Arguments for and against returning the minimum wage for agricultural foreign guestworkers to 2018 levels were heard in a federal court Monday in Washington, D.C.
Judge Timothy J. Kelly did not say how or when he will rule but has noted the urgency of the case, said Michael Marsh, president and CEO of the National Council for Agricultural Employers in Washington, D.C.
Marsh said a ruling could come in days or weeks.
NCAE and Peri & Sons Farms of Yerington, Nev., filed a lawsuit Jan. 7 against the U.S. Department of Labor seeking a preliminary injunction to stop the 2019 increases that average 6.3 percent nationwide and are 22.8 percent in Nevada, Utah and Colorado. The plaintiffs say the increases are arbitrary, unsubstantiated and will cause irreparable harm to many farms.
Peri & Sons, a fresh-market vegetable farm that employed 1,768 H-2A-visa foreign guestworkers in 2018, estimates the 2019 increase will cost it about $3.7 million, threatening its viability. Olson’s Greenhouse Gardens in Salem, Utah, estimates its hit at $1.3 million, and Tagawa Greenhouse Enterprises in Brighton, Colo., expects to pay $400,000 more, according to the lawsuit.
The H-2A minimum wage, known as the Adverse Effect Wage Rate or AEWR, has gone from $10.69 per hour to $13.13 per hour in Nevada, Utah and Colorado. Many other labor-intensive farming operations across the U.S. that rely on H-2A workers are similarly threatened, Marsh said.
The rate jumped from $14.12 to $15.03 in Washington and Oregon, the highest in the nation and affects a lot of growers, mostly in tree fruit, who hired 24,862 H-2A workers in 2018.
The AEWR is intended to ensure hiring foreign workers does not depress wages of domestic workers. DOL has never shown any adverse effect but assumes there is one in setting an arbitrary premium minimum wage for foreign workers based on USDA wage surveys, NCAE has said.
Growers say the exorbitant increases are beginning to take a toll.
Rob Valicoff, president of Valicoff Fruit Co., Wapato, Wash., said the AEWR increase probably will cost him an additional $100,000 this year.
“There’ll come a point we can’t sustain these increases,” he said. “I’m not sure where that point is. If people were willing to pay $4 per pound for apples, we might be able to afford it.”
Valicoff has 96 H-2A workers and 30 domestic workers pruning fruit trees right now. He’s paying them all piece rate, so much per tree depending on size and variety, but the floor is $15.03 per hour.
Marsh said rising labor costs contributed to Uesugi Farms, a vegetable operation in Gilroy, Calif., going out of business last fall.
NCAE has to show a likelihood it can prevail on the merits of the case — that DOL has never proven an adverse effect — and that farmers will suffer irreparable harm to get a preliminary injunction, Marsh said.
“We’re clearly showing irreparable harm but the merits are the tough one because we have to prove the government was arbitrary and capricious in issuing a rule,” he said.
Attorneys for the Department of Justice, representing DOL, and United Farm Workers and Texas Rio Grande Legal Aid, as intervenors, argued a 6-year statute of limitations on challenging the pertinent rule has expired, Marsh said.
That is countered, NCAE argued, by the rule being arbitrary and capricious.