Summary. The U.S. Department of Labor (DOL) issued an interim final rule that helps reign in wage levels based on prior wage calculations. This immediately changes how the Adverse Effect Wage Rate (AEWR) is set for H-2A non-range occupations (all H-2A jobs other than open-range herding/production) and should largely reduce costs for farmers. The rule introduces a standardized downward “H-2A adverse compensation adjustment” of $1-$3 per hour that may be applied to H-2A workers when the employer provides no-cost housing, while U.S. workers in corresponding employment must still be offered the unadjusted AEWR. This helps reduce the costs of farm labor while ensuring US workers are not adversely affected. Effective date: October 2, 2025. Comments due: December 1, 2025.
What Changed
- Updated Data source: AEWRs will now be based solely on OEWS (not the discontinued USDA Farm Labor Survey) to “establish more precise skill-based AEWRs for all job opportunities specific to each state.”
- Two skill levels: DOL will publish statewide AEWRs at Skill Level I (Entry-Level) and Skill Level II (Experience-Level), determined by the qualifications in the employer’s job offer (education/training/experience).
- Skill Level I will be paid a wage based on the average rate paid to the lower third of all workers in the “Big 5” SOC codes or specific SOC code for other roles
- Skill Level II will be paid at the OEWS average
- “Field & Livestock (combined)” occupations: For the five most common SOCs (crop/nursery/greenhouse workers; farm/ranch/aquacultural animals; ag equipment operators; graders/sorters ag products; packers/packagers-hand), DOL will publish a single statewide AEWR at both skill levels. Other SOCs (e.g., mechanics, construction support) receive SOC-specific AEWRs at two levels.
- Housing-based adjustment (H-2A workers only): DOL will publish a state-specific downward adjustment that may be deducted from the H-2A worker wage when the employer provides housing at no cost; U.S. workers in corresponding employment must be paid the full AEWR rate. The Federal Register includes a table of wages and adjustments by state, noting that in Iowa the wage for Skill I is $14.20 and Skill II is $18.87 with a -$1.15 H-2A adjustment to account for employer-provided housing.
- Annual publication timing: DOL plans to publish updated non-range AEWRs on July 1 each year going forward, which aligns to OEWS release cycles.
Who Is Covered
- Covered: All H-2A non-range job opportunities filed on/after Oct. 2, 2025, including emergency filings. Existing certified job orders continue under their stated wages through the work contract if those wages remain greater than the new AEWR.
- Not covered: Range herding/production occupations (unchanged by this rule).
Effective Dates & Comment Period
- Effective: October 2, 2025.
- Comments due: December 1, 2025.
Practical Impacts for Employers
- Budgeting & offers: Many states may see lower Skill I AEWRs than recent FLS-based rates, particularly for the “field & livestock (combined)” SOCs. However, Skill II and non-“Big 5” SOCs may be higher depending on market wages. Review the updates for your work locations and employee occupations.
- Drafting job orders: Your duties and minimum qualifications drive the skill level. DOL instructs SWAs/COs to assign SOC/skill based on what workers do on the majority (>50%) of workdays. Over-inflated qualifications can push a case into Skill II, however periodic duties (e.g. driving a truck one day/week) will no longer skew occupational codes.
- Housing adjustment compliance: If you intend to apply the H-2A housing adjustment, ensure no-cost housing is provided and that U.S. workers receive the full (unadjusted) AEWR.
- Calendar shift: Expect annual AEWR updates in July, not December.
Action Checklist (Now)
- Map roles to SOCs and confirm whether they fall in the five combined field/livestock SOCs vs. other SOCs.
- Right-size qualifications in job orders to accurately reflect Skill I vs. Skill II needs.
- Model wages by state, skill level, and SOC; decide if you will use the housing adjustment for H-2A workers and ensure U.S. worker parity (no adjustment).
- Update templates (ETA-790A, addenda, offer letters, payroll codes) to capture skill levels and any adjustments.
- Consider commenting on gray areas (mixed-duty roles, driving/supervision, equipment maintenance) by Dec. 1, 2025.
For further assistance, please contact your BrownWinick attorney.
