The New 2026 H-2A Wage Rules: A Simple Guide to the 'Skill-Based' AEWR & Housing Adjustment

If you're in the agricultural world, your entire budget for 2026 just got thrown into a blender.

On October 2, 2025, the Department of Labor (DOL) dropped a bombshell: an Interim Final Rule (IFR) that completely changes how H-2A wages are calculated.¹ This is, without exaggeration, the single biggest change to the H-2A program's wage structure in over a decade.

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For years, you've budgeted around a single, high, all-encompassing wage rate for your state, known as the Adverse Effect Wage Rate (AEWR).

As of October 2025, that system is dead.

The new rule, which is effective right now for all new H-2A applications, introduces two massive new concepts:

1. Skill-Based Wage Tiers: You will no longer pay one rate.² You will pay different rates based on the skill level of the job.³
   
   
2. A Housing Adjustment: For the first time, the DOL is allowing employers to reduce the cash wage paid to H-2A workers to account for the free housing they provide.⁴
   
   

This is a game-changer that could save farmers billions of dollars, but it's also incredibly complicated. If you misclassify your jobs or miscalculate your wage, you are opening yourself up to massive DOL fines and back-wage payments.

My job is to make this simple. Here is what you need to know.

Part 1: The Old Way vs. The New Way

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To understand why this is such a big deal, let's look at the old system.

• The Old Way (Before Oct. 2025): The DOL used the USDA's Farm Labor Survey to create one single wage for almost all farm jobs in your state.⁵ It didn't matter if the worker was a first-day fruit picker or a 20-year veteran operating a complex harvester. If the AEWR in your state was $18.00/hour, you paid everyone $18.00/hour.
  
  
• The New Way (Today): The DOL has thrown out that old survey.⁶ It's now using wage data from the Bureau of Labor Statistics (BLS) and has split jobs into two skill levels: Skill Level I (Entry-Level) and Skill Level II (Experience-Level).⁷
  
  

This means that for the first time, you can pay different, appropriate wages for different jobs.⁸

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Part 2: "Skill-Based AEWR" Explained

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This is the heart of the new rule. Your job descriptions are now more important than ever.

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Skill Level I: Entry-Level

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This is the new "base" wage. It's for jobs that require:

• No or very little work experience (generally 0-2 months).⁹
  
  
• No prior certifications.
• Work that is "closely monitored, tracked, and assessed for quality."

Simple Example: This is your hand-harvester, your field packer, the worker planting or weeding.¹⁰ Most general farm labor will fall into this category.¹¹

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Skill Level II: Experience-Level

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This is the higher wage. It's for jobs that require:

• Prior experience, certifications, or technical knowledge.
• The ability to work with "less supervision."

Simple Example: This is your Agricultural Equipment Operator who drives a tractor or harvester. This is your Crew Supervisor who manages other workers. This is a worker who must have a "Certified Pesticide Applicator" license.

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Why This Is a Big Deal:

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In most states, the new Skill Level I wage is lower than the old, single AEWR. The Skill Level II wage is often higher.¹²

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This change finally gives farmers a way to pay a more appropriate wage for entry-level work, while also providing a higher, competitive wage to attract and retain experienced, skilled workers.

Part 3: The "Housing Adjustment" Explained

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This is the second half of the revolution. The DOL has finally—and officially—admitted that the free housing H-2A employers are required to provide is a massive, valuable benefit.

Under the new rule, employers are allowed to take a "downward compensation adjustment" from the H-2A worker's wage.¹³

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Let's break this down in simple terms.

• The DOL has set a specific dollar-per-hour adjustment amount for each state (e.g., it might be $1.50/hour in Georgia or $3.00/hour in California).¹⁴
  
  
• You can subtract this amount from the new AEWR for your H-2A workers only.
• This is not a "deduction." It's a calculation to find the new, final cash wage you must pay.

Example Calculation:

1. Let's say the new Skill Level I AEWR in your state is $16.00/hour.
2. And your state's "Housing Adjustment" is $1.50/hour.
3. The final cash wage you must pay your H-2A worker is $14.50/hour ($16.00 - $1.50).

BUT (And This Is a GIANT "But")

There are two massive compliance traps here.

1. The State Minimum Wage is the Floor: You always have to pay the highest of the final adjusted AEWR, the state minimum wage, or the federal minimum wage.¹⁵
   
   

• In our example, if your state's minimum wage is $15.00/hour, you must pay $15.00/hour.¹⁶ The state minimum wage overrides your new, lower $14.50/hour calculation. This will be the case for many farms in states like California, New York, and Washington.¹⁷
  
  

2. This Adjustment is for H-2A Workers ONLY: You cannot apply this adjustment to your U.S. workers in "corresponding employment."¹⁸ They must be paid the full, un-adjusted AEWR.¹⁹
   
   

• In our example, your H-2A worker gets $14.50/hour. Your U.S. worker doing the same job must be paid the full $16.00/hour. This is a critical, and confusing, new piece of bookkeeping.

Part 4: Your 3-Step Action Plan (What to Do Now)

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This rule is effective for all new H-2A job orders filed after October 2, 2025.²⁰ This means if you are planning for your 2026 season, you must follow these rules.

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Step 1: Audit and Rewrite Every Job Description

You can no longer use a generic "Farmworker" job description. You must sit down and rewrite every single job description on your farm.

• What are the exact duties?
• What experience is truly necessary?
• What certifications are required?
• How much supervision does this role get?

Your answers to these questions will determine if a job is Skill Level I or Skill Level II. Do not try to classify a job as Level I if the worker will be driving a tractor. Misclassification is the fastest way to a DOL audit and a massive bill for back wages.

Step 2: Re-Build Your 2026 Budget from Scratch

Your old labor budget is useless. You must re-calculate your entire 2026 labor cost.

1. Go to the DOL's FLAG website and find the new 2026 AEWRs for your state (both Skill Level I and II).
2. Find your state's "Housing Adjustment" amount.
3. Find your state's 2026 minimum wage.
4. For each job, calculate the final wage. Remember, it's the highest of:

• (Skill Level I or II AEWR) - (Housing Adjustment)
• Your State Minimum Wage
• The Federal Minimum Wage ($7.25)²¹
  
  

Step 3: Call Your H-2A Consultant Immediately

This is not a "do-it-yourself" project. The DOL is giving farmers a potential cost-saving gift with this rule, but it's wrapped in 100 pages of legal complexity.

An experienced H-2A agent will be able to:

• Help you correctly classify your jobs to be compliant.
• Ensure your new job orders are written perfectly.
• Verify your wage calculations to protect you from an audit.

The DOL has also opened a 60-day public comment period on this new rule, which ends on December 1, 2025. This means the agency is actively listening, but for now, this is the law you must follow.

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A Note From Our Agency

This is the most significant—and most confusing—change to the H-2A program we have ever seen. For the first time, you have the ability to pay a wage that reflects the actual job being done, but your compliance burden has just become 10x more complex.

Our team has already analyzed this new rule and is building 2026 wage-compliant plans for our clients. We can help you audit your job descriptions and build a 2026 budget that is 100% compliant and maximizes your potential savings.

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Contact Us Today for a free 15-minute consultation to discuss your new 2026 H-2A wage strategy.