WASHINGTON, DC – A federal court has ruled key parts of the Labor Department’s 2025 H-2A wage methodology unlawful, creating uncertainty for farm employers while the agency develops a replacement system.
University of Maryland Eastern Shore Extension says the Eastern District of California found the interim final rule violated federal administrative law. The rule shifted wage calculations to Occupational Employment and Wage Statistics data, created two skill tiers, added a housing adjustment and changed how mixed job duties determine pay.
The court found the tiered wage rates, housing adjustment and greater-than-50% job rule arbitrary and capricious. It also said the department failed to adequately consider problems with using wage data drawn primarily from farm labor contractors.
The court did not vacate the rule. The existing methodology may remain in use while the Labor Department develops and publishes a new system consistent with the ruling.
Employers also face potential backpay exposure. The court ordered notice that workers may be owed additional wages and said the parties must address backpay after the new methodology is published.
Farm-Level Takeaway: H-2A employers should watch for a new federal wage methodology and possible backpay requirements following the court ruling.