A federal judge in California on Wednesday, August 26, invalidated a Trump administration rule that changed minimum wage calculations for foreign agricultural workers under the H-2A program, finding that the Department of Labor improperly rushed key changes without the required public notice-and-comment process. The ruling matters for U.S. agriculture because H-2A has become a critical source of seasonal labor, while growers continue to argue that rising wage requirements are making production increasingly expensive.

U.S. District Judge Kirk Sherriff granted summary judgment against the Labor Department's new Adverse Effect Wage Rate, or AEWR, rule, according to reporting by DTN Farm Business Editor Chris Clayton. The regulation could have reduced wages paid to foreign guest workers by an estimated $2.46 billion annually. Sherriff concluded that the department had not adequately justified bypassing normal rulemaking procedures for most of the changes. The Labor Department had not issued an immediate public response following the decision.

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The administration had argued that urgent action was necessary because tighter immigration enforcement was contributing to labor shortages and instability across U.S. agriculture. According to figures cited by the Labor Department and reported by DTN, undocumented workers represented an estimated 42% of the agricultural workforce when the rule was issued, compared with 16% for H-2A workers. The department maintained that the departure of lower-paid undocumented workers could increase farm labor costs and ultimately threaten agricultural production and the food supply.

H-2A Growth Collides With the Farm Labor Cost Debate

Sherriff rejected the argument that lowering wages was necessary to allow more farmers to use the H-2A program, describing the reasoning as economically unsupported. The judge pointed to the program's rapid expansion: H-2A hiring has quadrupled over the past decade. Through the first three quarters of fiscal 2026, the Labor Department had certified nearly 350,000 positions at more than 30,600 farms. Georgia, Florida, Washington, California and North Carolina together accounted for almost half of those H-2A jobs.

The decision also challenged a provision affecting workers who perform multiple types of jobs. Under the so-called "greater than 50%" rule, employees could be paid according to lower-skilled duties rather than higher-paying work depending on how their time was divided. Sherriff found that the system could encourage employers to structure assignments so higher-paying duties never represented a majority of a worker's job, potentially reducing overall wages. The ruling therefore reaches beyond the headline AEWR calculation and into how individual agricultural jobs are classified.

Another dispute involves the data used to establish wage rates. The new system relies on the Labor Department's Occupational Employment and Wage Statistics survey rather than USDA's Farm Labor Survey. Agricultural employers had criticized the USDA survey as an inaccurate basis for H-2A wages, while the Labor Department itself previously acknowledged limitations in using OEWS data to measure farmworker pay. The court sent the rule back to the Labor Department, opening the possibility of another regulatory rewrite and a likely appeal by the administration.

For farmers and agricultural employers, the ruling immediately renews concerns about labor expenses. John Hollay, president and CEO of the National Council of Agricultural Employers, told DTN that the decision revives what the organization considers an "existential threat" to agricultural employers facing elevated wage mandates. NCAE is also calling on Congress to pass the Securing Agriculture's Workforce Act, arguing that a more permanent legislative solution is needed for a labor system that has become increasingly important to U.S. specialty crops and other labor-intensive agricultural sectors.

The United Farm Workers, which brought the case, welcomed the decision from the opposite side of the dispute. UFW President Teresa Romero said some of the overturned wage reductions reached as much as $7 per hour in certain states and called for new legal wage rates to be issued quickly. She also argued that employers should be required to compensate workers for differences between the invalidated rates and whatever legal rates ultimately replace them. Sherriff similarly indicated that workers could potentially be entitled to back pay after the Labor Department rewrites the regulation.

For U.S. agriculture, the court decision leaves a fundamental issue unresolved: how to balance a dependable agricultural workforce with labor costs that farms can absorb while protecting domestic and foreign workers from downward wage pressure. With H-2A participation continuing to expand, the outcome of a possible appeal and the Labor Department's next AEWR rulemaking could have significant implications for farm input costs, hiring decisions and production planning across some of the country's most labor-dependent agricultural regions