California Gov. Gavin Newsom has signed AB 2646 into law, which imposes an industry-specific wage hike aimed at temporary and seasonal agriculture workers as well as domestic farmworkers performing the same tasks.
The increase to $19.75 per hour for covered agricultural employees will take effect Jan. 1, 2027, with future wage increases tied to annual cost-of-living adjustments. This is a significant increase from the state’s current minimum wage of $16.90.
Fisher Phillips, a national law firm that focuses on labor and employment law for employers, published a breakdown of the bill’s implications. The firm says there are two designations for employees: an approved agricultural employee and a corresponding employee.
Fisher Phillips says an approved agricultural employee is “engaged in agriculture, is a resident outside of California, and has a permit to work in the state on a temporary or seasonal basis (a position lasting no longer than one year, except in extraordinary circumstances) as a result of an application or job order to hire ag workers on such basis that has been approved, in part or in whole, by the Labor and Workforce Development Agency or the Employment Development Department.”
The firm notes that a corresponding employee is “engaged in agriculture, is a resident of California, and performs the same (or substantially similar) work during the same period, as an approved agricultural employee employed by the same employer in the same county.”
Fisher Phillips explains that the state’s definition of a corresponding employee differs from the federal H-2A definition.
“Under the California definition, any agricultural employee working in the same county as an H-2A employee employed by the same employer is entitled to the higher wage, even if they are not doing the type of work listed in the employer’s H-2A Job Order,” according to the firm.
Fisher Phillips also notes: “It appears that employees who are exempt under the existing rules (such as individuals who are the parent, spouse, or child of the employer) would continue to be exempt under any new agriculture-specific minimum rate.”
Farm Groups Warn of Economic Fallout
John Hollay, president and CEO of the National Council of Agricultural Employers, says there is concern from agricultural employers as the law is an attack on federal preemption.
“The language of the bill may not mention H-2A by name, but it certainly is written in a way to get in the middle of federal policy,” he says.
Western Growers President and CEO Dave Puglia expressed concern about the overall impact this law would have on the state’s growers.
“None of our state’s farmers can simply absorb this new higher wage mandate,” he says in a statement. “Some larger family farm businesses may be able to pass along this new labor cost to their grocery chain customers, who will pass it on to consumers already struggling with affordability challenges.”
Puglia says that most, however, won’t be able to pass on these added costs. He points to California being the state with the highest cost of living already.
“They have been beaten down by California’s higher operating costs and watched their grocery chain customers choose farmers in other states and countries where the same fresh foods can be grown at a lower cost,” he says.
Jacob Villagomez, director of governmental affairs for California Citrus Mutual (CCM), echoed those concerns over compounding operating expenses.
“We are disappointed by the Governor’s decision to sign AB 2646,” Villagomez said in a statement. “California citrus growers depend on a skilled agricultural workforce, but this law imposes another significant labor cost at a time when growers are already confronting rising costs across nearly every part of their operations.”
Casey Creamer, president of the California Fresh Fruit Association, echoes Puglia’s remarks, saying in a statement, “If we continue making it more difficult to produce food here, we risk shifting more of our food supply to foreign production. That does not help California farmworkers, our rural communities or our long-term food security.”
Villagomez agrees, noting, “California growers compete in a global marketplace. Every additional cost makes it harder to keep producing fresh citrus here in California, supporting farm jobs and sustaining the rural communities that depend on agriculture.”
Hollay says he’s eager to see what steps the California Labor Commissioner’s Office will lay out for implementation.
“From an employer standpoint, I think we’re looking at options to see whether or not Governor Newsom’s signature is the final say on this bill,” Hollay says.
Puglia says this law is one of several regulations that have severely impacted the profitability of Golden State growers, calling this “another new economically stupid mandate imposed on the state’s farmers in the form of AB 2646.”
Hollay, agrees, noting growers want to pay farmworkers fairly, but labor is one of many input costs out of growers’ control, “so to add on this additional layer of unintended expense is a gut punch.”
“Next time you hear people in Sacramento talk about their love of California’s farms and the wonderful food we grow here, remember that we have lost nearly 30 percent of our family farms in the last 25 years,” Puglia says. “That is because of the economic injuries that have been caused by foolish public policies. Californians are proud of our state’s farmers. They deserve better from Sacramento.”
Creamer agrees, noting, “California agriculture is already facing significant economic pressure, and adding costs without considering the entire farm economy will have consequences beyond the farm. Supporting farmworkers and maintaining economically sustainable farms are not competing goals. We need both.”
