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The Department of Labor (“DOL”) is set to once again raise the standard for minimum wage rates for H-2A workers in California. Federal regulations require that the minimum wage for H-2A employees is the highest of (1) the Adverse Effect Wage Rate (“AEWR”), (2) the prevailing hourly or piece rate, (3) the agreed upon collective bargaining wage rate, if applicable, or (4) the state or federal minimum wage.

Often, the highest rate is the AEWR, a rate specifically set by the DOL for each state as the minimum to be offered to H-2A workers. The goal of the AEWR is to keep wages of similarly employed U.S. workers from being adversely affected by employers’ ability to hire labor from outside the country. There is much debate, however, as to whether the AEWR actually accomplishes that goal.

The AEWR has been steadily increasing year by year, and will rise again to $13.18 in 2018:

Year

AEWR Rate

2016

$11.89/hour

2017

$12.57/hour

2018

$13.18/hour

The 2018 rate will become effective 14 days after publication in the Federal Register, on January 4, 2018. The Federal Register preview is available here.

Also, as a reminder, on January 1st, the California minimum wage also increases to $11.00/hour for employers with 26 or more employees and $10.50 for employers with 25 or fewer employees. The “march to $15” minimum wage increases will continue annually through 2022 as follows:

Date

Minimum Wage for Employers with 25 Employees or Less

Minimum Wage for Employers with 26 Employees or More

 1/1/18 

$10.50/hour

$11.00/hour

1/1/19

$11.00/hour

$12.00/hour

1/1/20

$12.00/hour

$13.00/hour

1/1/21

$13.00/hour

$14.00/hour

1/1/22

$14.00/hour

$15.00/hour

1/1/23

$15.00/hour

 

COUNSEL TO MANAGEMENT:

Wage rates are steadily increasing across the board for employers. This increase in H-2A labor costs will be a further drain on employers that are already dealing with a labor shortage and planned changes in overtime requirements on both the federal and state level. If you have any questions about what rate applies to your workers or H-2A labor or other wage and hour questions, contact the experts at The Saqui Law Group.

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