A U.S. District Court judge has denied a request for a temporary restraining order to immediately stop huge increases in the minimum wage for H-2A-visa foreign guestworkers but will consider a preliminary injunction.
District Judge Timothy J. Kelly, a Trump appointee, denied the motion from the National Council of Agricultural Employers and a Nevada farm.
He also denied a Justice Department motion to stay the lawsuit, Michael Marsh, NCAE president and CEO, told Capital Press. DOJ asked for the stay in light of a lapse in department funding due to the partial government shutdown, he said.
U.S. Department of Labor increases in the Adverse Effect Wage Rate for 2019 are now in effect but job orders and advertising should state the rates could be “rescinded by court order or other action,” Marsh said.
“The impending losses from the DOL notice taking effect are substantial and may support the entry of a preliminary injunction, but the court concluded that they were not ‘imminent’ enough for the court to issue a temporary restraining order,” Marsh said.
The court ordered a preliminary briefing schedule, due Jan. 10, for NCAE’s motion for a preliminary injunction, he said.
NCAE and Peri & Sons Farm Inc., Yerington, Nev., filed a lawsuit against DOL in U.S. District Court in Washington, D.C., Jan. 7, seeking to stop AEWR increases for 2019 from taking effect Jan. 9.
The suit seeks “emergency relief from DOL’s plan to impose arbitrary and unsubstantiated cost increases on American farms and ranches.”
Peri & Sons Farm employed 1,768 H-2A workers at the peak of its 2018 season in raising labor-intensive, fresh-market onions, organic leafy greens, vegetables and rotational crops of alfalfa and triticale on 15,000 acres, the lawsuit states. The farm was started by three Italian immigrant brothers in 1918, according to the company website.
“The work is highly seasonal and requires far more labor than is available in the community, forcing Peri & Sons to rely on the H-2A … program to meet its farm labor needs. Without the program, Peri & Sons could not continue to operate as a business,” the lawsuit states.
The AEWR for Nevada, Utah and Colorado goes up 22.8 percent, from $10.69 to $13.13 per hour. That equates to an approximate $3.7 million increase for Peri & Sons, which “jeopardizes the farm’s viability,” the suit states.
The suit gives further examples of business-threatening increases of $1.3 million to Olson’s Greenhouse Gardens of Salem, Utah, and $400,000 to Tagawa Greenhouse Enterprises of Brighton, Colo. The suit has dozens of other examples, Marsh said.
The 2019 AEWR increases, averaging 6.3 percent nationwide will cost farms hundreds of millions of dollars when hourly earnings for all U.S. employment are up just 2.8 percent and crop prices are level or decreasing, Marsh has said.
The Washington and Oregon AEWR is set to increase from $14.12 to $15.03 per hour, the highest in the nation. Washington state had 24,862 H-2A workers in 2018, mostly in the tree fruit industry.
When Congress created the H-2A program in 1986, it directed DOL to ensure that employment of foreign guestworkers would not “adversely effect” wages and working conditions of similarly employed U.S. workers. Congress wanted to avoid a wage depression for U.S. workers caused by foreign workers costing less than domestic workers.
To that end, DOL created the AEWR based on USDA surveys of prevailing wages by region.
The lawsuit alleges that the surveys result in average minimums that, “contrary to statutory requirements,” do not “evaluate whether any adverse effect exists whatsoever.”
DOL has made no effort to test for the existence of any adverse effect, the lawsuit states, and instead “assumes adverse effect and requires an AEWR. The department’s erroneously named ‘Adverse Effect Wage Rate’ is simply a premium wage for foreign workers, derived from a weighed average across all agricultural work by state or region based on survey data obtained by USDA.”
The number of H-2A workers in the U.S., averaging just over five-month stays, grew from 48,336 in 2005 to 242,762 in 2018 — a 400 percent increase, the lawsuit states.
USDA calculates H-2A employment as 108,000 full-time equivalents or about 8 percent of the 1.3 million FTEs in agriculture. FTEs might be that but the total number of agricultural workers, seasonal and full-time, is closer to 2.4 million to 2.7 million because there are so many seasonal workers, Marsh said.
The relatively small number of H-2A workers, even with significant increases in recent years, would not lower domestic wages and if anything has driven them upward, the lawsuit states.
H-2A employers are required to pay all their employees, H-2A and domestic, the AEWR as a minimum and farmers not using H-2A often raise their wages to stay competitive, Marsh said.
The AEWR is “self-inflating and adverse to the grower,” he said.