From an increasing minimum wage, changes to AEWR and H-2A laws, and stricter overtime regulations, the cost of labor has never been more expensive for farmers. Now, it’s more important than ever for farmers to manage their labor costs efficiently and cost-effectively.
A new year means new labor and employment laws impacting how farmers manage their farm labor. Much like last year, in 2024, farmers will continue dealing with farm labor law issues that have significant implications for their operations and budgets. This year, navigating the complex landscape of labor and employment laws is not just a matter of compliance but a critical aspect of ensuring the profitability and sustainability of their agricultural businesses.
Higher Hourly Wages
An increasing minimum wage will continue to affect farmers in 2024. While the federal minimum wage remains stagnating at $7.25 per hour, several states have taken proactive measures to implement higher minimum wage rates, with some exceeding $15 per hour.
The USDA labor survey reports that for 2024, the minimum wage increase will exceed 50 cents per hour in 44 states, with 13 of those states seeing increases of over $1 per hour.
According to a recent USDA Farm Labor survey, farmers paid hired workers an average gross wage of $18.81 in 2023, up 6% from the same reporting period the previous year.
The disparity in minimum wage not only places financial strain on farming operating budgets, particularly those who rely on seasonal workers, but it also creates logistical challenges for farmers who must ensure their wages comply with their state’s requirements.
Such disparities pose logistical challenges and place financial strain on farmers, particularly those who rely on seasonal workers. For farmers in many categories, labor costs account for a significant portion of their operating budgets. Vegetable and melon farmers report labor costs accounting for roughly 28.5% of their total production expenses, while fruit and tree nut farmers see labor costs accounting for up to 38.5%. This surge in labor costs has massive impacts on the operational budgets for most farms and threatens the bottom line for farmers across the country.
Continued Reliance on a Complex H-2A Visa Program
Designed to address labor shortages in seasonal agricultural sectors, the H-2A program remains indispensable for many farmers. However, the program’s high costs, stringent regulations, and complicated application process continue to perplex farmers who must navigate these challenges to round out their workforce with foreign laborers.
More and more farmers rely on the H-2A visa program to ensure successful harvest seasons. It is reported that the Department of Labor (DOL) certified 378,513 H-2A positions in 2023. While the growth rate slowed to just 2% over 2022 for a total number of positions certified, there was a 10.5% increase in applications filed, suggesting more farming operations are implementing H-2A programs in the face of a tight labor market.
In 2024, farmers can expect a higher Adverse Effect Wage Rate (AEWR). The new rate, effective January 1, 2024, is determined by the Department of Labor (DOL) using the combined wage rate for field and livestock workers in 2023.
The USDA’s Farm Labor Survey reports that for 2024, AEWR increases will exceed 50 cents per hour in 44 states, with 13 of those states seeing increases of over $1 per hour.
The AEWR differs across the 15 farm labor regions and individual rates for California, Florida, and Hawaii. For the first time, farmers in each region will have an AEWR of more than $14 per hour, with three states exceeding $19 per hour.
The 2024 AEWRs for each state can be found here: H-2A Adverse Effect Wage Rates (AEWRs) | Department of Labor
In addition to the high pay rate, farmers utilizing H-2A are also responsible for additional costs for each temporary worker, including housing, transportation, and meals.
The required provision of employer-provided housing presents novel challenges for farm operators. Instances of harassment and misconduct in employer-provided housing require farmers to have well-documented policies and proactive measures to safeguard the well-being of workers living on premises while mitigating legal liabilities.
Farmers who are using the H-2A program or considering it should consult with a trusted employment law attorney to ensure their policies and employee handbooks are up to date to protect themselves.
Increased Overtime Protections for Farmworkers
While there is no federal mandate that employees in agriculture receive the federal overtime payment of time and one-half their regular wage after 40 hours of work, many states have overruled this and enacted legislation requiring overtime payments at varying thresholds for agricultural workers.
Some states will see overtime regulations go into effect for the first time in 2024, while some states that already have adopted overtime policies over the years may see those thresholds lowered.
California, for example, will now pay overtime after 8.5 hours worked per day or 45 hours per week, down from 9 hours per day or 50 hours per week last year. In 2025, that threshold is scheduled to lower again, with overtime going into effect at 8 hours per day or 40 hours per week.
Starting in 2024, Washington is now paying overtime at 40 hours per week for the first time after paying overtime at 48 hours per week last year.
Overtime regulations by state can be viewed on this map here: Map of Overtime for Farmworkers by State
Best Practices for Farmers to Protect Themselves
With the cost of labor going up due to new and changing employment law measures and the other increasing costs of operating the farm, it’s more important than ever for farmers to know where their employees are and how long they have been on the clock.
Digitizing your farm labor tracking and management with the FieldClock app that meets your farm's specific needs can help you see where your employees are in real time and make data-driven decisions anytime, anywhere.
Additionally, farmers can protect themselves and their businesses from the threat of labor law litigation by staying informed. Consult with an employment law attorney or human resources professional to ensure you and your agricultural business are in compliance with the latest labor laws.
And don’t forget to check out our blog and subscribe to our email list for farm labor updates.
