Federal Court Orders DOL to Replace H-2A Wage Methodology

• A federal court has ruled that the Department of Labor’s H-2A wage rule unlawfully reduced wages for agricultural workers and ordered the agency to develop a new wage-setting methodology.  

Court Orders DOL to Replace H-2A Wage Methodology 

A federal district court in California has ruled that the U.S. Department of Labor’s (DOL) H-2A wage rule is unlawful and directed the agency to develop new wage standards for temporary agricultural workers. While the current rule may remain in effect temporarily, DOL must create a replacement methodology that complies with federal law.  

Background 

The case challenged a 2025 DOL interim final rule that changed how the Adverse Effect Wage Rate (AEWR), the minimum wage employers must generally pay H-2A workers, is calculated. Farmworker advocates argued that the rule lowered wages for both H-2A workers and similarly employed U.S. workers, contrary to the requirements of the H-2A program.  

According to the plaintiffs, the rule reduced wages by as much as $7 per hour in certain states and shifted billions of dollars in wages from workers to employers. 

Court’s Decision 

On Aug. 26, 2026, U.S. District Judge Kirk E. Sherriff concluded that DOL failed to adequately demonstrate that the revised wage methodology would satisfy its statutory obligation to ensure that the employment of H-2A workers does not adversely affect the wages and working conditions of U.S. workers. The court found key portions of the rule to be arbitrary and capricious under the Administrative Procedure Act.  

Rather than immediately vacating the rule, the court allowed it to remain temporarily in effect to avoid disruption to the agricultural labor market while DOL develops a replacement methodology.  

What’s Next? 

Under the court’s order, DOL must promptly establish a new wage-setting methodology consistent with the ruling. The agency must also notify employers that they could face back-pay obligations if newly established wage rates exceed the wages currently being paid under the existing rule.  

It remains unclear whether the government will appeal the decision. 

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