OMAHA (DTN) -- A federal judge in California on Wednesday invalidated a Trump administration rule that could potentially lower wages to foreign guest workers by as much as a projected $2.46 billion annually.

The National Council of Agricultural Employers (NCAE) said the ruling reignites an "existential threat" to farmers and their ability to hire workers going forward because of high wages. The United Farm Workers (UFW), which brought the case, praised the decision, stating that the men and women who put food on Americans' tables should be paid fairly.

Judge Kirk Sherriff of the U.S. District Court in Eastern California granted a summary judgment against the Labor Department's new Adverse Effect Wage Rate (AEWR) rule, which sets the minimum wages in each state for H-2A workers. Sherriff ruled the Labor Department rushed through its rulemaking process and lacked justification to skip public notice-and-comment periods for most of the changes in the rule.

The Labor Department did not issue an immediate public statement after the ruling.

The Labor Department argued it needed to rush through its interim final rule last October because of the Trump administration's own aggressive immigration enforcement that had created "acute labor shortages and instability" in agriculture. When the rule was handed down last year, the Labor Department estimated undocumented workers accounted for 42% of the agricultural labor force while H-2A workers were 16% of farm workforce.

The rule asserted farmers were facing a "sudden and large-scale departure" of undocumented, lower-paid workers that was expected to significantly increase labor costs for farmers. These higher labor costs would then threaten agricultural productivity and the food supply.

The Labor Department also argued the previous AEWR created a formula that set the wages too high for most farmers to pay them. The rule also changed the housing rules for H-2A workers that would dock pay from them.

Still, even assuming a labor shortage, Sherriff ruled the Labor Department's argument that wages needed to be lowered to ensure farmers could hire more H-2A workers "is not economically rational." The Labor Department provided no evidence to support its argument that farmers have been priced out of using H-2A workers, Sherriff stated. He pointed to H-2A data showing that hiring under the program had quadrupled over the past decade, "which suggests the opposite is true."

H-2A use has dramatically increased. Through three quarters of FY 2026, the Labor Department has certified just under 350,000 positions at more than 30,600 farms nationally. Five states -- Georgia, Florida, Washington, California and North Carolina -- make up nearly half of all H-2A jobs.

Sherriff ruled the new AEWR also created a system that could lower wages for H-2A workers who perform multiple jobs by allowing them to be paid based on lower-skilled work rather than higher-skilled duties. Dubbed the "greater than 50%" rule, Sherriff said the change could encourage employers to structure workers' duties so that higher-paying jobs never account for a majority of an employee's work, lowering wages in the process.

The new AEWR rule also relies on a Labor Department's Occupational Employment and Wage Statistic (OEWS) survey instead of the USDA Farm Labor Survey, which agricultural employers argued was inaccurate in setting H-2A wages. To help change the AEWR, the Trump administration eliminated the Farm Labor Survey last year, effectively forcing the Labor Department to rely on other wage data.

The Labor Department acknowledged its OEWS has shortcomings when it comes to including a sufficient section of farm workers. The Labor Department had previously noted in rulemaking that the OEWS was not an appropriate survey to track farmworker wages.

Sherriff remanded the rule back to the Labor Department, although the Trump administration is likely to appeal the decision. Sherriff also suggested workers could be entitled to back pay once the Labor Department rewrites the rule to comply with the law.

Last spring, Sherriff had denied a temporary injunction against the AEWR, allowing it to go into effect while he weighed the issues raised in the case.

John Hollay, president and CEO of the NCAE, which represents a range of agricultural industries, said the Labor rule had helped avert a worker crisis in rural America, but the court's ruling reignites that crisis. "For years, America's farmers, ranchers, and growers have been pushed toward a breaking point by artificially inflated wage mandates. The Department averted a crisis in rural America by issuing the (interim final rule). The ruling reignites this crisis."

Hollay said the ruling also underscores the need for Congress to pass the Securing Agriculture's Workforce Act. "The fate of farming in America should not be determined at the whim of a single judge in California."

Teresa Romero, president of the United Farm Workers, said the group was pleased the court found the wage cuts, which were as much as $7 an hour in some states, were illegal. Romero said the ruling recognizes the essential work of farm labor.

"The government must move quickly to issue new legal wage rates that protect the jobs and wages of local farm workers, and employers must be held accountable for paying back any difference between the new legal wage and the illegal wage rates still in effect," Romero said. "While this decision is a heartening step, we know attacks on farm worker wages will continue. The United Farm Workers will always be there to fight for the wages farm workers deserve."

Also see DTN's Special Ag Labor Coverage: https://www.dtnpf.com/….

Chris Clayton can be reached at Chris.Clayton@dtn.com

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