Texas growers are facing higher labor bills after the U.S. Department of Labor’s 2026–2027 Adverse Effect Wage Rates (AEWRs) for the H‑2A guestworker program rose under the agency’s new methodology, agricultural groups say. The increase reflects a first full-year update using revised Occupational Employment and Wage Statistics (OEWS) data and a new housing-related adjustment, and it has renewed calls from farm organizations for Congress to limit volatile year-to-year swings in H‑2A wages.
- The DOL’s 2026–2027 AEWRs use updated OEWS data and add a housing-based Adverse Compensation Adjustment, raising H‑2A wage floors nationally.
- Average Skill Level I and II AEWRs rose to .31 and .07 per hour respectively, according to Farm Bureau reporting.
- Farm groups say the increases heighten cost pressures for Texas growers and are pressing Congress to cap year‑over‑year AEWR changes and reform H‑2A rules.
- Policy proposals like the Securing Agriculture’s Workforce Act would limit annual AEWR increases to 3.25%, aiming to stabilize costs for producers.
What changed and why it matters to Texas farms
The Department of Labor issued AEWRs that establish the federally required minimum wage that H‑2A employers must pay guest agricultural workers in each state. For 2026–2027 the DOL used May 2025 OEWS estimates under an October 2025 Interim Final Rule (IFR), and applied an Adverse Compensation Adjustment (ACA) tied to four-bedroom rental costs to account for the housing employers must provide.
Nationally, the Farm Bureau’s summary of the DOL release reports average Skill Level I rates rose to $12.31 per hour (a 3.5% increase) and Skill Level II averaged $16.07 per hour (a 2.1% increase). The Farm Bureau warned that such increases translate directly into higher per‑acre production costs for farms that rely on H‑2A labor and that some states saw double‑digit jumps.
While the Farm Bureau analysis covers all states, the implications for Texas are material because H‑2A remains a major pathway for seasonal and specialty-crop labor in the state. Farm groups say that when AEWRs move up quickly, farms operating on thin margins face heightened financial pressure to absorb or pass along higher labor costs.
How the new AEWR calculation works
Under the IFR the DOL derives separate AEWRs for two OEWS-defined skill levels that map to entry-level and more experienced field and livestock work. The ACA adds an hourly amount based on a weighted average of four-bedroom rents from HUD data so that required employer-provided housing and transportation are reflected in the wage rate.
The Farm Bureau noted this year’s release is the first full-year update under that methodology and said growers should expect continued volatility as DOL issues annual updates.
Responses from farm groups and lawmakers
National agricultural leaders and regional farm bureaus have urged congressional action to smooth the year-to-year volatility they say is contributing to rising labor costs. The Farm Bureau’s analysis highlights the Securing Agriculture’s Workforce Act (SAWA) — legislation introduced by House Agriculture Committee members — which would limit year‑over‑year AEWR increases to 3.25% and cap decreases at 1.5%.
Farm advocates argue such a cap could blunt large spikes and give growers more predictable labor-cost planning. The Farm Bureau estimated that in states with steep increases a statutory cap would have reduced employers’ wage bills substantially, illustrating the concern even when hourly differences appear modest.
Broader context: labor costs and farm economics
Farm groups are raising these concerns at a time when national labor costs overall are rising. Bureau of Labor Statistics data summarized by news outlets show the Employment Cost Index increased 0.9% in the second quarter and 3.4% over 12 months through June, reflecting faster private‑sector wage growth. Agriculture organizations say those broader trends, combined with AEWR increases, intensify pressure on farm finances already affected by commodity prices and input costs.
Congressional proposals beyond SAWA have included measures to ease administrative burden in H‑2A certification, expand multi‑year certifications, and allow greater portability of H‑2A workers between employers — all intended to lower costs or increase program flexibility, according to reporting by farm trade outlets.
Unresolved points and differing views
Not all stakeholders agree on the best response. Farm groups emphasize program reform to contain costs and stabilize labor supply. Labor advocates and unions have pushed for higher wages and protections for farmworkers; in some states lawmakers and unions are pursuing higher state-level standards for agricultural labor that could push wages above AEWRs.
Farm Bureau materials and trade reporting point to notable variation by state: some jurisdictions saw double‑digit AEWR hikes while others experienced declines. The Farm Bureau’s summary named Kansas and Nebraska among states with large increases, and highlighted that the new methodology changed the former relationship between federal AEWRs and state minimums in some places.
Practical implications for Texas producers
- Budgeting: Growers that rely on H‑2A labor should factor potential annual AEWR volatility into multi‑year budgets and contract plans.
- Policy engagement: State and national farm organizations are urging Congress to consider statutory caps on annual AEWR movement and to pursue changes intended to reduce administrative costs.
- Local wages: Employers must pay whichever is highest among AEWR, state or local minimum wages, prevailing wages, or collective bargaining rates; in jurisdictions with higher local minima, AEWR increases may be less consequential.
Timeline of recent policy and market moves
- October 2025 — DOL issues an Interim Final Rule changing the AEWR methodology to use OEWS data and to include the Adverse Compensation Adjustment.
- May 2025 — DOL’s OEWS survey data used to derive the first full-year AEWR update for 2026–2027.
- Mid‑2026 — DOL releases 2026–2027 AEWRs; farm groups and trade associations publish analyses of impacts and urge legislative fixes.
- Ongoing — Congressional proposals such as the Securing Agriculture’s Workforce Act are under consideration to cap year-to-year AEWR changes and modify program rules.
What’s next
Texas producers and state-level agricultural organizations will be watching Congress for any move to limit AEWR swings or to modify the H‑2A program’s administrative rules. Growers should monitor the official DOL wage tables for their state and skill level and consult with legal or labor-advisory resources before adjusting payroll or hiring plans. The debate over balancing worker pay, program stability and farm economics is likely to continue as yearly AEWR updates under the new methodology proceed.
“The 2026–2027 AEWRs for Skill Level I and II wages under the H‑2A visa program represent the first full year of wages under the new methodology,” according to the Farm Bureau’s summary of the DOL release.
