In early October, California Gov. Gavin Newsom signed AB 2646 into law, which imposes an industry-specific wage hike aimed at temporary and seasonal agricultural 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.
AB 2646 sets two classifications of agricultural workers to establish wage and hour compliance standards. The first is approved agricultural employees, which is defined as an individual residing outside of California who performs agricultural labor under a valid temporary or seasonal work permit. The second is a corresponding employee, which refers to any California resident engaged in agriculture who performs the same or substantially similar duties during the same time period for the same employer within the same county.
Broad Statutory Definitions Create Confusion Over Worker Coverage
Industry insiders say most growers and farm labor contractors need more clarity on the application of this law. This includes which farmworkers apply, and which ones don’t, under this law.
“It’s really unclear how much employers are going to have to pay because the law was clearly written to cover H-2A workers, and then it has a definition for workers in corresponding employment,” says Jason Resnick, senior vice president and general counsel for Western Growers. “The definition that’s in the bill is not the same definition that is in the H-2A regulations, so this makes it unclear how broad and or reaching the definition of corresponding employees is.”
Kimberly Clark, executive director of the California Farm Labor Contractor Association, agrees, noting that clarification around H-2A and corresponding domestic workers is needed.
“Most news and media are reporting AB 2646 as an industrywide minimum wage,” she says. “The public is widely misinformed, but more importantly, farmworkers are being misled about what AB 2646 really means for them.”
Resnick says an example of having to make the distinction between workers who do or don’t fall under this law would be a grower that uses domestic workers, then uses a farm labor contractor to secure additional H-2A workers, but also has hired irrigators and packers.
“Are they covered?” he says. “Well, we don’t know. So, at the end of the day, employers should be able to determine what they owe before payday, not after a lawsuit, which is what this is setting up.”
Resnick says the law uses phrases such as “substantially similar work during the same time period” without a clear explanation of that interpretation.
“Does that mean the same day or the same pay period or the entire growing season? These are basic payroll questions, and there’s no clear guidance to give. What we can say is the law is so vague that there are competing interpretations about what the correct way to figure who is covered and who’s not, and it’s ultimately going to be a question of risk tolerance.”
Resnick says a grower could arguably extend the wage rate called for in AB 2646 to all H-2A workers on a contract and anyone else performing similar work in the same county, or growers could look at different farming tasks, whether it be harvesting or irrigating or weeding, and only pay the AB 2646 rate to the tasks defined under the H-2A contract.
Annual COLA Calculations Add Payroll Uncertainty Ahead of 2027 Enforcement
Jacob Villagomez, director of governmental affairs for California Citrus Mutual, says his members are also concerned about the frequency of wage adjustment. The law calls for a yearly cost-of-living adjustment on Jan. 1, calculated by the Social Security Administration based on changes in the Consumer Price Index.
“There’s questions, too, like does that mean … if we have [a COLA increase] by the end of the year — what is that wage going to be going into January?” he says.
Clark says it’s easy to assume by reading the law that COLA would only begin to be applied in 2028, but “there may be an argument that the rate starting Jan. 1, 2027, should be $19.75 plus COLA.”
Steven Fenaroli, director of political advocacy for California Farm Bureau, says when the state’s Adverse Effect Wage Rate, or AEWR, for H-2A workers climbed to $19.97 an hour in 2025, program use dropped. The high wage rate and other costs of the program such as housing and transportation essentially priced growers out of the program.
“We expect the AB 2646 wage mandate will have the same effect, limiting options for growers who would have planted more and employed more U.S. workers alongside their H-2A employees who will not now do so because of the high cost of the program,” Fenaroli says.
How Farm Labor Contractor Agreements Complicate State Compliance Standards
Another wrinkle is that roughly half of California’s specialty crop growers use farm labor contractors, or FLCs. While they rely mostly on domestic crews, FLCs also account for more than 60% of the state’s total H-2A visas.
Clark says under federal rules the FLC is the official employer and if an FLC hires domestic workers for the same job, those local workers receive the higher H-2A wage, but if the farm owner hired the domestic workers, the owner does not have to match the higher rate. Under California state law, the farm owner is the responsible party for all farmworkers.
“This creates the potential argument that the FLC’s H-2A employees are considered employees of the grower client, and thus the growers’ directly hired domestic employees may fall under the state of California’s composite definition of a corresponding employee,” she says.
Clark says it’s going to be a challenge for growers and FLCs to plan for 2027, especially as the U.S. Department of Labor has until Dec. 30 to establish a new methodology for AEWR.
“Some grower-FLC contracts may outline specifically how legally mandated wage adjustments are handled, but others will be sifting through the laws and trying to foresee the impacts to negotiate together,” she says.
Clark notes it might be easy to assume that any wage adjustment responsibilities would simply fall to FLCs, but she points out “growers are legally responsible for ensuring their agreements are sufficient to appropriately compensate the employees working for their benefit, otherwise they may be held jointly liable.”
Law Designed to Claw Back Savings From Federal Wage Rule Changes
Resnick says that the Department of Labor’s 2025 interim final rule that changed the AEWR methodology brought some much-needed relief to family farms in the state, but the intention of this bill is to claw back some of those savings.
“There’s no question that the sponsors of the bill have said that they’re trying to raise H-2A workers and domestic workers’ wages back to what they were before the Trump administration introduced the interim final rule that had the effect of reducing the wages for many H-2A workers and domestic workers performing in corresponding employment in California,” he says.
But he says the means for which the bill sponsors introduced this law “is really ham-handed and raises real issues about the constitutionality of this law.”
Villagomez says there’s also been some misinformation that with the Department of Labor’s 2025 interim final rule, farmworker wages went down with a two-tiered wage system, which means specialty crops have been “caught in this narrative of wages going down when that wasn’t necessarily the case for all farm workers.”
A Gut Punch to Farmers Facing Escalating Regulatory and Labor Pressures
The Jan. 1, 2027, enforcement date also hits at a time when some growers will be mid-contract and at the peak of the state’s winter citrus season, which complicates any current contract negotiations.
“That’s going to be a really big challenge,” Villagomez says, adding that along with rising costs of farming, AB 2646 once again makes California agriculture less competitive in a global market.
“It doesn’t just hurt the California growers that we are diminishing because of competitiveness [and] because of increased costs straight across the board in agriculture,” he says.
Villagomez says that growers haven’t necessarily come out to say how much this wage increase will impact their operations, but it’s more the compounding effect of regulations including AB 2646, the Sustainable Groundwater Management Act and more.
“It’s just the cumulativeness of everything, including this new wage — labor, water, energy, the regulatory and input costs — they’re all going up,” he says. “That’s really the biggest issue we’re finding with this. It’s coming at a really bad time.”
Clark agrees, noting, “With input costs rising, increasing competition from imports (that aren’t held to the same health, safety or wage standards) farmers are feeling the pressure from all sides as they strive to provide healthy food for our families.”
Resnick says there’s real concern from Western Growers members about the ability for growers in the Golden State to remain competitive in a global fresh produce market.
“California growers compete with producers who do not face California’s costs,” he says. “So, another wage mandate adds to that pressure, and leaving its reach unclear just adds legal exposure on top of the expense.”
Clark says her members are focusing right now on the much-needed real world guidance and understanding the applicability of this new law and what implementation will look like.
“There are still crucial questions to be clarified, with various layers of legal language to interpret,” she says. “Unfortunately, the author and sponsors of AB 2646 and the California legislature did not appropriately take into account how the interactions of federal and state law would make it exceedingly difficult for farmers and farm labor contractors to understand, let alone comply.”
Resnick says he does anticipate there will be a challenge to this law, but as Villagomez says, it’s just one of a laundry list of challenges California growers face.
“The mandate at the end of the day is a real gut punch to farmers who have just been completely overwhelmed with the costs of increasing regulations, fuel, diesel costs ... and some of the highest wages in the country,” Resnick says.
