Legal Affairs Counsel’s Corner: H-2A Wage Litigation Update: Current Rates Remain in Effect, but Timing of Replacement Rule Is Disputed

DOL’s September 2 announcement confirms that current AEWRs remain in effect following the August 26 ruling in United Farm Workers v. DOL that remains pending in the Eastern District of California. Although the court found DOL’s October 2025 Interim Final Rule establishing the AEWR methodology unlawful, it left the rule in place while directing DOL to promptly develop a replacement methodology and publish new rates. No backpay is currently due. However, employers were formally notified that they may eventually owe wage adjustments to H-2A workers and U.S. workers in corresponding employment for work beginning September 2 if replacement AEWRs exceed the wages paid. DOL expressly disputes whether such backpay obligations can lawfully be imposed and has reserved its right to challenge the court’s order.

In a Joint Status Report filed with the court on September 9, 2026, DOL told the court it expects to need nine to twelve months to issue a replacement methodology through a final rule. DOL says it must reevaluate 887 public comments in light of the ruling, consider alternatives to the wage survey used in the challenged rule, and complete required government review. It argues that rushing another interim rule could invite additional litigation and further delays. DOL proposes submitting progress reports every 90 days and says it is continuing to provide the potential-backpay notice with newly approved H-2A certifications.

UFW strongly opposes that timeline and asks the court to require an interim replacement methodology by September 23, 2026, or shortly thereafter, while allowing DOL to develop a permanent rule later. UFW argues that another nine to twelve months would prolong wage reductions that make it difficult for workers to cover basic necessities. It also contends that keeping lower rates in place could depress the wage data used to calculate future AEWRs, carrying those reductions forward. If leaving the existing rule in place prevents prompt action, UFW asks the court to set it aside. UFW also requests another status report two weeks after the court rules on the timeline.

For employers, these are competing proposals—not a court-approved schedule or an announcement of new wage rates. Continue paying the currently applicable required wages, while recognizing that work performed beginning September 2 may be subject to later adjustments. Maintain accurate payroll records and current contact information for potentially affected H-2A workers and U.S. workers in corresponding employment, including permanent addresses, available phone numbers and email addresses, and applicable identifying information described in DOL’s notice. The next significant development will be the court’s response to the proposed timelines, which could determine whether employers face a near-term wage change or a much longer period of uncertainty.

California Wage Legislation: H-2A Minimum Wage and Goat Herder Pay

California lawmakers have passed two bills affecting agricultural wages. AB 2646 would establish a $19.75 hourly wage floor for covered temporary agricultural workers, including H-2A workers, and California residents performing substantially similar work for the same employer in the same county. The bill also provides for annual cost-of-living adjustments beginning January 1, 2027. Agricultural and business groups have urged Governor Newsom to veto the bill, citing the additional burden on growers already paying for H-2A housing, transportation, and other program requirements.

Separately, AB 187 would restore the alternative monthly wage structure for qualifying goat herders through December 31, 2028, aligning their pay requirements with those applicable to sheepherders. Goat herders play an important role in California’s wildfire prevention efforts by managing grazing herds that consume dry grass, brush, and other vegetation that can fuel fires. Homeowners associations, park districts, and fire safe councils rely on these services to reduce hazardous vegetation. After the prior wage provision expired July 1, grazing operators warned that substantially higher labor costs could make these services unaffordable and reduce their availability. The Legislature passed AB 187 on August 31 to address those concerns through a temporary extension, which the California Farm Bureau has already indicated it will seek to make permanent in the near future.

California’s 2026 herder wage chart lists minimum compensation under the alternative framework of $4,938.21 per month for qualifying herders working regularly scheduled 24-hour shifts, seven days a week. That consists of a $3,004.50 monthly minimum wage plus $1,933.71 in required overtime pay, regardless of employer size. Employer-provided meals and lodging cannot be credited against those wages. However, DIR’s guidance states that, following expiration of the goat herder exception on July 1, goat herders must receive the applicable hourly minimum wage plus required overtime and double-time premiums.

AB 187 was presented to Governor Newsom on September 8. He has until September 30 to sign or veto both bills; either becomes law without his signature if he takes no action by that deadline. AB 187 would take effect immediately upon enactment, but its enrolled text contains no provision making the goat herder wage changes retroactive to July 1. Accordingly, employers should continue complying with the hourly wage requirements until the bill takes effect and should not assume enactment would eliminate obligations for wages owed during the gap.

Arizona Court Rejects H-2A Employer’s Worker “Poaching” Claims

A recent Arizona Court of Appeals decision addresses a growing concern for H-2A employers: investing significant time and money in recruiting and bringing workers to the United States, only to lose them to another employer. In Dream With Colors, Inc. v. Santos, decided July 10, 2026, the court affirmed summary judgment against an H-2A employer that accused a competing landscaping business of improperly recruiting its returning workers. The employer argued that the competitor interfered with its employment relationships and its investment in recruitment, application processing, and transportation. While workers arguably receive the benefit of protections in the form of the three-quarter guarantee and inbound/outbound reimbursements, employers have long complained that they should receive reciprocal protections for workers who fail to honor the terms of the underlying H-2A job contract to completion. 

The court rejected the argument that participation in the H-2A program, or the costs associated with it, created a protected expectation that former workers would return in subsequent seasons. It also found insufficient evidence that the competitor used improper means to recruit the workers. Offering higher wages and benefits, the court explained, is ordinary competition for employees. Allegations that the competitor misclassified workers as independent contractors did not establish interference without evidence connecting that conduct to the workers’ decisions not to return.

The decision is particularly relevant given DHS’s H-2 modernization rule, effective January 17, 2025. The rule provides a grace period of up to 60 days following cessation of employment, including voluntary resignation, during which workers may seek another qualifying position (as opposed to 30 days for workers who complete a contract). Its portability provisions also allow eligible workers to begin new H-2 employment after USCIS receives a properly filed, nonfrivolous petition, subject to applicable requirements; the grace period alone does not authorize employment. During rulemaking, employers specifically warned that workers could arrive, resign, and seek higher-paying jobs after the original employer incurred recruitment and travel costs. DHS nevertheless retained the grace period regardless of the reason employment ended.

The ruling highlights the limits of relying on recruitment expenses alone to support a claim against a competing employer. However, it did not resolve every mid-contract “poaching” dispute because the court ultimately declined to decide whether the employer had a protected contractual relationship or expectation that workers would complete their current term. The court specifically concluded that there was a lack of evidence that the H-2A worker alleged to have left mid-contract actually worked for the competitor. The underlying events also predated DHS’s 2025 Rule, and the ruling is a nonprecedential memorandum decision. Notwithstanding, its practical message is still significant: H-2A employers seeking to combat poaching of workers by competitors will likely face an uphill battle via similar contract related claims that foreseeably implicate the critical issue of labor mobility in the H-2A stakeholder community. 

For employers, the practical response is to make long-term worker retention a priority. Maintain high employee engagement through regular check-ins, responsive supervisors, clear communication, and timely resolution of concerns about housing, transportation, or working conditions. Consider rewarding returning workers through raises, discretionary bonuses, or clearly defined production-based incentives, structured consistently with applicable wage and H-2A requirements. Where employers implement wage decreases following DOL’s 2025 interim final rule changing the AEWR methodology, proactively explain what changed, why the company is adjusting pay, and what workers can expect. Distinguish changes in the legally required wage from the employer’s own compensation decisions, acknowledge the impact on workers, and highlight concrete benefits and opportunities to earn more. Workers should hear that explanation directly from a trusted employer contact before rumors or competing offers shape their understanding.