The recent win for farmworker activists in the Ninth Circuit Court of Appeals takes agricultural employment a giant step backward and sets a dangerous precedent for all employers.

Ninth Circuit judges recently granted Familias Unidas por la Justicia (FUJ), an AFL-CIO affiliated organization, its demand that previously collected prevailing wage survey data be thrown out. The opinion requires the lower district court to review other wage data that FUJ claims shows the Adverse Effect Wage Rate (AEWR) depresses in Washington state. The AEWR is the minimum wage required to be paid to all H-2A visa holders working in Washington state for 2024, and their local counterparts doing the same work alongside them.

The AEWR creates a de facto minimum wage for local and foreign workers alike within Washington state’s labor system. The AEWR has risen considerably in the last five years. It was set at $15.03/hr. in 2019 and is now $19.25/hr. for 2024, a 28 percent increase, while the rest of the economy saw an overall increase of 4 percent. When H-2A visa holders are present, the AEWR is the required minimum wage for all workers doing the same job on a farm or ranch, providing equity for all people in that environment.

The court’s opinion effectively forces an employer, in this case farms and ranches, to consider two wage rates – the AEWR and piece rates – and pick whichever wage rate is higher regardless of operating expenses. As noted above, the AEWR changes annually while piece rates are equally as volatile for different reasons that will be outlined below.

At the heart of the argument in the Ninth Circuit Court was the way wages are calculated for domestic and foreign farmworkers. Under the current system, survey data is collected from employers to determine the average wage being paid to farmworkers in Washington state. Survey advocates insist the annual wage data collection is the only way to protect farmworker wages. Survey detractors question whether the survey is necessary under federal law given that nearly half of U.S. farms and ranches do not report wage data annually. 

During oral arguments, Andrea Schmitt, counsel for FUJ, stated it was common knowledge apple pickers working for piece rates could pick a bin an hour, making the calculations simple. A quick search of piece rates turns up a first-hand farmworker account from Pennsylvania noting piece rates are extremely variable depending on whether fruit is being picked for color, picker experience, orchard conditions, and other factors. As a result, piece rates can vary tremendously. The U.S. Department of Labor contended employers were compelled to pay the AEWR, an hourly wage, if farmworkers here on an H-2A work visa doing the same work were present alongside local employees, or piece rate – whichever was highest – when dealing with the convoluted wage structure. 

Schmitt further contended the AEWR artificially depressed wages because piece rates were often higher than the AEWR and should be the “prevailing” wage paid to workers throughout agriculture. She indicated prevailing wages were often not listed on job orders used to recruit local workers, in effect, allowing agricultural employers to circumvent hiring local people in favor of H-2A visa holders. Under the rules of the H-2A program, agricultural employers must show they tried to recruit a local workforce for a minimum of 60 days prior to hiring foreign farmworkers and continue to recruit local workers for at least 50 percent of their working period after bringing H-2A workers from their home countries.

The prevailing wages for agriculture are maintained through a federal register, similar to the AEWR, and considered the base rate for piece rates. However, they are also broken down into specific categories by variety and activity. For example, Honeycrisp apples have three distinct activity categories and two distinct wage categories. The Honeycrisp activity categories include harvest, thinning, and pruning. Those activities are separated into two wage categories with thinning and pruning both requiring a wage of $15.83/hr., less than the current AEWR, and harvesting requiring a piece rate of $31.76/bin or $13.50/hr, whichever is greater. 

Schmitt argued the bin or piece rate should supersede any hourly rate paid because it is higher than either the hourly bin minimum or the AEWR. The argument doesn’t hold water, though. Piece rates were offered for a great many picking jobs in the tree fruit industry but fell out of favor after the landmark case Carranza v. Dovex Fruit Co. The court ruled Washington state’s tree fruit growers were required to distill piece rates for all their employees into an hourly rate to pay for lunch and rest breaks, creating the need for additional accounting and encouraging the switch to an across-the-board hourly wage. 

Additionally, piece rates created a lack of uniform pay structures. If two employees working side-by-side were doing the same job for the same amount of time but one got paid significantly more based only on the amount of fruit picked, an adversarial environment was created amongst farmworkers and, ultimately, their employers, potentially opening the door for additional litigation. So, while in the strictest sense, Schmitt is correct that prevailing wages should be the rate paid, it creates inequity amongst farmworkers to offer stratified wages based on individual effort rather than an hourly rate that assumes all workers are equal.

Piece rates may also sacrifice safety in favor of earning money at all costs. If the goal is to pick as many bins as possible in a shift to earn as much as possible, the less time spent on rest breaks, lunch breaks, and cooling down periods, the more time spent earning money. Farmworker activists pushed for shorter workdays and more stringent rules for hydration and rest periods during the hottest times of the year. Now they are arguing for a wage structure that is predicated on working as hard as possible for as long as possible, effectively creating a no-win situation for farmworkers and their employers. If farmworkers earn wages via piece rates, they may have their earning potential cut short by summer heat, wildfire smoke, or other regulations. If farmworkers are earning wages via hourly rates, the pay may seem smaller at the time but, ultimately, be larger in the end with the additional benefit of a safer work environment.

By forcing farms and ranches to offer two different wage structures on job orders – hourly or piece rate – the Ninth Circuit Court of Appeals has inadvertently taken agricultural employers, and by extension other businesses, down the path of forcing employers to choose a higher rate of pay over what the market will bear. By forcing employers to choose the higher of two wage structures, the “market” is not the driver of wage rates as Schmitt argued. The market determines what business owners can bear by reflecting supply and demand, not by government or judicial intervention. If farmers and ranchers can be forced to choose whichever pay scale is higher, other business owners can surely be compelled to do the same by the court.

If Washington state is ever going to achieve a robust local agricultural workforce again, it will not be via government or judicial intrusion. Our agricultural community needs support in the form of fewer regulations. Employers need to be allowed to offer a living wage that encourages productivity, loyalty, and growth within job responsibilities. Employees need to earn a wage that encourages a desire to work harder, remain with a single employer, and still find enjoyment in their work. 

A balance can be achieved when decisions are made on the ground by farmers and workers – the people who must live with the decisions and deal with the consequences of those decisions.