Impact of COVID-19 on Agriculture

H-2A AEWR Increases for 2021

News / Newsline February 18, 2021

Credit: Mark Stebnicki, North Carolina Farm Bureau 

Farmers must pay H-2A workers more in 2021, as defined by a report from the Department of Agriculture. Micheal Clements shares what this means for agricultural employers.

Clements: The Farm Labor Survey released this month by the Department of Agriculture set the minimum wage farmers must pay H-2A workers. Known as the Adverse Effect Wage Rate, American Farm Bureau Federation Economist Veronica Nigh says the 2021 rate increased 4.5 percent.

Nigh: 2021 is another year of an increase in farm labor rates. What’s most important are regional rates, and there we saw California is certainly the leader. Unfortunately for that state, an increase in wages of 8.7 percent, where the Delta and Southeast regions both showing increases of less than one percent in wages.

Clements: The Adverse Effect Wage Rate is usually published in November, but a potential policy changed delayed the announcement.

Nigh: There was some potential policy changes the outgoing administration put into place that the courts then struck down that basically delayed the collection of the wage data via the USDA survey. That meant USDA had to reissue the survey, collect that information, and so we’re only just now getting that survey data out.

Clements: The new rate goes into effect immediately. Whether farmers will need to issue back pay for wages earned before the announcement is to be determined. Nigh says the 2021 increase follows several years of increases.

Nigh: Over the last five years we’ve seen a national average increase in the AEWR of 20 percent. So certainly, looking at increases in the AEWR year after year that are outpacing the regular Employment Cost Index which is a measurement of the total changes across all occupations in the U.S.

Clements: Learn more on the Market Intel page at Micheal Clements, Washington.

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