While the interim final rule, or IFR, on the H-2A guest worker program was announced in October 2025, last year’s government shutdown and subsequent litigation have left growers with little guidance through this application season. To provide clarity, the National Council of Agricultural Employers hosted a webinar to help growers navigate some of the rule’s complexities.
Ruben Lugo, owner and lead consultant of Impact Ag Labor, and Jeanne Malitz, principal of MalitzLaw Inc., led a discussion on the skill-based wage tiers and housing adjustments set out in the IFR.
Plotting Your Position in the New Skill Levels
Malitz says wage rates are different with the IFR than in past calculations of the Adverse Effect Wage Rate. New wage rates will come out in July because the Department of Labor will now use the Occupational Employment and Wage Statistics survey to determine H-2A wage adjustments.
Within the IFR are new skill levels and Standard Occupational Classification codes: Skill Level 1 will be an entry-level position, and Skill Level 2 will be more experienced.
“Skill Level 1 is working under close supervision, doing repetitive tasks, using common tools,” Malitz says. “Skill Level 2 is where more discretion is involved and may take on more of a leadership role and more advanced role. But in reality, what we’re seeing is that it’s really coming down to how much work-related experience in quantity that you’re requiring.”
For example, a basic farmworker job that requires two months or less of experience would be a Skill Level 1, and if the job requires three months or more of experience, it falls under Skill Level 2.
“It means you have to determine what the basic industry quantitative years of experience or months of experience are allowed under this example and under the Occupational Information Network (ONET),” she says.
ONET will show the maximum experience required for each of the occupational titles. Malitz says it’s critically important for H-2A applicants to understand how to argue why some jobs may still fall in that Skill Level 1 despite having more minimum experience required using this ONET information.
“If you’re requiring three months of experience, which used to be the maximum under a Job Zone 1, it’s now way under the maximum experience,” she says. “You should be able to argue that if you have a three-month, a four-month, even a five-month job experience requirement; you’re still Zone 1.”
Housing Adjustments and the AEWR Reality
What’s also new is that the IFR has built into the AEWR a downward wage adjustment for H-2A workers to account for the cost of housing, which is based on the U.S. Department of Housing and Urban Development’s analysis of a four-bedroom house.
“It is not a separate wage credit. It is not a payroll item. It is not something you take or don’t take. It is just built into the AEWR,” Malitz says. “It is not applicable to local wages, and it is not applicable to a collective bargaining rate. It is only part of the AEWR. So, you wouldn’t take it against the state or federal minimum wage either.”
Malitz says ONET will help H-2A applicants understand which of the “magic five” jobs a worker could fall under. But what if that job description falls out of those “magic five” codes? The IFR also calls for primary and secondary duties.
“The rule is a little bit confusing,” she says. “It talks about primary duties and then it goes into a whole different test at the end of the day on the majority of the workdays. What we put in our job order — if I see something that could trigger a different code, I will put in, ‘Perform these duties less than 50% of the workdays.’”
And this is a place where applicants should pay close attention, Malitz says, as the Department of Labor’s Wage and Hour Division is likely to scrutinize the tasks your workers do to ensure those tasks match the job classifications.
A major source of hiccup is with shuttle drivers who drive workers to and from worksites. She says it’s important to include language in the job order of how much time a worker would spend driving.
Malitz says H-2A employers still must pay the highest of the AEWR, prevailing hourly rate or state piece rate, the CBA rate or state or federal minimum wage.
“What you put in your job order is going to impact how Wage and Hour handles this wage,” she says.
Surviving the Inevitable Wage and Hour Investigation
Lugo points out that for growers participating in the H-2A program, there will inevitably be a DOL Wage and Hour Division audit.
“If you’re an H-2A employer, you can 100% expect to be investigated,” he says. “Maybe not your first year, maybe not your second year, maybe not your third year, but eventually you will be investigated by DOL Wage and Hour.”
Lugo says that it’s a mistake for growers to assume that just because an H-2A visa application was approved, the hard work is over. He says while there’s an agent or an attorney to assist during the certification and visa processing, it’s when workers arrive to fulfill the contract that is really the highest risk for Wage and Hour Division violations.
He says that while worker complaints often spur such investigations, there could also just be enforcement plans that target specific geo-locations or crops.
Lugo says when the Wage and Hour Division investigates, expect longer interviews with workers. He says agents will ask workers about their day from the time they get up until they go back to their housing at the end of the day. This is to screen for any pay discrepancies in start times.
“You have to be at the top of your game right now because these interviews might go into deeper interviews where other related violations might be encountered,” he says.
Preparing Supervisors for Audits
Lugo says that despite the new IFR, it does not change how the Wage and Hour Division will conduct its investigations.
“You really have to take a look at your operations from housing, transportation, safety, U.S. worker protections, recruitment, inbound, outbound, proper payment of wages, deductions, primitive fees, 3/4 guarantees and all the other requirements,” he says. “What violations might Wage and Hour find because of IFR? Well, they’re going to probably look at certain areas and they’re going to look at your job order within your job order and they’re going to look at what’s actually happening out there in the field, what’s actually occurring in your operation.”
He says a common violation is failure to state actual terms and conditions of the job order. Another is if specific housing is listed in the job order, but workers stay in different housing. One might be inaccurate job duties as much of a job might be in a different SOC code and require a higher pay wage rate. Paying H-2A workers higher than domestic workers is another violation, as preferential treatment is forbidden.
Lugo encourages H-2A applicants to ensure employee housing is in top shape, especially with the additional downward wage adjustment for H-2A worker housing.
How can a grower prepare for Wage and Hour Division investigations? Lugo says it’s critical to train frontline supervisors, as that’s where most violations can occur.
“They’re making decisions. They might make incorrect decisions. They might be ignoring certain situations that cause non-compliance,” he says. “And you’re going to be the one that’s going to have to pay the penalty for those decisions.”
Another is monitoring compliance of housing and transportation as Wage and Hour could show up unexpectedly at any time, any day. Conduct mock audits, too, to ensure compliance.
“Keep good records,” Lugo says. “Records will always be your best friend in defending your compliance.”
