other than agricultural labor or services, and argued that the Department arbitrarily used the phrase agricultural labor or services (defined by several statutory provisions) as authority to expand the scope of the H-2A program to cover virtually all work with renewable natural resources. The commenter argued that the division of 8 U.S.C. 1101(a)(15)(H)(ii) into (a) and (b) (devolving into the H-2A and H-2B programs) was not intended to grant the Department unlimited discretion to make legislative changes, as proposed in § 655.103(b).

The same commenter asserted that the inclusion of logging in the definition as in 2008 would constitute a substantial change from past practice that does not protect U.S. workers. This commenter also contended that moving these workers from a visa program with caps to one without statutory caps would not assist in protecting them from exploitation by labor contractors. Instead the commenter proposed that the more stringent labor protections applicable to H-2ALCs be incorporated into the H-2B regulations for all temporary foreign workers not working at fixed locations.

The Department disagrees with this commenter. Congress clearly gave the Secretary authority to define agricultural labor and services through regulation. 8 U.S.C. 1101(a)(15)(H)(ii)(a). As stated previously, the Department's rationale was discussed in detail in the 2008 Final Rule. Proposed changes to the H-2B regulations are not a part of this rulemaking.

A reforestation contractor noted that logging was included under the H-2A program due to misconceptions about the industry, namely that the companies are mainly labor contractors who hire and move migrant crews. This commenter indicated that several logging employers would be interested in using temporary, seasonal foreign workers to fill labor shortfalls if the program allowed for working conditions and benefits that are common to prevailing logging employer practices. The commenter did not specify the prevailing logging practices being referenced; however, we believe that inclusion of logging activities in the H-2A program appropriately balances the interests of logging employers and workers.

A State agency indicated that the Department's definition of logging operations is consistent with the definition used by the Occupational Safety and Health Administration (OSHA) and commended the Department. However, the commenter was concerned that the definition of logging employment might encompass certain positions such as logging supervisors, mechanics, mechanics' helpers, and operations engineers (who cut and maintain roads for access). The commenter stated that these positions do not meet the standards for H-2A agricultural employment and do not constitute employment on an agricultural employer's farmstead. This commenter requested that the Department clarify that these positions are not included in the H-2A program. The NPRM definition identifies the types of logging activities for which labor certification may be granted. We did not intend to change the scope of logging activities adopted by the 2008 Final Rule and therefore employees who were previously granted logging status may continue to be certified under the definition now contained in the H-2A program. The Final Rule retains the language from the NPRM.

4. Section 655.103(d) Temporary or Seasonal Nature

a. General Comments Regarding Temporary or Seasonal Nature

The NPRM proposed to adopt the definition of temporary or seasonal nature currently used by DHS in its H-2A regulations. The Department received more than a dozen comments on this proposed change in the definition. All of them opposed the change. Many found that there was no rational basis for the change and stated that the preamble explanation was insufficient. Many said that the existing definition had worked effectively for more than 20 years and should be retained. Of those who explained why, the primary reason stated was that the DHS definition is meant to apply to the worker, not the employer, and DOL is tasked with determining the needs of the employer rather than the worker; therefore, the DHS definition used in the NPRM is inappropriate. Many of the commenters pointed out that the existing definition is well-established and is the subject of many years of precedential court decisions. These commenters asserted that departing from this well-established definition would be highly disruptive to the program.

Other commenters believe that the definition of temporary or seasonal nature in the NPRM is too vague and requires further delineation if it is to be kept. Specifically, these commenters point out that adding short to annual growing cycle limits the timeframe, and the requirement for labor levels far above those necessary for ongoing operations during that short timeframe could exclude small farmers who might only need one or two additional employees during the peak of their season.

The Department has decided to retain the language of the NPRM which was not intended to create any substantive change in how the Department administers the program. If additional clarification is needed in the future, we will provide such clarification through the use of guidance memoranda, bulletins, special procedures (as applicable) and other guidance documentation.

b. Treatment of the Dairy Industry Under the Definition of Temporary or Seasonal Nature

The Department received numerous comments requesting the inclusion of the dairy industry in the definition of agricultural labor or services.

All of these commenters expressed a critical need for foreign labor in the dairy industry. Several commenters referenced an internal survey of a national organization of milk producers that indicated that an estimated 62 percent of milk production on these farms was attributed to immigrant labor. One commenter asserted that domestic workers do not want to fill the available jobs in the dairy industry. Another commenter stated that a shortage of domestic labor is particularly acute in this industry, in which employers experience year-round employment needs and must invest significant resources into employee recruitment and retention.

Most of these commenters sought the inclusion of dairy under H-2A special procedures, likening the dairy industry to sheepherders (and also loggers and cider pressers) whose need is not temporary, but who enjoy the benefits of the program. One commenter argued that the industry should be included on an expanded temporary basis of 1 year at a time. This commenter referred to isolated, anecdotal evidence from before the passage of the Immigration Reform and Control Act of 1986 (IRCA) where the Department permitted successive 1-year certifications for an employer that demonstrated a particular need.

The determination of whether a particular dairy activity is eligible for an H-2A certification rests on a finding that the duration of the activity and the need for that activity is temporary or seasonal. The majority of activities encompassed by the dairy industry, and milk production in particular, are year-round activities and therefore cannot be classified as temporary. The Department has no legal authority, nor is there legislative precedent, that would allow for the inclusion of the entire dairy industry in the H-2A program.

Sheepherders, which many of the commenters cited as an example of an exception to the definition of temporary, owe their inclusion in the program to a statutory provision dating back to the 1950s. That legislative inclusion was implicitly ratified in IRCA. No such legislative inclusion of the dairy industry as a whole has yet to be provided by Congress.

Prefiling Procedures

5. Section 655.120 Offered Wage Rate

In response to comments, the Final Rule adds the agreed-upon collectively bargained wage to the list of required wage rates. The rationale for this change is explained below, after the discussion of the AEWR.

a. The Department's Execution of the Offered Wage Rate

(i) The Provision of an AEWR in the H-2A Program

The Department has decided to retain the concept of an AEWR as part of the H-2A program and that the basis for computing the H-2A AEWR shall be the annual average of combined crop and livestock workers' wages applicable for each state as reported by the U.S. Department of Agriculture's (USDA) Farm Labor Survey (FLS) reports. This section discusses the Department's rationale for retaining the AEWR and then discusses the Department's rationale for changing the methodology used to calculate the AEWR.

(ii) The Need for an AEWR

The admission of temporary foreign workers under the H-2A program is predicated on a certification by the Secretary that

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.

(8 U.S.C. 1188(a)(1)(B)).

Accordingly, under § 655.120(a) of this Final Rule, an employer must offer, advertise in its recruitment, and pay a wage that is the highest of the AEWR, the prevailing hourly wage or piece rate, the collectively bargained wage rate, or the Federal or State minimum wage, except where a special procedure is approved.

This requirement reflects a longstanding concern that there is a potential for the entry of foreign workers to depress the wages and working conditions of domestic agricultural workers. The AEWR is the minimum wage rate that agricultural employers seeking nonimmigrant foreign workers must offer to and pay their U.S. and foreign workers if the prevailing wage rate, the collectively bargained wage rate, and any Federal or State minimum wage rates are below the AEWR. The AEWR is designed to prevent the potential wage-depressive impact of foreign workers on the domestic agricultural workforce. The AEWR is a wage floor, and its existence does not prevent the worker from seeking, or the employer from paying, a higher wage.

From the outset of the Federal Government's involvement in the admission of temporary foreign agricultural workers, the Government has sought to protect similarly employed U.S. workers from the potential adverse effect such employment would have on their wages. Since 1953, the Department has computed and published AEWRs for the temporary employment of nonimmigrant foreign workers for agricultural employment under various admission programs. See H.N. Dellon, “Foreign Agricultural Workers and the Prevention of Adverse Effect”, 17 Labor Law Journal 739 (1966) for a detailed history of the early decades of publication of AEWRs by the Department. Mr. Dellon's article notes that, as far back as 1953, employers seeking to employ foreign nationals to work in various crop activities (in that case, under the Bracero Program) were required to pay not less than a wage established by DOL. AEWRs began to be set periodically on a statewide basis, first for a subset of States based on applications for temporary foreign workers and subsequently for all States (except Alaska).

As time passed, the establishment of AEWRs became more formalized, and AEWRs were computed and set for the H-2 program as well, after public notice and comment. See,

e.g.,

29 FR 19101-19102, Dec. 30, 1964; 32 FR 4569, 4571, Mar. 28, 1967; and 35 FR 12394-12395, Aug. 4, 1970.

Economic theory provides the initial justification for the use of an AEWR. Economic theory holds that, other things being constant, any increase in the supply of labor available in a labor market segment would result in a decrease in the equilibrium wage. This theory-based observation of the effect of increased labor supply is the basis for the concern that currently employed, or incumbent, farm workers would be adversely affected by lowered wages as a result of an influx of temporary foreign farm workers.

Similarly, economic theory holds that, under conditions of an emerging labor shortage, the previously observed wage (prevailing local wage) may not reflect the equilibrium wage.

2

Instead, adjustments would occur over time

3

and the observed wage would increase by an amount sufficient to attract more workers until supply and demand were met in equilibrium. Absent an increase of workers under the H-2A program, wages would rise above the currently observed wage in order to dispel the labor shortage until sufficient additional domestic labor was attracted into the market from neighboring geographic areas or other occupations. By computing an AEWR to approximate the equilibrium wage that would result absent an influx of temporary foreign workers, the AEWR serves to put incumbent farm workers in the position they would have been in but for the H-2A program. In this sense, the AEWR avoids adverse effects on currently employed workers by preventing wages from stagnating at the local prevailing

wage rate when they would have otherwise risen to a higher equilibrium level over time.

2

The notion that a single point wage would be observed for a market in equilibrium is a simplification. In the abstract, an equilibrium wage is the wage at which the quantity of labor supplied by workers matches the quantity of labor demanded by employers. In practical reality a range of individual wage contract amounts may be observed reflecting individual labor productivity differences, relative bargaining strengths of contracting parties, timing of employment contracts, imperfect knowledge of market conditions by one or both parties, location factors and a myriad of other influences, but this array of individual wage contract values yields a particular average as a measure of the distribution's central tendency, and this average is conveniently referenced as the equilibrium wage.

3

Including, given enough time, the possibility of substitution of capital for labor.

In practical application, there are a number of obstacles and limitations that hinder the market adjustment process to an equilibrium wage as indicated by the theoretical labor market analysis. Foremost of these is the limitation imposed by inefficiency in the transmission of information about labor market conditions (job openings, revised wage offers, conditions of employment, etc.) across both physical and social distances. Information transmission inefficiencies affect all labor markets. Most jobs in the U.S. are filled through informal information and referral processes. It has been estimated that fewer than 20 percent of job openings are listed on public labor exchange information systems or advertised in public media.

4

4

See Bayer, Patrick, Ross, Stephen, and Topa, Giorgio, “Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes.” National Bureau of Economic Research Working Paper No. 11019, 2005 for a review of research regarding the impact of differences in access to labor market information and social networks in shaping the different wage and employment outcomes of different groups of workers. See Ozga, S.A., “Imperfect Markets Through Lack of Information.” Quarterly Journal of Economics, February 1960, 74(1), pp. 29-52, for a theoretical discussion of the effects of imperfect information flows on labor market dynamics. See Holzer, Harry J., “Informal Job Search and Black Youth Unemployment.” American Economic Review, June 1987, 77(3), pp. 446-452 for a discussion of how minorities, and especially youth, are disadvantaged by the relative inefficiency of their informal job search and labor market information networks.

Farm workers are especially likely to be disadvantaged in terms of access to information about new or changing labor market conditions or job opportunities. The physical distances and relative social isolation typical of many rural environments slows the transmission of information by word-of-mouth. Even though seasonal migrant workers may move great distances from one crop area to another over the course of the planting, tending and harvesting seasons, their knowledge is often limited to a familiar circuit of employment opportunities, and they often lack rapid access to information that would enable them to alter routine migration patterns to take advantage of new opportunities. The low educational attainment of farm workers is a major barrier to efficient access and rapid response to changing labor market conditions. Over 45 percent of U.S. citizens who are employed as hired farm workers do not have a high school diploma, and 21 percent of U.S. citizens employed as hired farm labor have less than a 10th grade education.

5

These farm workers with low educational attainment, numbering over 246,000 U.S. citizens, and many more if permanent resident non-citizens are included, often have limited reading ability and limited access to newspapers and other media in which job opportunities and wage offers might be advertised. They are also disproportionately poor, and their economic status may limit their physical access to public labor market information and assistance resources.

5

Based on analysis of 2005-2009 data from the Current Population Survey (CPS), Annual Social and Economic Conditions Supplement. The analysis of CPS data was restricted to U.S. citizens because non-citizens in the sample could not be identified as legally documented residents or not.

The resulting limitations in the flow of labor market information hinder the rapid adjustment of wages to a market equilibrium level. This situation can lead to localized short-run critical shortages of farm labor and result in spikes in farm labor wages that are much greater in magnitude than would be the case if information flowed more readily and markets adjusted more rapidly to a final equilibrium. Wide fluctuations in local wages may create a hardship for farmers who need to plan financially for expected labor costs. Unexpectedly large increases in labor costs may reduce profits. Shortages of labor at critical times may cause tangible waste if crops cannot be harvested at the appropriate time. It was in part to alleviate such difficulties facing farmers, as well as to discourage the unauthorized employment of workers, that Congress enacted legislation to facilitate the temporary importation of foreign labor to meet short-term gaps in the domestic supply of labor in critical locales. However, Congress also recognized the need to protect the wages and access to jobs of citizens and other permanent residents employed in the farm labor sector, and Congress placed with the Secretary the responsibility to ensure that the process of importation of foreign labor to aid farmers did not cause damage to the economic condition of domestic farm workers.

The apparent existence of a shortage of domestic workers, at least temporarily, is the basis on which employers apply to import temporary foreign H-2A workers. The requirement that employers first attempt to recruit domestic labor by listing job openings and wage offers with SWAs which are part of the public labor exchange system and to advertise openings in appropriate media is an essential part of the process of protecting domestic workers. However, as a result of the known limitations faced by farm workers in obtaining information from these sources, there may not be enough time for additional domestic workers to enter the local farm labor market. In such cases, because there is a long history of temporary migrant work in the U.S. and because the potential supply of foreign low-wage agricultural workers is great, the importation of foreign workers might more expediently address the labor shortage. However, because such an influx of labor would imply that the wages of incumbent domestic workers would not adjust upward, the use of an AEWR circumvents this adverse affect on incumbent workers.

(iii) The Use of the Prevailing Wage Does Not Provide Sufficient Protection

A farm association commented that there is no valid economic justification for a separate AEWR standard in addition to the prevailing and statutory minimum wage. Another comment suggested that the concept of an AEWR is an outdated notion. They stated that the AEWR was created at a time when there was no Federal minimum wage for agricultural employees. The purpose of the AEWR, therefore, was to create a floor on the prevailing wage rate. Subsequently, the Government has established a Federal minimum wage for agricultural employees. The commenter asserted that once the agricultural minimum wage was established, the AEWR was retained simply as a matter of economic theory. The commenter further contended that keeping an AEWR that is higher than the prevailing wage actually has an adverse effect on employment of U.S. workers because it precludes access to jobs that would otherwise be available if there were a competitive wage. The commenter stated that he has moved to less labor-intensive farm practices as a direct result of the higher than market wage rate he has to pay based on the AEWR.

The commenter concluded that there is no current reason to have an AEWR. The commenter proposed that the Department refrain from further efforts to determine which of several flawed surveys are appropriate for the AEWR. Instead the Department should eliminate the AEWR and use the prevailing wage as the baseline for the H-2A program.

An AEWR distinct from a prevailing wage concept

6

is most relevant in cases in which the local prevailing wage is

lower than the wage considered over a larger geographic area (within which movement of domestic labor is feasible) or over a broader occupation/crop/activity definition (within which reasonably ready transfer of skills is feasible). In such cases, the introduction of foreign workers paid at the local prevailing wage fails to account for the fact that the labor shortage would have otherwise resulted in higher local wages. The use of the observed local prevailing wage would adversely affect domestic workers by filling job vacancies with foreign workers before wages were allowed to adjust upward to alleviate the labor shortage in the imperfectly functioning labor market information system.

6

Under the 2008 Final Rule, which also retained the concept of an AEWR, the methodology used to calculate the AEWR was such that the AEWR was essentially the same as the prevailing wage.

Thus, to more fully protect domestic workers from the adverse effects of temporary foreign workers, it is appropriate to compute wages based on a broader geographic area or broader occupation definition than the more specific prevailing wage computation when the local prevailing wage is below the average found in the broader market area. In this case, application of the AEWR is an attempt to approximate the equilibrium wage that would have resulted but for the introduction of foreign workers. The AEWR is, in essence, a prevailing wage concept defined over a broader geographic or occupational field, recognizing the relevant parameters over which wages could have adjusted to an equilibrium level in the absence of additional temporary workers under the H-2A program.

In cases in which the AEWR is not higher than the prevailing wage, minimum wage, or collectively bargained wage, incumbent domestic workers would be disadvantaged by the use of the AEWR instead of the higher alternative.

7

In these cases, the local shortage of labor exists despite a wage rate prevailing at a local level (or a mandated minimum wage or a collectively bargained wage) that is generally higher than wage average over a broader area, suggesting that wages have not fully adjusted to an equilibrium level. Therefore, in these cases, the AEWR is not binding on employers because use of a higher alternative wage would afford greater protection to incumbent workers. The difference between the local prevailing wage (which would be paid to temporary foreign workers) and the lower wage in the broader geographic or occupational definition area (represented by the AEWR) provides an incentive for domestic resident workers to shift their labor supply into the affected market and to benefit from additional employment opportunities and potentially higher wages than are available to them elsewhere. Because employers would otherwise be compelled to pay the minimum wage (by law), the collectively bargained wage (by contract) or the prevailing wage (by market forces), the Final Rule only codifies what the employers would otherwise do. The requirement that imported foreign temporary workers be paid no less than the highest of the AEWR, the local prevailing wage, the collectively bargained wage, or the applicable legal minimum wage ensures that domestic workers receive the greatest potential protection from adverse effects on their wages and working conditions, including the adverse effect of being denied access to the opportunity to earn a higher equilibrium wage that would have resulted as the market (perhaps slowly) adjusted in the absence of the guest workers.

7

Evidence suggests that the AEWR would be the highest of the computed wage alternatives, and therefore binding on employers, in the vast majority of cases. In Fiscal Year (FY) 2009, the AEWR was not applicable in only 10 percent of the cases certified under the Rule before the 2008 Final Rule.

(iv) Evidence of Current Wage Depression Is Not Needed

Citing various sources of evidence, some comments have suggested that the use of an AEWR is not justified because there is no evidence of wage depression in agriculture. One farm organization noted that, in the proposed rule, the Department justified the use of an AEWR despite the fact that the Department readily acknowledges that evidence is not conclusive on the existence of past adverse effect. Similarly, another association of agricultural employers asserted that there is no longer a rationale for an AEWR because wages in the agricultural industry have increased over time.

First and foremost, regardless of any past adverse effect that the use of low-skilled foreign labor may or may not have had on the wages paid to authorized agricultural workers, the Department considers the forward-looking need to protect U.S. workers whose low skills make them particularly vulnerable to even relatively mild—and thus very difficult to capture empirically—wage stagnation or deflation that has the potential to result from the hiring of immigrant labor. The lack of evidence of wage depression at present is not evidence that an AEWR is unnecessary; rather, it may be evidence that the imposition of the AEWR heretofore has been successful in shielding domestic farm workers from the potentially wage depressing effects of overly large numbers of temporary foreign workers. The fact, discussed below, that the localized wage adopted as the AEWR in the 2008 Final Rule has led to significant decreases in farm worker wage in many cases suggests that an AEWR linked to a wider geographic area and a wider spectrum of occupations has provided the protection it was intended to provide.

Furthermore, the Department recognizes that the empirical evidence is inconclusive about the past impact of immigration on wages and believes that the provision of an AEWR in the face of such uncertainty will serve to ensure that wages and working conditions are not adversely affected. The 2008 Final Rule reviewed evidence on the depressive effects of immigration on wages and explicitly reiterated the conclusion stated in the 1989 Rule that evidence of wage depression in the agricultural sector was inconclusive. 73 FR 77168, Dec. 18, 2008. In the 1989 Rule, the Department noted that some studies had identified wage depression in specific agricultural labor markets, but labeled that evidence anecdotal. The Department further noted that even this anecdotal evidence of wage depression was highly localized and concentrated in specific areas and crop activities. 54 FR 28043, Jul. 5, 1989.

According to the 2008 Final Rule preamble, evidence developed during the 20 years after the 1989 Rule did not provide additional clarity on the issue of wage depression. The 2008 Final Rule cited experts who continued to claim that unauthorized workers cause wage depression (

e.g.,

Michael J. Wishnie, “Prohibiting the Employment of Unauthorized Immigrants: The Experiment Fails”, 2007 U. Chic. Leg. For. 193, 215 (2007) (asserting that unauthorized workers certainly contributed to the depression of wages and working conditions for U.S. workers). However, the rule also cited experts who suggested that the evidence was mixed. Thus, the 2008 Final Rule, after considering the comments received on the subject of wage depression, and after reviewing relevant literature in an attempt to identify empirical support for the assertions made in those comments, reaffirmed the Department's conclusion in the 1989 rulemaking that evidence of wage depression in the agricultural sector is inconclusive. Furthermore, the 2008 Final Rule also stated that: there is no conclusive evidence one way or the other regarding the existence of wage depression in localized agricultural labor markets. 73 FR 77168-77169, Dec. 18, 2008.

Additional research not previously considered suggests that any adverse wage effects would be more likely to affect lower-skill workers. See Pia M. Orrenius, Michael Nicholson, “Immigrants in the U.S. Economy: A Host-Country Perspective,” Journal of Business Strategies, vol. 26, 2009, which concludes that those who suffer the most severe negative wage impacts are prior immigrants, who are the most substitutable for new immigrants. See also Vernon M. Briggs Jr., “Illegal Immigration: The Impact on Wages and Employment of Black Workers,” U.S. Civil Rights Commission, April 4, 2008, Washington, DC, which suggests that low skilled workers, many of whom are black, have been more dramatically affected by immigration over time.

Most contemporary research on the economic impacts of immigration deals with the effects of permanent immigration (whether authorized or not) on wages of incumbent workers across the economy generally, and not specifically in agriculture. To some extent it is not surprising that the results are unclear, because the effects of increased labor supply in particular labor markets from immigration are at least partially (and perhaps more than) offset in general economic equilibrium terms by the increase in aggregate demand from the formation of new households. The specific labor market impacts of permanent immigrants are also attenuated by the fact that immigrants are not limited by law to particular industries, occupations or places of residence. They may adapt to current economic conditions and seek opportunities in relatively fast growing economic areas where their potentially negative impact on wages is subsumed under a strong upward trend.

For several reasons, temporary authorized importation of foreign farm labor may differ from permanent immigration in its impact on labor markets. The guest workers are by definition admitted for only a temporary time, and their shelter and sometimes food are provided by the employer. They do not bring family; they do not set up permanent households; most of their earnings return to their home countries so that they add relatively little to the domestic economy; and their labor is not transferable to other industries where wages and jobs may be growing faster. The Department is concerned that the potential adverse impact on domestic workers of large numbers of authorized temporary foreign workers admitted under the H-2A program may be greater than the negative impact (if any) of similar numbers of permanent immigrants who contribute positively to aggregate economic demand through household formation and whose impact on agricultural wages may be reduced by their potential mobility to move into other industries.

Thus, in light of the uncertainty about the wage effects of immigration and the likelihood that any impact would be felt more severely by low-skill workers, the Department believes that the risk of wage depression must be recognized and therefore that there is a rational basis for the use of an AEWR.

The Department also recognizes the potential for the presence of unauthorized workers to exert a stagnating influence on agricultural wages. Evidence from the National Agricultural Workers Survey (NAWS) suggests that about 60 percent of hired farm workers may not have legal authorization to work. This large presence of unauthorized workers in the agricultural workforce heightens the concern about stagnating agricultural wages for authorized workers.

8

8

The ability of unauthorized workers to move readily between agricultural jobs and jobs in other industries such as construction may account for the lack of evidence of wage depression. In contrast, workers admitted under the H-2A program are restricted to working only in the agricultural sector, and therefore the wage-depressive effects of the influx of such workers are concentrated.

(v) The AEWR Is Unique to the H-2A Program

One commenter focused on an apparent inconsistency between the H-2A program and other temporary worker programs, none of which requires an AEWR in addition to a prevailing wage, suggesting that, because there is no provision for an AEWR in other guest worker programs, there is no justification for providing for an AEWR in the H-2A program.

For other programs, the Department currently applies the assumption that U.S. workers in the same occupation will be adequately protected from having their wages adversely affected by the hiring of foreign workers so long as the workers are paid prevailing wage rates. Congress itself has applied this assumption by statute with respect to admitting foreign workers under the H-1B program. 8 U.S.C. 1182(n)(1)(A), 1182(p).

However, the Department established special adverse effect wage rates for the H-2A program. The very existence of a separate program for temporary guest workers in agriculture demonstrates that the agricultural industry is unique and that temporary foreign agricultural workers, and domestic resident agricultural workers in general, may be quite different than workers in other industries subject to the H-1B and H-2B programs. Workers in agricultural labor or services often perform work in remote locations for short periods of time and therefore may have little or no access to community or government resources, decreasing their ability to obtain information about alternative employment opportunities that could enable them to bargain more effectively. In addition, the concentration of foreign temporary workers in a single industry sector amplifies the impact of the employment of guest workers on domestic workers. Therefore, the Department believes that the fact that an AEWR is not used in other programs is not indicative of its appropriateness for the H-2A program.

There is ample evidence that agricultural workers are a particularly vulnerable population. They are often hired on a seasonal basis and are required to move from place to place. In part as a consequence of their low educational attainment, low skills, low rates of unionization and high rates of unemployment, agricultural workers have limited ability to negotiate wages and working conditions with farm operators or agricultural services employers. The Department believes that the limited bargaining power of agricultural workers exacerbates the problem of stagnating prevailing wages and slow adjustment to higher equilibrium wages in the face of labor shortages, justifying the use of an AEWR separate and distinct from local prevailing wages.

The vulnerable condition of U.S. agricultural workers is described in a report by the USDA's Economic Research Service (ERS), available at

http://www.ers.usda.gov/Briefing/LaborAndEducation/FarmLabor.htm.

The report found that in 2006 the average annual unemployment rate for hired farm workers (8.5 percent) was nearly twice the unemployment rate for U.S. workers across all occupations (4.5 percent). High unemployment is in part attributable to the seasonality of farm work. Total employment levels for hired farm workers vary significantly depending on the time of year. As an example of seasonal employment fluctuations, the ERS report pointed to National Agricultural Statistics Service (NASS) data in 2006 which indicated that 1,195,000 hired farm workers were employed in mid-July, compared with only 796,000 in mid-January.

The ERS report also noted the concentration of hired farm workers in the Southwest. According to data from the Current Population Survey (CPS), roughly 40 percent of all hired farm

workers live in the Southwest, and 20 percent live in each of the South and Midwest regions. Almost half of all hired farm workers live in just five States: California, Texas, North Carolina, Washington, and Oregon. The geographic concentration of farm workers suggests that exclusive reliance on the traditional notion of the prevailing wage (

i.e.,

the wage paid for that occupation in area of intended employment) is inappropriate to the unique circumstances of the H-2A program. Moreover, many of the other temporary foreign labor programs administered by the Department are subject to statutory visa caps. Historically, those programs have never involved the influx of large numbers of foreign workers into a particular labor market because the influx of workers is spread throughout several industries. In these other programs, it is realistic to conclude that payment of a prevailing wage to the foreign workers will have no adverse effect on U.S. workers. This assumption is not valid in the H-2A context. The program is uncapped and experience indicates that it can involve large numbers of foreign workers entering a specific labor market. Under these circumstances, there is a heightened risk that the employment of foreign workers may produce wage stagnation in the local labor market. Access to an unlimited number of foreign workers in a particular labor market at the current prevailing wage would inevitably keep the prevailing wage lower than it would have been had it adjusted to an equilibrium wage to dispel the shortage through normal market processes involving domestic labor supply flows in response to equilibrium wage changes. The most effective way to remedy this adverse effect on domestic agricultural workers is to impose a wage floor that approximates the equilibrium wage that would have resulted, and the most effective way to approximate such a wage is to consider a broader geographic area than the local area considered for prevailing wages.

9

9

As mentioned previously, in cases in which the AEWR is not the highest of the prevailing wage, Federal or State minimum wage or collectively bargained wage, use of the AEWR would be a disadvantage to incumbent workers, and the highest wage rate among the listed choices is a closer approximation of the position the workers would have been in, absent the H-2A program.

One commenter suggested that the current 66,000 visa cap on the H-2B program would be sufficient to flood any particular labor market anyway, assuming all the positions in that labor market were certified by the DOL. Rather than arguing against the use of an AEWR to prevent localized wage depression, this comment simply suggests that localized wage depression is theoretically possible under a prevailing wage concept as provided for under the H-2B program. The Department has not found that entry of workers using H-2B visas has adversely affected local labor markets, because in fact, these workers are employed in a wide variety of industry sectors, including landscaping, hospitality, construction, reforestation, and retail trade. Nevertheless, the Department has noted the concentration of agricultural workers in localized areas and therefore the greater likelihood of adverse effects on local agricultural labor markets. Thus, the Department recognizes the usefulness of an AEWR in the context of the H-2A program.

The Department continues to consider valid the justification cited in the 1989 Rule, stating that even though the evidence is not conclusive on the existence of past adverse effect, DOL still believes that its statutory responsibility to U.S. workers will be discharged best by the adoption of an AEWR in order to protect against the possibility that the anticipated expansion of the H-2A program will itself create wage depression or stagnation. See 54 FR 28037, July 5, 1989.

The Department continues to believe that the use of an AEWR is necessary in order to effectuate its statutory mandate of protecting domestic agricultural workers from the possibility of adverse effects on their wages or working conditions. In drawing this conclusion, the Department follows the approach in the 2008 Final Rule. The Department is firmly committed to the principle that the wage rates required by the H-2A program should ensure that the wages of U.S. workers will not be adversely affected by the hiring of H-2A workers, and therefore declines to jettison the AEWR concept. 73 FR 77110, Dec. 18, 2008.

b. Determining the AEWR

The Department has chosen to calculate the AEWR for each State within a given region as the annual average combined hourly wage for field and livestock workers derived from the USDA's NASS quarterly FLS. Hourly wage rates are calculated based on employers' reports of total wages paid and total hours worked for all hired workers during the survey reference week each quarter.

The FLS is conducted each year in January, April, July and October, and results are published the following month. Annual average estimates for the number of all hired workers, hours worked by hired workers and wage rates are included in the October FLS report, which is published in November. Information about the methodology of the FLS is publicly available at:

http://usda.mannlib.cornell.edu/usda/current/FarmLabo/FarmLabo-11-20-2009.pdf.

The FLS defines work as work done on a farm or ranch in connection with the production of agricultural products, including nursery and greenhouse products and animal specialties such as fur farms or apiaries. It also includes work done off the farm to handle farm-related business, such as trips to buy feed or deliver products to local markets.

The FLS defines hired workers as anyone, other than workers supplied by a services contractor, who was paid for at least 1 hour of agricultural work on a farm or a ranch. Worker type is determined by what the employee was primarily hired to do, not necessarily what work was done during the survey week. The survey seeks data on four types of hired workers: Field workers, livestock workers, supervisors (hired managers, range foremen, and crew leaders) and other workers engaged in agricultural work not included in the other three categories.

The FLS report is based on farmers' gross wages paid to workers grouped into two broad categories: Field workers and livestock workers. Wage rates are not calculated and published for supervisors or other workers, but are for field workers, livestock workers, field and livestock workers combined, and total hired workers. Field workers include employees engaged in planting, tending and harvesting crops, including operation of farm machinery on crop farms. Livestock workers include employees tending livestock, milking cows or caring for poultry, including operation of farm machinery on livestock or poultry operations.

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To the extent workers receive incentive pay, the average wage rate would exceed the workers' actual wage rate. Because the ratio of gross pay to hours worked may be greater than a workers' actual wage rate, some statistics agencies refer to the ratio as average hourly earnings, and not as hourly wages or wage rate.

The FLS also collects data on the number of workers and wages of workers performing agricultural services on farms (

i.e.,

workers supplied by services contractors) in California and Florida. California and Florida account for the preponderance of agricultural service contract labor provided to farms.

The target population for the establishment portion of the FLS is all farms that sell, or would normally sell, at least $1,000 worth of agricultural

products during the year. The target population for the agricultural services survey covering California and Florida is all operations that provide agricultural services to farmers.

The USDA survey is designed to produce statistically reliable estimates of overall hired labor use and costs for California, Florida and Hawaii, and provide data for other States except Alaska under 15 multistate groupings. For California, Florida and Hawaii, the AEWR each year will be set as the annual average of the previous calendar year's four quarterly FLS hourly wage estimates for field and livestock workers (combined) in each of these States. For the other States the AEWR will be set as the annual average of the previous calendar year's four quarterly FLS hourly wage estimates for field and livestock workers (combined) of the FLS multistate crop region to which the State belongs. Every State in the same region will be assigned the same AEWR amount. The State groupings are as follows.

Northeast I

Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont.

Northeast II

Delaware, Maryland, New Jersey and Pennsylvania.

Appalachian I

Virginia and North Carolina.

Appalachian II

Kentucky, Tennessee and West Virginia.

Southeast

Alabama, Georgia and South Carolina.

Delta

Arkansas, Louisiana and Mississippi.

Cornbelt I

Illinois, Indiana and Ohio.

Cornbelt II

Iowa and Missouri.

Lake

Michigan, Minnesota and Wisconsin.

Northern Plains

Kansas, Nebraska, North Dakota and South Dakota.

Southern Plains

Oklahoma and Texas.

Mountain I

Idaho, Montana and Wyoming.

Mountain II

Colorado, Utah and Nevada.

Mountain III

Arizona and New Mexico.

Pacific

Oregon and Washington.

The selection of the Bureau of Labor Statistics (BLS) Occupational Employment Survey (OES) in the 2008 Final Rule was based on an underestimation of its inadequacies. The OES agricultural wage data has a number of significant shortcomings with respect to its accuracy as a measure of the wages of hired farm labor suitable to be used as the AEWR. Perhaps its most substantial shortcoming in this context is that the OES data do not include wages paid by farm employers. Data is not gathered directly from farmers but from non-farm establishments whose operations support farm production, rather than engage in farm production. Therefore, the OES results for the farm workers and laborers, crop, nursery and greenhouse occupation category reflects only the subset of farm workers and laborers employed by agricultural support services employers—companies that provide agricultural labor supply to farmers on a contract basis. The survey does not include data on farm workers who are directly hired by farm operators and represent the majority of hired farm labor. According to the latest OES data, the covered agricultural establishments represent employment of 451,770 hired agricultural workers of all types—about one-third of the 1.2 million total number of all hired farm workers of all types identified by the USDA FLS. Given that the employees of non-farm establishments constitute a minority of the overall agricultural labor force, the Department has concluded that these data are therefore not representative of the farm labor supply and do not provide an appropriately representative sample for the labor engaged by H-2A employers.

The adoption of the BLS OES methodology in the 2008 Final Rule was intended to simplify the wage determination process for the H-2A program while maintaining adverse effect wage protection similar to that previously provided by the FLS. It was never the Department's intention to produce a substantial and across-the-board reduction in the level of wage protection provided by the AEWR. The 2008 Final Rule explicitly stated that the decision to adopt the OES method for computing the AEWR does not reflect any belief on the part of the Department that all AEWRs are currently artificially high and that they therefore should all be lowered. Nonetheless, average wage levels certified under the H-2A program have declined by over 10 percent nationwide: On a State-by-State basis, only seven States did not experience a decline (See Table 1; Data based on the full set of H-2A application records received in fiscal years (FY) 2008 and 2009).

Several commenters representing employers and grower associations questioned the conclusion expressed in the NPRM that the change in the AEWR computation method had negatively impacted wage floors set under the H-2A program and asked for more specific data. Accordingly, the Department has analyzed the records for FY 2008 and FY 2009 H-2A certifications. The FY 2008 certifications included records for 5,392 applications that were fully or partially approved in the last full year of AEWR computation under the procedure specified in the 1989 Rule (relying on the NASS averages for crop and livestock workers). The FY 2009 certifications included 4,857 applications that were fully or partially approved, of which about 40 percent were received before the January 2009 effective date of the 2008 Final Rule and were processed under the 1989 computation method. The fact that in FY 2009 some applications were certified under different methods provides a very useful basis for comparison of the relative impact of the computation method change from the FLS data source to the OES data source. The analysis focused on the applications for hourly paid farm and livestock workers for which the AEWR is most likely to be the wage floor determinant. The analysis excluded 906 applications in FY 2008 and 610 applications in FY 2009 that were applications for custom combine and other specialized equipment operators or cattle or sheep range workers paid on a monthly or weekly basis (the wages for these jobs are determined predominantly by local, crop or livestock specific prevailing wage surveys). The excluded applications had de minimis effect on the comparative averages for FY 2008 and FY 2009 wage comparisons shown below since the excluded observations included approximately equal numbers of applications involving relatively high-paid custom combine operators and relatively low-paid sheepherders. Table 1 shows the National and State average wage certifications for FY 2008, for the applications certified under the 1989 Rule in FY 2009 and for the applications certified under the 2008 Final Rule in FY 2009.

The average wage amounts are the average of the certified minimum wages of the approved applications weighted by the number of workers approved for each application. The average wages reflect the combined effects of the AEWR, the applicable local prevailing wage and the applicable legal Federal or State minimum wage, whichever was highest for each application. In some cases the AEWR was the determining parameter for the wage certified and in other cases a local prevailing wage or a legal minimum wage was the determining parameter. The change in the method of calculating the AEWR is reflected in the changes in the share of applications in which the applicable prevailing wage or legal minimum wage was higher than the applicable AEWR and in the average certified wages for applications processed before and after the change.

The change to the OES method of computing the AEWR resulted in the

average certified wage for H-2A workers decreasing nationwide to $8.02 per hour, an 11.2 percent decrease compared to the $9.04 per hour average for FY 2009 applications that were received before January 19, 2009 and processed under the prior rules, and a 10.8 percent decrease compared to the $9.00 per hour average wage rate for FY 2008 applications, for all of which the wage determination was made under the prior rule. The only States that did not see a fall in the average H-2A wage amount following the implementation of the 2008 Final Rule were Alaska, Delaware, Hawaii, Minnesota, Montana, North Dakota, and South Dakota. These States accounted for 1,252 H-2A workers, less than 2.4 percent of the 52,420 total number of H-2A workers certified under the 2008 Final Rule in FY 2009. It is noteworthy that the decline in average wage certification amounts would have been greater were it not for the significant increase following the implementation of the OES AEWR computation method in the proportion of applications in which the wage floor determination reflects a legal minimum wage or a local prevailing wage greater than the applicable AEWR level. In FY 2009, for applications processed under the 2008 Final Rule (

i.e.,

applications received after January 19, 2009), 60 percent of the applications were approved at a wage higher than the applicable AEWR because the applicable prevailing or legal minimum wage was higher. This is in contrast to only 10 percent in which the AEWR was not applicable among applications processed in FY 2009 under the prior rule.

Table 1—State and National Average Certified H-2A Wage Rates FY 2008 and FY 2009

State

FY 08 average wage level

Pre Jan. 19, 2009 wage level

Post Jan. 19, 2009 wage level

08-09 Change (FY 2008 vs post Jan. 19) chg

09 Change (pre Jan 19 vs post Jan. 19)

AK

$8.00

$8.00

$8.25

$0.25

$0.25

AL

8.52

8.53

7.39

−1.12

−1.13

AR

8.25

8.44

7.42

−0.83

−1.03

AZ

8.55

8.73

8.09

−0.46

−0.64

CA

9.44

9.29

8.65

−0.80

−0.64

CO

8.93

9.45

8.15

−0.78

−1.30

CT

9.63

9.60

9.22

−0.40

−0.38

DE

12.67

9.70

13.78

1.11

4.08

FL

8.62

8.82

7.45

−1.17

−1.37

GA

8.52

8.53

7.31

−1.22

−1.23

HI

10.83

10.86

10.90

0.08

0.04

IA

10.42

10.39

7.46

−2.96

−2.93

ID

8.76

8.77

7.95

−0.81

−0.83

IL

10.09

9.90

7.76

−2.33

−2.14

IN

9.90

9.90

8.53

−1.37

−1.37

KS

9.64

9.85

9.78

0.14

−0.07

KY

8.87

9.13

7.38

−1.49

−1.75

LA

8.19

8.47

8.14

−0.05

−0.33

MA

9.66

9.63

8.30

−1.36

−1.33

MD

9.42

9.70

9.07

−0.34

−0.63

ME

9.68

9.70

9.48

−0.20

−0.22

MI

9.90

10.02

8.24

−1.66

−1.78

MN

9.85

10.03

10.03

0.18

0.00

MO

10.14

10.44

9.56

−0.58

−0.89

MS

8.16

8.45

7.51

−0.64

−0.94

MT

8.78

8.75

9.29

0.51

0.54

NC

8.91

8.88

7.40

−1.51

−1.48

ND

9.66

10.89

11.61

1.96

0.73

NE

9.66

9.90

9.54

−0.11

−0.36

NH

9.67

9.70

8.39

−1.28

−1.31

NJ

9.34

9.76

8.48

−0.86

−1.28

NM

8.59

9.00

8.74

0.15

−0.26

NV

9.28

9.42

8.98

−0.30

−0.44

NY

9.64

9.72

9.13

−0.51

−0.59

OH

9.92

9.96

9.26

−0.66

−0.70

OK

9.06

9.13

8.94

−0.12

−0.19

OR

9.93

9.89

−0.04

PA

9.49

9.70

8.72

−0.77

−0.98

RI

9.63

10.00

SC

8.51

8.53

7.26

−1.25

−1.27

SD

9.68

9.94

10.11

0.43

0.17

TN

8.89

9.10

7.44

−1.45

−1.65

TX

8.83

9.03

8.75

−0.08

−0.28

UT

9.04

9.45

8.85

−0.19

−0.60

VA

8.95

8.87

7.55

−1.41

−1.32

VT

9.66

9.62

−0.04

WA

9.93

9.94

8.74

−1.19

−1.20

WI

9.78

10.04

8.44

−1.34

−1.60

WV

8.65

9.13

7.39

−1.26

−1.74

WY

8.73

9.01

8.45

−0.28

−0.56

Nationwide

9.00

9.04

8.02

−0.98

−1.01

Note: Empty cells indicate no applications.

Because of the proportionate size of the decrease and the widespread extent of the decreases, the Department has concluded that the continued use of the OES method to calculate the H-2A AEWR entails a significant risk that U.S. workers may in the future experience wage depression as a result of unchecked expansion of the demand for foreign workers.

Some employers and employer association commenters suggested that the AEWR computed on the basis of OES data is a better reflection of actual agricultural labor market conditions than the average wage based on the FLS. This view is incorrect and reflects a misunderstanding of the role of the AEWR. As already noted, the AEWR is most relevant in cases in which the local prevailing wage is lower than the wage considered over a larger geographic area or over a broader definition of occupation, crop, and/or activity. In this regard, the OES data are inadequate. The OES data does not include any survey observations of wages paid to workers who are employed directly by farm operators. It only includes data from employers who operate farm support operations, including contract suppliers of temporary farm labor. Workers in agricultural crop and livestock occupations who are employed by support services establishments account for about one-third of total hired agricultural crop and livestock employment. The predominant majority are directly hired by farmers.

In the 2008 Final Rule, the Department recognized this deficiency in the OES data, but assumed that earnings in the support services sector reported in the OES data would be equivalent to, and a reasonable proxy for, wages paid by farm employers. Subsequent analysis of empirical data by the Department has shown that this assumption was seriously flawed. The agricultural occupations of workers employed in the agricultural support services sector (the only sector directly represented in the OES survey results) differ significantly from the vast majority of the agricultural occupations performed by workers who are employed directly by farm establishments. These differences range across characteristics that significantly affect potential productivity and earnings. Based on data from the Annual Social and Economic Supplement (also known as the March supplement) of the U.S. Census Bureau's CPS describing annual earnings, weeks worked, and weekly hours worked for persons with any work experience during calendar years 2004 through 2008, hired agricultural laborers employed by agriculture support services establishments were comprised of 59 percent non-citizens and 41 percent U.S. citizens. In contrast, just 37 percent of similar workers directly employed by farm establishments were non-citizens and 63 percent were U.S. citizens. While the legal status of non-citizen workers in the sample is unknown, it has been generally observed across a wide range of industries and occupations that non-citizens tend to earn lower wages than do U.S. citizens. For example, the CPS data we analyzed showed that across all occupations and industries, mean hourly earnings of non-citizens in the 2004-2008 period were 28 percent less than mean hourly earnings of citizens.

Educational attainment is also an important determinant of earnings. Hired agricultural workers tend to have lower-than-average educational attainment compared to the general workforce, but the differences between hired agricultural workers employed by agriculture service sector establishments compared to those employed directly by farm establishments are striking and reflect in part the higher share of non-citizens found in the agriculture service establishment compared to the farm establishments. For agriculture service establishments, 60 percent of workers had completed no more than the 9th grade, compared to 41 percent of hired agriculture workers employed directly by farm establishments. Over 26 percent of workers employed directly by farm establishments had a high school diploma, compared to 19 percent of those employed by agriculture service establishments, and 15 percent of hired farm laborers employed directly by farm establishments had some post-secondary education, compared to only 6 percent for employees of agriculture support service establishments. These differences in characteristics of hired agricultural workers employed by agricultural support service establishments (the only category of agriculture establishments reflected in the OES wage data) compared to workers employed directly by farm establishments helps to explain the large differences in wages between the two sectors. On average over the 2004-2008 period, persons who were employed directly by farm establishments earned on average $10.87 per hour (median $8.33 per hour), compared to a mean of $9.32 per hour (median $7.15 per hour) for those employed by support service establishments. Whether in terms of mean or median, workers employed in the support services sector earned 14 percent less. All data are in real 2009 dollar equivalent terms.

The Department's error in the 2008 Final Rule of assuming that the OES data for workers employed by agricultural support services establishments would be a reasonable proxy for wages paid by farm establishments was compounded by a second erroneous assumption. In the 2008 Final Rule, the Department added the option for applicants for H-2A workers to specify a skill level for the job opportunity. These skill levels correspond to points on the percentile distributions of wages below and above the OES median for each occupation. The Department assumed that employers would seek a variety of skill levels in occupations for which workers were sought—some higher and some lower than the occupational median, but that the overall result would likely be balanced and average to the median. The FY 2009 implementation experience revealed a significantly different outcome: 73 percent of applicants for H-2A workers specified the lowest available skill level—corresponding to the wage earned by the lowest paid 16 percent of observations in the OES data. Only 8 percent of applicants specified a skill level that translated into a wage above the OES median. This bias toward low skill job specifications compounded the downward wage bias created by the omission of farm establishment observations from the OES data. Both the shift to the OES data source and the use of skill levels contributed to the downward bias in the AEWR-based wage determinations for the applications in which the wage determination was made using the rule for applications received on or after January 17, 2009.

The FLS is the only annually available data source that actually uses information sourced directly from farmers. This is a strong advantage of the FLS as the AEWR data source compared to all other alternatives. The OES data do not include observations of wages paid by farm establishments. Other potential data sources that do include earnings information for hired farm workers employed by farming establishments include the annual CPS work experience supplement (the Annual Social and Economic Conditions (ASEC) supplement), the CPS monthly (outgoing rotation) earner study supplement and the Census Bureau's American Community Survey (ACS). However, the CPS data (both the ASEC supplement and the monthly earner supplement) contain too few

observations for disaggregation of estimates to State or significant multistate regions; the analysis of CPS work experience data for this rulemaking entailed pooling of 5 years of data to obtain sufficient observations. The sample of the CPS is designed to reliably produce total annual labor force characteristics on a State-by-State basis. State (and, to a greater extent, substate) sub-samples of the CPS generally cannot support reliable estimation on a monthly basis for the relatively small category of agricultural employment. Because of a concern about the statistical significance for tabulations covering less than a full calendar year, the BLS does not regard CPS statewide tabulations covering less than a full calendar year as fit for publication and cannot account for seasonal fluctuations in the sub-national monthly CPS tabulations. Furthermore, the ACS data entail an unacceptable time lag of over a year and do not readily allow for calculation of hourly earnings. On balance, the USDA FLS is the best source available.

Many comments by farm organizations, individual farmers, and elected officials expressed concerns that wages vary across the U.S. by geographic location, by specific agricultural occupation, and by level of skill. Therefore, these commenters argued that an AEWR that does not take into account these variables will adversely affect U.S. workers. Accordingly, a farm association proposed that DOL continue using the BLS data to determine the AEWR because it gives a more accurate picture of market-based wages actually being paid for agricultural jobs being performed at various skill levels.

The Department does not agree with the assertion that the OES data provide a more accurate picture of market-based wages. In addition to the fact that the FLS and not the OES includes data about what farm establishments actually pay for hired labor (as discussed previously), the commenters' focus on localized labor market conditions overlooks the important role of the FLS's broader geographic and occupational coverage in protecting domestic workers from wage depression or stagnation resulting from an influx of foreign workers into the context of small, isolated geographic areas or niche crop markets. The FLS sample is distributed across the entire country, with the geographic detail covering 15 multistate regions and 3 stand-alone States. This broader geographic scope makes the FLS more consistent with both the nature of agricultural employment and the statutory intent of the H-2A program. Because of the seasonal nature of agricultural work, much of the labor force continues to follow a migratory pattern of employment that often encompasses large regions of the country. Congress recognized this unique characteristic of the agricultural labor market with its statutory requirement that employers recruit for labor in multistate regions as part of their labor market before receiving a labor certification for employing H-2A workers.

A related consideration is the potential inefficiency of labor market information transmission systems. By providing a prevailing wage defined over a broader geographic area and over a broader occupational span (all field and livestock workers, rather than a narrow crop or job description), use of the FLS provides a check on the expansion of foreign labor importation to prevent undermining job opportunities and wages for domestic farm workers. Using the FLS average wage derived from data across a relatively broad geographic and occupational span reflects the view that farm labor is mobile across relatively wide areas and farm laborers' skills are adaptable across a relatively wide range of crop or livestock activities and occupations. The use of the FLS wage average as an AEWR appropriately limits the importation of foreign labor to cases where the value of the labor need is more than marginal; the relatively higher willingness to pay signaled by farmers who do import foreign workers temporarily under these circumstances (because domestic labor was not immediately forthcoming) may serve to mobilize domestic farm labor in neighboring counties and States to enter the subject labor market over the longer term and obviate the need to rely on importation of foreign labor on an ongoing basis. In this way, the AEWR based on the FLS data source balances the needs of both farmers and domestic farm workers. The 2008 Final Rule did not sufficiently account for these labor market attributes and the Department believes that, by returning to an AEWR based on the FLS' regionally-based methodology, that inconsistency will be remedied.

The employer and employer association commenters that argued that precise tailoring of H-2A wages to local labor market conditions is critical to preventing an adverse effect on wages of U.S. workers may not fully understand the dynamics of farm worker labor markets and labor market information flows described above. Furthermore, those who argue that it is essential that the AEWR have as great a degree of geographic refinement as possible, reflecting market conditions for each locality across the country, miss the essential point that the importation of foreign labor should not serve as an obstacle to normal market adjustment processes and labor mobility in the broader regional market perspective. We have carefully considered the arguments of some commenters that the aggregation of a widely diverse national agricultural landscape into just 15 regions (and 3 stand-alone States) results in extremely broad generalizations that fail to account for specific market conditions at the local level. After due consideration, we conclude that a broadly-based AEWR protects the long-term well-being of domestic workers in terms of wages and access to job opportunities and it also benefits farmers in the long-run by preserving market adjustment processes that encourage efficient allocation of resources, innovation, and adaptation to changing competitive circumstances.

DOL consistently has set statewide AEWRs rather than substate or crop-specific AEWRs because of the absence of data from which to measure wage depression at the local level. To the extent that wage depression does exist on a concentrated local basis, the USDA's aggregation of wage data at broad regional levels immunizes the survey from the effects of any localized wage depression that might exist.

Many employer and association commenters expressed concern that an appropriate AEWR that reflects market realities and labor costs should include wage data relating to the specific occupation and level of skill or experience required for a position.

Several farm organizations and individual farmers expressed concerns that the FLS produces an artificially high wage rate, in part because it includes many occupations which are not related to the jobs H-2A workers are hired to perform. Commenters also argued that the Department's reliance on USDA FLS data does not provide refined data by skill level or experience, occupations, or geographic locales of workers typically sought by agricultural employers in the H-2A program. Commenters also pointed out that the USDA FLS population includes not only the lower-skilled crop field workers typically sought by agricultural employers who turn to the H-2A program for labor, but also inspectors, animal breeding technicians, and trained animal handlers—all occupations that provide a poor basis for determining H-2A wages because they are rarely, if ever, filled by H-2A workers. In response to these comments,

we examined the records of FY 2008 and FY 2009 H-2A applications and found numerous examples of requests for foreign workers to fill jobs as inspectors, animal breeding technicians (inseminators), and other specialized occupations. For example, the FY 2009 applications included requests for 12 equine trainers and breeding specialists, 38 agricultural product inspectors and graders, 5 non-equine animal trainers, 43 operating engineers, 312 beekeepers, 25 artificial inseminators, 23 logging crane operators, 18 farm equipment mechanics and 14 reptile specialists. Therefore, this objection to the use of FLS data is unfounded.

The OES occupational detail is a unique feature of the survey. One State agriculture department noted that this approach allows local farmers and ranchers to reimburse immigrant workers with fair, market-based wages specific to the location of employment. It is also in part the reason that the survey is used in other foreign worker programs administered by the Department, including the H-1B and H-2B programs.

The Department believes that the BLS OES wage survey suffers from higher error rates than the USDA FLS, and is a less reliable source of data about farm workers' wage rates. One study of OES data found that employment in some of the metro and non-metro areas is very small, increasing relative standards errors. For example, for the occupation of farm workers and laborers, crop, nursery, and greenhouse employment numbers may be very small for some States—see Kentucky (200) or West Virginia (190) as compared to California (146,220). As expected, the subsequent relative standard errors for States with few observations is relatively high—meaning that the reliability of the wage statistics is relatively low, which result in data that are not precisely measured. For example, the 90 percent confidence interval for the $8.28 hourly mean wage for California is from $8.20 to $8.36 as compared to the 90 percent confidence interval for the $11.52 hourly mean wage for Montana which is from $10.24 to $12.80. Furthermore, a SWA noted that the OES survey program used in the 2008 Final Rule is a complex, confusing system resulting in multiple H-2A wage rates for various geographical areas within a State.

Several farmers pointed out that another unique feature of OES is that it offers the ability to establish four wage level benchmarks commonly associated with the concepts of experience, skill, responsibility, and difficulty variations within each occupation. The four skill levels for each occupation afford the employer and the Department the opportunity to more closely associate the level of skill required for the job opportunity to the relevant OES job category and, in turn, the appropriate AEWR.

The Department has carefully considered these comments and does not find the notion of meaningful skill differences among most agricultural workers to be generally credible. The perception expressed by some commenters that the OES data actually differentiates workers by skill is simply false. The OES wage levels are not determined by surveying the actual skill level of workers, but rather by applying an arithmetic formula. These are arbitrary percent cut-offs of the distribution of earnings within the occupations. Therefore, the associated occupational skill levels are not well defined, and H-2A wage differences do not accurately reflect meaningful differences in skills or job complexity.

Moreover, the Department finds that the notion of meaningful skill differences among agricultural workers is unfounded. Most of the occupations and activities relevant to the H-2A program involve skills that are readily learned in a very short time on the job,

11

skills peak quickly, rather than increasing with long-term experience, and skills related to one crop or activity are readily transferred to other crops or activities.

11

According to the Employment Projection Program at BLS, for crop, nursery, and greenhouse farm workers and laborers, the most significant source of post-secondary education or training is short-term on-the-job training. See

http://www.bls.gov/opub/mlr/2007/11/art5full.pdf.

The preamble to the 2008 Final Rule states that the Department is statutorily obligated to use the four-tier wage system. Although the relevant statute is not clear on its face, the Department has now concluded that this statement is an incorrect reading of the statute. The legislation establishing the four-tier system was part of the Consolidated Appropriations Act 2005, Pub. L. 108-447 and is contained in a section titled the L-1 Visa and H-1B Visa Reform Act. The specific part of that Act describing the four-tier system, sec. 423, is titled H-1B Prevailing Wage Level. In addition, the legislation specifically identifies the visa categories to which it applies and H-2A visas are not included in the list. While the Department had the discretion to use the four-tier system in the H-2A program if the facts supported that outcome, it is simply wrong to state that the Department is statutorily required to use it. Moreover, for the reasons stated above, the Department has concluded that the OES four-tier wage system is inappropriate for use in the H-2A program.

(i) Survey Frequency and Data Availability

The FLS and publication schedule provide timely data for purposes of calculating the relevant State AEWRs. Specifically, the FLS is routinely available and published within 1 month of the survey date. The quarterly gathering of data ensures that the annual averages are more accurately reflective of the fluctuations of farm labor patterns, which are by definition seasonal and thus more subject to fluctuation than other occupations. The scope and frequency of the survey means that all crops and activities now covered by the H-2A program will be included in the survey data and that peak work periods also will be covered. This is in contrast to the OES data, which are published 1 year after collection of the most recent data panel. Furthermore, OES data are only collected in May and November, which are not times of peak work for many crops and activities covered by H-2A.

(ii) Accuracy of Data

The Department also weighed concerns over the accuracy of AEWRs based on the USDA FLS because the FLS is not based on reported hourly wage rates. Instead, the USDA's FLS asks employers to report total gross wages and total hours worked for all hired workers for the two reference weeks of the survey. Based on this information, the survey constructs annual average earnings for the broad general categories of field workers and livestock workers as the ratio of gross wages to hours worked. The hourly AEWR thus is not based on reported hourly wages, but rather on the basis of the numerator (total gross wages for the combined occupations) and denominator (total hours for the combined occupations) derived from the information supplied by employers.

The USDA FLS asks employers about their workers' total earnings and total hours worked to derive average hourly rates. In OES, establishments report the number of workers in a certain occupation earning within each of 12 wage intervals. To calculate the mean hourly wage of each occupation, total weighted hourly wages are summed across all wage intervals and divided by the occupation's weighted survey employment. Furthermore, the mean hourly wage rate for all workers in any given wage interval is not computed using grouped data collected by the OES survey. Rather, the mean wage for each interval is based on occupational wage

data collected by the BLS Office of Compensation and Working Conditions for the National Compensation Survey (NCS). Although smaller than the OES in terms of sample size, the NCS program, unlike OES, collects individual wage data. However, agriculture establishments are excluded from the scope of the NCS. Farm worker data is derived from workers employed through companies listing themselves as nonagricultural establishments. Therefore, the Department believes that the FLS is superior to the OES for purposes of computing the H-2A AEWR.

(iii) The Department's Decision To Return to the NASS FLS Methodology

Even if one accepted the argument that the geography, occupational, and other attributes of data available from the OES are desirable features, the Department finds that none of these individually or together would offset the disadvantage that the OES does not gather data directly from farmers but from non-farm establishments whose operations support farmer production, rather than engage in farm production. For example, the OES results for the farm workers and laborers, crop, nursery and greenhouse occupation category reflects only the subset of farm workers and laborers employed by agricultural support services employers—companies who provide agricultural labor supply to farmers on a contract basis. The survey does not include data on the majority of farm workers who are directly hired by farm operators. Because the data demonstrate that workers employed by support services establishments are less educated and less likely to be U.S. citizens than employees of farm establishments, and therefore typically have substantially lower wage rates, the OES survey is not an appropriate data source for ensuring that the importation of guest workers does not adversely affect U.S. workers.

For this and all of the other reasons discussed, the Department will return to its 1987 Rule methodology for the formulation of the AEWR. The Department will annually publish for each State within a given geographical region the AEWR based on the average combined hourly wage for field and livestock workers for the four quarters of the prior calendar year from the USDA's NASS FLS.

c. Collective Bargaining Wage

The Department did not propose adding the term collective bargaining wage in the provision regarding the required wage to be offered. Several commenters, however, suggested that the Department address the use of collective bargaining wages in required wages. Some commenters suggested that the collective bargaining wage rate be cited as the first wage to be imposed, looking to the highest of the AEWR, prevailing, or minimum wages only in the absence of a collective bargaining wage rate, in order to recognize that wages paid under collective bargaining agreements between a union and an employer do not adversely affect the wages of workers similarly employed. Others suggested the Department recognize wages set by collective bargaining agreements as prevailing, in the alternative or as an exception to the AEWR.

After consideration, the Department has decided to amend the provision to add the term an agreed-upon collective bargaining wage to the required wage rate options for employers. This amendment requires employers to use a collective bargaining wage if it is the highest wage, thus avoiding the potential payment of a collective bargaining wage that is less than the other wages. At the same time, it acknowledges the role of the collectively bargained wage as a potential legitimate wage.

d. Increase in Prevailing Wage During the Contract Period

In the NPRM, the Department proposed that if the prevailing wage rate is adjusted during the work contract and the new adjusted wage is higher than the required wage at the time of certification, the employer must pay that higher wage upon notification by the Department. We are retaining this requirement with modifications based on (a) above.

The Department received several comments in favor of this proposal. One commenter expressed support for the proposed increase but suggested the Department further amend the requirement to include within the list of applicable wages the hourly wage or piece rate paid to the employer's non-H-2A workers in the current or immediately preceding season for comparable employment. The Department declines to adopt this recommended change as not necessary to fulfill the statutory requirement to ensure that U.S. workers are not adversely affected.

Some commenters opposed the proposed adjustment, contending in one case that the proposal is contrary to current practice in other temporary programs, and that the Department provided inadequate justification for the change. These commenters also indicated that the application in mid-season of any increase would be detrimental to employers who have already budgeted for the season based on wages in effect at the time of recruitment.

Employers participating in the H-2A program have historically been required to offer and pay the highest of the AEWR, the prevailing wage or the Federal or State minimum wage at the time the work is performed. The wage adjustment under this provision is intended to ensure that the workers in the program are consistently receiving at least the highest of the applicable wages. As explained above, the wage adjustment also ensures that the wages reflect the wage in the area of intended employment in those relatively rare cases when that wage exceeds the AEWR. Accordingly, this adjustment, as stated in the Final Rule, will only affect a limited number of employers whose OFLC-approved offered wage rate falls below the permissible floor once the new wage rates are issued.

The Department recognizes that these wage adjustments may alter employer budgets for the season. However, the change is intended to ensure workers are paid throughout the life of their contracts at an appropriate wage. Therefore, employers are encouraged to include into their contingency planning certain flexibility to account for any possible wage adjustments.

6. Section 655.121 Job Orders

a. Area of Intended Employment

(i). Submission of the Job Order to the SWA

The Department proposed to continue the longstanding practice of requiring employers to submit job orders to the SWA serving the area of intended employment for intrastate clearance in order to test the local labor market and determine the availability of U.S. workers before filing an Application. The Department further proposed that if the job opportunity is located in more than one State within the same area of intended employment, the employer may submit a job order to any one of the SWAs having jurisdiction over the anticipated worksites to place the job order. The Final Rule also requires that the SWA must forward the job order to the companion SWAs to have it placed in all locations simultaneously.

The Department received several comments on this proposal. A farm worker advocacy association commented that the filing of the job order alone and the elimination of the contemporaneous filing of the Application inappropriately reduces the oversight by the OFLC during the early

stages of the H-2A process. This commenter was concerned about the sufficiency of OFLC oversight during the pre-certification period when OFLC staff previously used this period to address serious deficiencies in the Application that affected material terms of employment and recruitment, including job terms and conditions as publicized to both U.S. and foreign workers.

Several commenters supported the Department's proposed regulation. One noted that it would reintroduce much-needed checks and balances into the process. Others indicated that the submission of the job order and initiation of recruitment prior to certification would increase the potential for hiring local workers. They also suggested that recruitment of U.S. workers may satisfy the need for agricultural labor and eliminate the need for a labor certification. As noted in the NPRM, the INA requires employers to engage in recruitment through the job clearance system, administered by the SWAs. See 8 U.S.C. 1188(b)(4); see also 29 U.S.C. 49

et seq.,

and 20 CFR part 653, subpart F. Accordingly, the Final Rule retains the language of the NPRM.

(ii). Submission 75-60 Days Prior to Date of Need

The Department proposed to retain the 2008 Final Rule requirement that the employer submit the job order to the SWA no more than 75 calendar days and no fewer than 60 calendar days before the date of need. The Department received several comments about this proposal. The Department received two comments from State agencies supporting the longer recruitment timeframe, one noting that the timeframe will permit the SWA to review the proposed terms and conditions, assure that the wages offered meet the required wage, and commence required recruitment by placing the job order into intrastate clearance.

Most commenters, however, opposed the 75 to 60 day recruitment period. Many of them advocated a return to the 45-day posting of the job order, reasoning that it provides a more appropriate timeframe for employers to assess the local job market as well as to anticipate labor demands of the coming crop. Other commenters explained that growers, particularly small and mid-sized growers, must account for a variety of factors in order to decide what crops to plant and the amount of acreage, and that they do not make those decisions 75 to 60 days in advance. These commenters also expressed the concern that very few local agricultural workers commit to a job 75 to 60 days in advance and many of those who do commit often do not report for work on the date of need. One of these commenters expressed concern that the longer recruitment period would penalize employers because early hires may no longer be available at the time the work begins, leaving the employer with a labor shortage.

A few commenters echoed the same concerns and argued for a shorter timeframe. These commenters criticized the Department's rationale for extending the recruitment period. The same commenters referenced the Department's statements in the NPRM indicating that the use of the H-2A program since the implementation of the 2008 Final Rule has decreased, arguing that there should be less need for a longer timeframe due to fewer demands on the Department's resources.

Many commenters advocated for the return to the 45-day timeframe because the shorter recruitment period would be counterbalanced by the 50 percent rule that tends to provide longer exposure to H-2A job opportunities for U.S. workers. One commenter argued that the longer recruitment period was more acceptable when it was combined with a shorter 30-day referral period. Another commenter, a State farm bureau, also opposed the proposal, noting that the 15 to 30 days' increase in pre-employment recruiting was initially implemented by the Department in exchange for the elimination of the 50 percent rule and reduction in the referral period to 30 days after the start date.

One commenter noted that the Department presented no evidence indicating that referrals made further from the date of need are more numerous than those closer to the date of need. Another referred to Congressional testimony from a former association executive asserting that in his experience recruiting closer to the date of need produces more applicants and that prospective job applicants in these industries do not look for work 120 or even 45 days in advance.

A law firm representing growers urged the Department to allow growers to file their proposed job orders on the shortest, most administratively feasible timeframe. It also noted that the Department's policies should be designed to allow flexibility and entrepreneurial expansion and development of agricultural production and work opportunities, and not restrict the growth of job opportunities or agricultural products.

Some commenters cited the statement in the NPRM that the Department approves most applications by the 27th to 29th day before the date of need as evidence that the current system of filing on the 45th day before the date of need and certifying by the 30th day before the date of need is working and need not be changed. The Department is bound by the statute to make a final determination on each temporary agricultural labor certification by the 30th day before the date of need. The fact that the Department is generally able to meet the statutory deadline does not mean that the Department is able to certify based on a robust record of the employer's recruitment efforts. As discussed above, the extension of the recruitment period will enable the Department to make its certification with better information on recruitment.

Based on its long program experience, the Department believes that beginning recruitment 45 days before the date of need is insufficient because it provides the Department with only 15 days to assess the availability of U.S. workers in the relevant job market and to permit them sufficient time to seek and be hired for these jobs. (In fact, since it must first accept the Application and authorize recruitment, the Department has traditionally had only about a week to review recruitment efforts.) The Department has determined that the 75 to 60 day timeframe most adequately balances the Department's statutory duty to ensure that U.S. workers have access to meaningful employment opportunities (and are not adversely affected by the employment of foreign workers), with the agricultural employers' legitimate need to meet labor demands. In response to the commenter's argument that unpredictable factors often affect an employer's labor needs, the Department notes that its Final Rule retains a provision that permits an employer to amend its Application prior to certification to increase the number of workers needed. Giving growers the ability to request additional workers is intended to provide flexibility and account for the contingencies affecting agricultural production. Furthermore, the Department recognizes that some local job applicants who accept an offer of employment in agriculture, as in all other industries, on occasion fail to report for work as agreed. Employers in those circumstances must temporarily re-distribute the workload while seeking to hire a replacement. We reemphasize that while the Final Rule permits the submission of the job order as much as 75 days before the start date, employers are only required to submit their job orders 60 days prior to the start date. The Department believes that this

timeframe enhances the ability of domestic workers to access these employment opportunities.

As discussed throughout this Final Rule, the Department's primary concern with respect to its statutory mandate is restoring necessary protections to U.S. and foreign workers while maintaining a fair and reliable process for addressing legitimate employer needs. As adopted, the 75 to 60 day timeframe is necessary to ensure the orderly and timely administration of the program and provides the necessary flexibility for the Department, the SWAs and employers to meet the program's statutory requirements and objectives. The demand on Departmental resources, although relevant, is not a decisive factor in implementing a workable timeframe.

The Department has determined that in addition to providing U.S. workers with longer exposure to H-2A job opportunities through the reinstatement of the 50 percent rule, the longer pre-filing timeframe will ensure that the job order meets all applicable programmatic requirements. The Department has determined that both a longer recruitment period and a longer referral period are necessary to meet the statutory and policy objectives of the H-2A program. While there had been some discussion about balancing the initiation of recruitment with the termination of the employer's obligation to hire domestic applicants, the two issues are unrelated and deal with different aspects of recruitment. The need to start the recruitment process slightly earlier will also assist the Department to more effectively meet our obligation to make a certification decision 30 days before the start date. This is unrelated to the need to ensure the continued availability of these positions to U.S. workers through post-certification hiring requirements. We have discussed above why recruitment needs to start at least 60 days before the start date. We discuss later in this preamble why the Department has determined that the post-certification hiring is best met through the 50 percent rule.

Having considered the issues raised by commenters, the Department has decided to keep the provision in the Final Rule. Therefore, the Department has determined that the 75 to 60 day timeframe provides adequate time to resolve any pre-filing issues in a way that will not negatively impact the employer's ability to timely meet its labor needs.

b. SWA Review

In the NPRM the Department proposed that SWAs review the contents of the job order and address any noted deficiencies. As noted above, it also provided for the involvement of the Certifying Officer (CO) to resolve any issues regarding the placement of job orders in the intrastate clearance system. The Department received a number of comments addressing this provision. Many of the commenters expressed concern over the broad discretion granted to the SWAs to determine the sufficiency of the job order, and the lack of CO involvement to resolve outstanding issues prior to the filing of the Application. These commenters proposed to limit the SWA review to a specified timeframe.

A few expressed support for the retention by the OFLC of ultimate decision-making authority regarding the sufficiency of job orders but expressed concern over what they deemed an inordinate level of decision-making authority in the hands of the SWAs. These commenters were primarily concerned with the resulting lack of uniformity in adjudication and enforcement due to differences between the SWAs in rule interpretation and the likelihood that disparate adjudications will result in confusion for both employers and workers.

One commenter stated that having multiple points of acceptance will cause confusion and disruption in program use for large and small growers because States may differ from one another in their interpretations of the statutory and regulatory requirements and some are not even consistent internally. In addition, the commenter was concerned about the potential for inconsistency between what the SWA accepts at the pre-filing stage and the later determination by the CO regarding the sufficiency of the job order.

Another commenter indicated support for the reduced role of the SWAs in the H-2A labor certification process under the 2008 Final Rule. This commenter contended that most of the delay in processing of H-2A visas has been caused by SWA staff, who it asserted have been slow to perform their duties under the program. This commenter proposed that the Department limit the role of the SWAs to the inspection of worker housing and workplace conditions after approval.

A large growers' association expressed dissatisfaction with the process for placing job orders with the SWA. It asserted that since the filing of the Application is predicated on the acceptance by the SWA, the Department failed to provide a meaningful relief mechanism for employers to address issues with the SWAs imposing unwarranted requirements.

The Department expressed above its belief that SWAs remain, as they have always been, the arbiters of the acceptability of job orders. The Department also recognizes the need for employers to have an acceptable and timely process by which orders are fully evaluated and issues addressed with each SWA. Therefore, the Department has decided to amend its procedures for SWA acceptance of the H-2A job order to allow for a timely process of the acceptance or rejection of job orders.

Under the INA, the Department has the ultimate responsibility for all labor certification determinations. The Final Rule does not abrogate that authority. However, the Department has determined that the involvement of the SWAs at the outset of mandatory recruitment will benefit the process because, as discussed above, SWAs have unique expertise in assisting employers in preparing job orders and making initial determinations regarding their sufficiency. In addition, SWAs are experienced in providing services to farm workers and helping them navigate the employment process. In order to balance our obligations under the INA with involvement of the SWAs in the process, the Final Rule creates a process so that disagreements between the employer and the SWA about the contents of the job order can be expeditiously resolved. This provision also ensures uniformity of determinations and places the ultimate decision regarding the sufficiency of a job order with the CO.

The Department's Final Rule therefore adopts a process in which the SWA must either accept or reject the job order. After considering comments advocating that the Final Rule include a timeline, the Department has determined that 7 calendar days, rather than the 5 days proposed by some commenters, provides the SWA with adequate time to make a determination on even the most substantial job orders. In the event the SWA and the employer cannot reach a mutually agreeable solution regarding the job order in the timeframe outlined in the revised regulation, the SWA must reject the job order by written notice specifying the reasons for rejection,

i.e.

the deficiencies in the job order, to the employer, and the employer must respond. The Final Rule adds the requirement that once the employer responds to the SWA notification of deficiencies, the SWA must respond to the employer's response within 3

calendar days. If the job order deficiencies still remain unresolved, the Department's regulations permit the employer to use the emergency filing procedures to file its Application (and the job order) directly with the National Processing Center (NPC); such circumstances will constitute the good cause contemplated by that provision. The CO will then follow the procedures for accepting or rejecting the job order as outlined in this revised provision.

The Department's regulations provide for the involvement of the CO in instances where issues with the job order are not resolved between the employer and the SWA. As explained above, the Department's Final Rule adopts a timeframe under which the SWA must either accept or reject the job order within 7 calendar days and respond within 3 calendar days where the employer responds to the notification of deficiencies. If the deficiencies remain unresolved, the Final Rule provides for the filing of Applications on an emergency basis where the employer and the SWA cannot reach a timely resolution regarding the placement of the job order.

The Department does not anticipate significant discrepancies between SWA determinations in various States. In our experience, differences in SWA processing of job orders are often attributable to the differences in experience with the local industries and labor markets, and the resulting distinctions in treatment are legitimate outgrowths of those differences. The Department is relying on the SWAs to apply their broad, historical experience in administering our nation's public workforce system and understanding of the practical application of program requirements to the process of clearing job orders. SWAs process job orders as part of their essential functions and have processed H-2 and H-2A job orders since the inception of the program. Employers are encouraged to work with the SWAs early in the process, including on crafting the requirements of job orders, to ensure that their job orders meet all requirements, and are timely accepted for intrastate clearance. In addition, the Department anticipates that CO determinations about job orders will in most instances agree with those of the SWA. The Department will provide training and on-going guidance for the SWAs and program users, in order to foster a clear understanding of program and other regulatory requirements and ensure uniformity in determinations.

c. Intrastate Clearance

The Department proposed to continue the requirement of having the employer whose job opportunity is in more than one State file with only one SWA serving the area of intended employment.

A commenter suggested that each work site be evaluated to determine whether there is more than one area of intended employment for a particular job opportunity. This commenter proposed a change to require that the employer simultaneously submit a job order to each SWA serving an area of intended employment where the job opportunity is located in more than one State.

An individual commenter proposed that the SWA placing the job order in intrastate clearance share the listing with other SWAs in States bordering the State containing the area of intended employment. This commenter argued that State lines should not stand in the way of recruitment of local residents where the area of commuting distance encompasses more than one State. This commenter further argued that permitting the forwarding of job orders to neighboring States would save the employer the costs of applying for an H-2A labor certification if the employer is able to fill the job openings with local workers.

The Department agrees with the intent of these comments and has modified the rule to require the SWA to forward the job order to the other SWAs having jurisdiction over the area of intended employment. However, we believe the requirement for filing with multiple States would be confusing to employers and place an undue burden on them. Since SWAs have existing mechanisms to accomplish this task, this is a more appropriate activity for the SWA, rather than the employer, to undertake.

d. Duration of Job Order Posting

The Department is clarifying that Form ETA-790, the

Agricultural and Food Processing Clearance Order,

is to be used for the submission of the job order to the SWA. The Department received one comment opposing duplication in filing and processing arguing that the most substantive and voluminous portion of an application is the Form ETA-790. The Form ETA-790 must be used by all employers seeking to recruit agricultural labor in the U.S., pursuant to the Wagner-Peyser regulations at 20 CFR 653.401. Those regulations were not part of this rulemaking so this comment was not considered.

e. Modifications to the Job Order

The Department proposed a process for the modification of job orders. Several commenters expressed concern regarding the proposed provision permitting the CO to direct modification of a job order after SWA acceptance and before the issuance of a labor certification. Some of the commenters argued that there should be finality in the process, including one point of acceptance for a job order. Some commenters further argued that since the employer is held to the terms and conditions offered in the job order, the SWA and the CO should be bound by the acceptance of those terms and conditions. A couple of commenters expressed concern that corrections to the job order after SWA acceptance and placement in intrastate clearance may result in different groups of potential workers being recruited under differing terms, and noted that workers recruited under a particular job order need to be able to rely on the terms and conditions offered. One of these commenters proposed that the Department limit all modifications after acceptance to significant emergency situations such as Acts of God. Another commenter opposed the provision permitting the CO to direct an employer to modify the job order after a finding that the previously accepted terms and conditions fail to fully comply with program requirements. This commenter indicated that this provision violates 8 U.S.C. 1188(c)(2), which requires DOL to state any deficiencies that it finds in a labor certification application within 7 days.

The INA requires the Department to note any deficiencies in the employer's Application within 7 days from receipt. We do not interpret the provision requiring the Department to accept or reject an Application within 7 days to limit the Department from requiring modifications after acceptance. The INA cannot mean that the SWA's acceptance of the Application forces the CO to overlook any apparent violations. To interpret the statute in that way would require the Department to either accept Applications which contain apparent violations or to reject the Applications without giving the employer the opportunity to correct the apparent violation of program requirements. With respect to concerns about worker reliance on a job order that subsequently has been modified, employers will now be required to notify all workers recruited pursuant to that job order of any material change in the terms and conditions of employment, particularly to the extent that the terms of the job

order constitute part of the work contract as described in § 655.122(q).

Another commenter argued that the Final Rule needs to address changes by employers when changes are necessary because of unforeseen business necessities that arise during the time between the beginning of the recruitment period and certification.

The Final Rule retains a provision from the NPRM permitting the employer to request modification of a job order before filing the Application. As discussed above, many commenters noted that at this point, 45 days from the date of need, most employers would have a better idea regarding their plans for the season, including their labor needs. Therefore, the Department's Final Rule retains the limitation on employer modification of job orders.

f. Elimination of Requirement That SWAs Must Verify Employment Eligibility (Form I-9, E-Verify)

As explained in the NPRM, the Department proposed to eliminate the requirement that SWAs must complete the employment eligibility verification process (Form I-9 or Form I-9 plus E-Verify) for all workers referred to the employer by the SWA under a job order. The Final Rule follows the NPRM and no longer requires SWAs to verify employment eligibility. This approach is logical and consistent with employers' discretion and duties concerning all new hires—including the checking of references, qualifications, etc. Nothing in the INA or these regulations precludes the States from performing employment verification voluntarily or pursuant to State law, nor do they prevent the employer from relying on verification performed by the SWA so long as it meets certain verification standards as set out in applicable DHS regulations.

In their traditional role, the SWAs are only required to refer candidates whose qualifications match the terms and conditions of the job order to an employer's job opportunity. Requiring one small subset of applicants who apply for H-2A positions to be subject to employment eligibility verification raises the possibility of disparate impact.

A SWA referral does not in itself constitute an offer of employment because the referred individual may be rejected for lawful, employment-related reasons. In addition, the Department believes that SWA resources are most effectively directed to the core functions of the public workforce system, such as clearing job orders. For all the reasons discussed above, the Department has retained the language from the NPRM and eliminated the requirement that SWAs verify employment eligibility of potential employees referred in connection with an H-2A job order.

The Department received comments both for and against the elimination of employment eligibility verification by the SWAs. Several commenters expressed support for the Department's decision to return to the previous practice of permitting the SWAs to determine for themselves the method by which they would ensure workers were eligible for referral.

Several commenters offered strong support for the Department's proposal to remove the requirement that the SWA verify the employment eligibility of job seekers before referral. Most of these commenters explained that placing the burden of verification on the SWAs in the 2008 Final Rule was inappropriate and that it required States to impose a greater barrier for people seeking H-2A job openings than on others, resulting in disparate treatment of protected classes. One SWA further indicated that people not authorized to work in the U.S. are unlikely to seek work through government-run One-Stop Career Centers. Another SWA noted that the Department simply lacks statutory authority to require SWAs to conduct employment eligibility verification because 8 U.S.C. 1324a permits, but does not require, SWAs to complete I-9 forms with regard to individuals they refer to jobs. One of these SWAs also noted that it will continue to refer eligible job seekers using its current right-to-work verification process, codified in its State law. Another SWA voiced support for the elimination of the requirement and pointed out that States are not funded to provide I-9 verification. Another commenter indicated that freeing the SWAs of verification responsibilities was a positive development given that the proposed regulations call for greater SWA involvement in recruitment.

A few employer organizations objected to the elimination of the verification requirement on the grounds that employers are required to hire referred workers and that the SWAs should not refer workers who are not eligible to be employed.

Other commenters discussed what they characterized as an impermissible shifting of the financial and administrative burden of employment verification back to employers who are already facing difficult times and rising production costs. One commenter, a farm bureau, noted that the resource issue for SWAs is no different than the resource issues that family farmers regularly face but who verify employment eligibility nonetheless. Another farm bureau described the proposal of reverting to employer verification as contrary to the Administration's commitment to eliminating illegal immigration.

Other commenters opposed the change in the requirement, noting that the elimination of the requirement would burden the employers whose Applications were only partially certified based on the number of referred local workers who later turn out to be ineligible for employment. Another commenter contended that, in the absence of SWA verification, the Department should not count the SWA referrals against the number of workers requested by an employer on an Application.

Other commenters accused the Department of compromising its obligation to protect the jobs of domestic workers by eliminating the employment eligibility verification requirement. One of these commenters further asserted that the Department should take responsibility for the referral activities of its State partners and that the elimination of the employment eligibility verification signifies that the Department condones the employment of illegal aliens, which contributes to low wages, inadequate housing and a shortage of viable job opportunities for U.S. workers. Another commenter noted that the elimination of the verification requirement undercuts the role of the SWA to determine the availability of U.S. workers for employment before the filing of an Application. This commenter asserted that the SWA's inability to determine the work authorization of workers recruited and referred under the job order fails to meet the SWA's legal obligation to determine that sufficient able, willing, and qualified U.S. workers are available.

Several commenters expressed concerns that without SWA verification, at least 75 percent of referred workers will later prove ineligible for employment, with one commenter citing examples from its experience. Most of these commenters further argued that the referral of ineligible workers will place a burden on employers either to continue to employ ineligible workers and run the risk of employer sanctions, or dismiss these workers and find replacement workers in time.

Several commenters opposed the change in the requirement, pointing to the 2008 Final Rule's interpretation that 8 U.S.C. 1324a and DHS regulations at 8 CFR 274a.2 and 274a.6 require the SWA to verify employment eligibility

before referring applicants to the employer. Another commenter challenged the Department's distinction between a referral and an offer of employment, asserting that the distinction is meaningless since the employer has no option to refuse to hire the worker referred by the SWA if that person is willing, able, and qualified for employment. Another commenter argued that the SWA is statutorily required to verify employment eligibility of referrals because 8 U.S.C. 1188(c)(3) lists as one condition for certification a requirement that the employer does not actually have or has not been provided with

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