Posted: Thursday, January 17, 2013 12:00 PM
Carol Ryan Dumas/Capital Press
Ewes are pastured near the lambing sheds on Henry Etcheverry's operation north of Rupert, Idaho, on Monday. Etcheverry said the Department of Labor's decision to increase foreign sheepherders' wages in four Western states based on California's wages is grossly unfair and will likely put producers out of business.
Near doubling of wage in some states may threaten to end operations
The sheep industry says it had no advance warning the Department of Labor planned to drastically increase mandatory minimum wages paid to sheepherders under the H-2A program in Oregon, Washington, Arizona and Nevada.
The department's notice of the increased wages was placed on the Federal Register Jan. 8 and became effective immediately, blindsiding the industry, said Dennis Richins, executive director of Western Range Association, which works to secure foreign herders for member producers in 11 Western states.
The previous minimum wage of $750 (plus room and board) a month in Nevada and Oregon, $800 in Arizona and about $1,200 in Washington jumped to $1,422.52, equal to California's wage rate, he said.
The wage increases -- 89 percent in Oregon and Nevada and 77.8 percent in Arizona -- come alongside a 60 percent decrease in lamb prices, he said.
"It's not going to work. It's going to put people out of business if we can't get it changed," he said.
He doesn't know if it can be changed, but Western Range Association has attorneys working on the issue, he said.
Producers participating in the H-2A program must abide by the set wages or the Department of Labor could pull their petition for foreign labor and they'd have no herders, he said.
The Department of Labor sends out wage surveys annually to determine wage rates for H-2A workers based on wages paid to domestic workers. But there aren't many domestic sheepherders, and to his understanding, the department didn't have enough information to determine a wage for foreign sheepherders in many sheep-producing states, he said.
Foreign workers have to be paid at certain rates so there's no displacement of Americans' wages, said Deanne Amaden, Department of Labor regional director of public affairs in San Francisco.
Where there is no wage rate finding, the Office of Foreign Labor Certification assigns wage rates based on a bordering state's wage rate finding. When there is no bordering state with a wage rate finding, the office applies the wage rate finding of a state within a USDA farm production area, according to the department's notice.
The prevailing wage rates for sheepherding (and goat herding) were based on data collected in California and Colorado. Wages for Nevada, Arizona, Oregon and Washington were based on California's data, resulting in the $1,422.52 wage. Wages for Idaho, Montana, New Mexico, North Dakota, Oklahoma, Texas, Utah, and Wyoming were based on Colorado data, resulting in a monthly wage of $750.
California has had a wage rate finding for three or four years, which the office applied to Nevada as a neighboring state. But climate and production are different in the two states, Richins said.
California producers raise their sheep on pastures with electric fences, and they don't have to deal with predators or haul water. They're not herded from range to range with lambs born out in the open, like they are in Nevada. In addition, California producers get better production and don't have to transport lambs as far to market, he said.
"It's a different climate and a lot different country in Nevada than California. There are a lot of variables between the two states. It's not even close," Richins said.
Western Range Association's Nevada and Arizona members say they'll be out of business if something can't be done to change the ruling, he said.
The increase in the wages of 124 herders on hand now in Nevada and Arizona will be about $1 million annually, but more herders will be arriving and employed for lambing season in the spring, he said.
"We are particularly disturbed that a decision having such an economic impact to sheep producers in these states was not discussed with the industry before it was made effective," said Peter Orwick, executive director of the American Sheep Industry Association.
Department of Labor staff in Washington, D.C., responding to Capital Press' emailed questions, said its procedures involve a long-standing process for establishing the annual prevailing wage and/or piece rates for sheepherding (among other livestock occupations).
The department, they said, doesn't seek public comment before making the rate final. In establishing the wage, the department uses findings from prevailing wage surveys conducted by state workforce agencies, and new wage rates are published in the Federal Register as a public notice.
There is no appeal related to that notice, they said.
But if an employer files an H-2A application containing a wage offer lower than the prevailing wage, he will receive a notice requesting the wage offer be brought into compliance and has the right to file an expedited appeal with the department at that time.
Richard Kosesan, Oregon Sheep Growers Association executive director, said he has not had time to review the notice. Calls to Nevada, Arizona and Washington producer associations have not yet been returned.