Grower-FLC Compliance in H-2A: How to Manage Joint Employment Risk and Protect Your Operation

The relationship between a grower and a farm labor contractor is one of the most legally exposed in all of H-2A — and one of the most misunderstood. A common assumption among growers, including some of the largest brand-name agricultural operations in the country, is that hiring an FLC transfers all compliance liability to that contractor. It does not.

This post summarizes a recent webinar we hosted covering the current legal landscape for grower-FLC relationships, the new joint employment regulations taking shape, and the practical steps that growers and FLCs can take to protect their businesses.

What's Happening in the Courts

The AEWR Rule and UFW's Challenge

The first full growing season under the new Adverse Effect Wage Rate rule is now underway. Following litigation across multiple courts in North Carolina, Louisiana, and Florida the old AEWR rule was successfully challenged on two fronts: the classification of workers outside the traditional "Big Five" specialty occupations, and the adjustments for skill level and housing.

The result is meaningful wage relief, especially in Georgia. Florida enacted a high state minimum wage at the state level, which significantly reduced the benefit of the federal rule change. On the Georgia side of the state line, the reduction in wage obligations has been substantial.

United Farm Workers (UFW) responded by filing suit in Fresno, California — a deliberately chosen venue — seeking a preliminary injunction to block the rule from taking effect. That injunction was denied. The rule remains in effect and is expected to be finalized later this year.

Once finalized, the rule carries two practical implications. First, it is locked in for the remainder of the current administration. Second, finalization opens the door for UFW to re-litigate from scratch, since the rule they originally challenged will technically be superseded by a new final rule. The final rule may also go further than what was initially proposed — including a provision that would eliminate the requirement to provide free housing, something DOL invented by regulation rather than congressional mandate.

Sun Valley Orchards: The Case That May End the ALJ Process in H-2A

Sun Valley Orchards is a fourth-generation family farm in New Jersey that became the subject of a DOL enforcement action stemming from a labor audit more than a decade ago. Workers quit mid-season, later claiming they were fired and mistreated. DOL built a case using worker statements without those workers present at the hearing. The case wound through a completely internal DOL adjudication process — investigators, prosecutors, and judges all employed by the same agency — before Sun Valley won at the federal appeals level.

The appeals court held that enforcing a contract in this context requires a real court, a real judge with lifetime tenure, and the right to a jury trial under the Seventh Amendment. DOL's in-house adjudication system, the Administrative Law Judge process, is constitutionally suspect for these types of claims.

DOL petitioned the Supreme Court, which has accepted the case. It is believed to be the first H-2A case ever to reach the Supreme Court, and oral arguments are expected this fall with a decision likely in 2027.

If the Court upholds the appeals ruling, the practical effects would be significant. DOL would need to refer enforcement cases to the Department of Justice to prosecute in federal court — a much heavier lift that would likely reduce both the volume of cases brought and DOL's willingness to pursue weak ones. It could also create real leverage to recover attorney's fees in cases where employers prevail.

Recent Regulatory Changes

Independent Contractor Rule

In February 2026, DOL published a new independent contractor rule rescinding a 2024 Biden-era rule and reinstating an "economic reality" test. The test focuses on two core factors: the nature and degree of the worker's control over their own work, and the worker's opportunity for profit or loss based on initiative and investment.

The honest answer for most agricultural employers is that very few relationships truly qualify as independent contractor arrangements. The level of control employers must relinquish — over how work is performed, when it's done, and what tools are used — is rarely compatible with how farms actually operate. Misclassification remains one of the most frequently investigated wage and hour issues, regardless of which administration is in office.

For H-2A employers specifically, the more significant development is not the independent contractor rule but the pending joint employer rulemaking.

The Joint Employer NPRM

A Notice of Proposed Rulemaking on joint employment was published last month, with a comment period closing around June 22nd. The NPRM proposes to define joint employer status consistently across three major statutes — the Fair Labor Standards Act, the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act — using a single four-factor test.

The NPRM distinguishes between two types of joint employment:

Horizontal joint employment is less common in agriculture and involves two entities sharing a worker's time — think two restaurant franchises with a common owner splitting a worker's hours to avoid overtime obligations. It does come up occasionally in association-based H-2A filings or when related farms share labor. Under the NPRM, horizontal joint employment requires an arrangement between entities to share employee services, shared control of the employee, or control of one employer over the other.

Vertical joint employment is the relationship that matters most in agricultural labor contracting: whether the grower who hires an FLC may be considered a joint employer of the FLC's workers. The NPRM sets a four-factor test for vertical joint employment:

1. Whether the potential joint employer hires or fires the employee

2. Whether they supervise and control work schedules or conditions of employment to a substantial degree

3. Whether they determine the employee's rate and method of payment

4. Whether they maintain the employee's employment records

No single factor is determinative. They are evaluated as a totality of circumstances.

Additional factors that may also be considered include whether the worker has a continued or repeated relationship with the potential joint employer, whether they work at a location owned or controlled by that employer, and whether the worker is economically dependent on that employer for work.

Importantly, the NPRM also lists things that do NOT establish joint employment on their own: contractual requirements for health, safety, and operating standards; providing employee handbooks; offering participation in a health plan; and quality control standards that ensure work is consistent with the operation's requirements. These carve-outs matter for growers trying to maintain oversight without crossing the line into control.

One significant change from prior standards: under the new rule, the potential joint employer must actually exercise control, not merely possess the contractual ability to do so. A written agreement giving the grower the right to fire workers does not itself establish joint employment if the grower never exercises that right.

The Legal Landscape for FLC Relationships in H-2A

The 11th Circuit, which covers Florida, Georgia, and Alabama, has addressed joint employment in the H-2A context directly. The key takeaway from Consolidated Citrus (now operating as King Ranch's Florida Citrus Operation) is that very specific operational control — including how workers picked fruit, washing requirements, schedule control — was enough to establish FLSA liability, but not enough to trigger H-2A employer status. The FLSA threshold is lower. H-2A employer status requires more direct employment control.

That distinction matters practically. A grower who is found to be a joint employer under FLSA for an FLC's workers faces minimum wage and overtime exposure. A grower found to be an H-2A joint employer faces the full suite of H-2A obligations — including three-quarter guarantee requirements, housing, and wage compliance — for every worker the FLC brought in under its labor certification.

One other litigation development worth tracking: in Martinez Lopez v. GFA Alabama, a 2025 case involving a Hyundai logistics contractor, workers were brought in on professional visas for unskilled warehouse jobs. Plaintiffs survived a motion to dismiss on RICO, Title VII, ADA, and FLSA claims. The use of RICO statutes in labor exploitation cases is a growing trend in Georgia and elsewhere. Surviving a motion to dismiss in federal court essentially guarantees settlement pressure — which is itself a significant threat to employers.

The Real Risk: What Growers Get Wrong

The most common misconception in agricultural labor contracting is this: We hired an FLC. Their license means they're vetted. Their liability is their problem.

Major brand-name growers — names that appear in supermarkets across the country — make this mistake regularly. Having a licensed farm labor contractor with a valid FLC card does not insulate a grower from liability. Legal services organizations know this, and when they sue an FLC, they virtually always include the grower as a named defendant. The reason is straightforward: growers own land. FLCs often have limited attachable assets.

Getting dragged into litigation as a defendant — even a defendant who ultimately prevails — creates reputational exposure, compliance investigations, and significant legal costs. The better strategy is to prevent the problem rather than win the lawsuit.

Best Practices for Growers and FLCs

Keep the Employment Relationship Separate

The clearest driver of joint employer findings is operational control of individual workers. Best practices include:

• Grower employees should not directly supervise, direct, or discipline FLC workers

• Directions about what work needs to be done should flow from the grower to the FLC's designated manager — not to individual workers on the crew

• The FLC should handle all hiring, firing, disciplinary decisions, timekeeping, and payroll

• Hour tracking, if done by grower personnel, is a risk factor — that function should stay with the FLC

• Safety interventions (stopping an unsafe act in real time) are carved out and will not create employer liability on their own; routine supervision is a different matter

The practical model that works: designate a single point of contact on both sides. The grower communicates with the FLC manager. The FLC manager directs the crew. When that structure holds, the legal separation holds with it.

Vet Your FLC Thoroughly Before the Season

In Georgia specifically, new FLCs are formed at an unusually high rate. Some of those entities are owned by individuals previously associated with FLCs that are now under investigation or have been debarred. Basic due diligence before entering a contract includes:

• Google the company and its owners. Check for press releases, DOL enforcement actions, and court filings. Phone numbers are often more reliable identifiers than company names.

• Verify the license. An FLC must be registered as a farm labor contractor under MSPA. This can be confirmed online.

• Check DOL's Wage and Hour enforcement database. Prior enforcement actions are publicly searchable.

• Ask for the FLC's compliance documentation. Payroll system, handbook, arbitration agreements, whistleblower policy, insurance certificates and policy limits, pesticide compliance, food safety certifications if applicable.

• Ask for references from other growers, and call them.

• Ask to see proof of ongoing compliance. Are they members of NCAE or another industry association? Have they completed any audits or certifications?

An FLC that resists sharing compliance documentation is telling you something.

Build a Contract That Actually Protects You

The most consistently overlooked protection in grower-FLC relationships is a well-drafted written contract. Seven-figure seasonal labor arrangements documented on a single page are not uncommon. This is a serious problem.

The document submitted to DOL with an H-2A filing needs only to confirm that an agreement exists and describe its basic terms. The actual contract governing the relationship between a grower and an FLC should be a comprehensive document — closer to 20 pages — that addresses:

• Indemnification: who is responsible if something goes wrong

• Insurance requirements: what coverage the FLC must carry, at what limits, and with the grower named as an additional insured

• Who provides worker training and how

• The grower's right to audit payroll records and compliance documentation

• What happens if the FLC is unavailable, abandons the contract, or violates the agreement

• Termination provisions

• Non-exclusivity language (the FLC should not be prohibited from providing services to other operations — exclusivity creates economic dependency, which is a joint employment factor)

• Explicit language confirming that the FLC is the sole employer of its workers

Do not bring this contract to DOL. Keep the comprehensive version as your internal protection.

Know the Consular Verification Call Risk

The State Department and the Kentucky Consular Center have significantly increased verification calls to growers as part of the visa processing process. These calls ask growers to confirm basic contract details — whether they're requesting workers, whether they're working with a particular FLC, and the scope of the work.

Growers who don't answer, don't recognize the call, or give answers that don't match the filed paperwork can cause contracts involving more than 100 workers to be stalled for weeks. Preparing growers for these calls — making sure someone designated is expecting them and knows what the filed terms say — is now a non-negotiable part of good filing practice.

Human Trafficking: A Real Risk, Often Misunderstood

The Trafficking Victims Protection Act carries severe penalties, and its definition of covered conduct is broader than most employers expect. Anyone who benefits from forced labor can be brought in — including a grower who benefits from an FLC's labor and is found to be a joint employer.

Signs that an FLC's workers may be in a trafficking situation include workers who appear threatened or intimidated, workers who describe being deceived about the terms of their employment, restriction of workers' movement, substandard housing or working conditions, excessive debt obligations to the employer, and wages being withheld.

Several practices that employers adopt with legitimate intentions can also attract scrutiny: holding workers' passports (now addressed by a regulatory provision allowing this if the worker requests it and can retrieve them on request), requiring workers to sign agreements committing to complete the season, or placing a fence around a labor camp. Context matters, but employers should be aware that investigators and legal services attorneys will characterize these facts in the least favorable light.

When in doubt, run communications through clear channels, document consent, and avoid any language that could be characterized as threatening workers with deportation or legal consequences as a means of compelling work.

A Note on Wages

AEWR calculations are becoming more complex under the new rule, with housing and wage survey components interacting in ways that aren't always intuitive. New wages are expected on or around July 1. If wages go down from current contract rates, most employers are locked into their existing rate. If wages go up, employers are obligated to step up. Growers who haven't modeled what a wage adjustment means for their current contracts should do that now.

The Bottom Line

The grower-FLC relationship is not a liability transfer. It is a business partnership with shared compliance exposure. The employers who will navigate this environment successfully are the ones who:

• Vet their FLCs the way they would any major business partner

• Build written contracts that actually address what happens when things go wrong

• Keep operational and employment functions clearly in the FLC's hands

• Stay current on regulatory and litigation developments that affect how that relationship is characterized

None of this requires giving up oversight of your operation. It requires structuring that oversight through the right channels.

Want to talk to an expert to review your operation's strategy? Get in touch with Seso →

Nothing in this post constitutes legal advice. Visa eligibility is fact-specific. Consult a licensed immigration attorney for guidance on your situation.