The H-2A back pay clock started September 2. Is it in your cash plan?

Thombar Team

Sep 28, 20266 min read

tl;dr: On August 26, a federal court threw out the Labor Department’s 2025 method for setting H-2A wages. Current rates stay in place for now, but DOL has told employers they may owe back pay for every week from September 2, 2026 until new rates come out. Nobody knows the number yet. That is exactly why it belongs in your cash plan today, not after the season.

What happened

August 26: In United Farm Workers v. DOL, the U.S. District Court for the Eastern District of California found the Adverse Effect Wage Rate (AEWR) method in DOL’s October 2025 interim final rule unlawful. The court called several pieces “arbitrary and capricious,” including the two-tier wage structure, the housing adjustment, the switch to OEWS wage data, and assigning a single rate to multi-duty jobs. It also found DOL skipped notice and comment for most of the changes.
Current rates stay, for now. The court left today’s AEWRs in effect while DOL writes a new method. There is no hard deadline, only an order to act “promptly.”
September 2: DOL’s Office of Foreign Labor Certification told employers they “may be required to make wage adjustment payments to qualifying H-2A workers and U.S. farmworkers” who earned below the new rates, from September 2 until new rates are published. The same notice says “no such payment obligation exists at this time.”
Who is covered: employers with certifications still valid on September 2, pending applications, and new filings until the new method is issued.
What is still open: whether back pay is actually required will be decided by the judge after DOL releases its revised method. DOL could appeal; none had been announced when Fisher Phillips published its analysis.

For scale: when the 2025 rule came out, UC Davis’s Rural Migration News estimated it would lower the average AEWR from $17.35 to $13.38 an hour, a drop of $3.97, or about 23%. The Packer reported a projected $2.4 billion in first-year savings for employers. That is the gap now in question.

Why it matters to your P&L and your cash

Labor is the biggest line on a specialty crop farm. USDA’s Economic Research Service found labor was 38 cents of every dollar of cash expenses on specialty crop farms in 2022, compared with about 13% for all U.S. farms. Small per-hour changes swing big dollars.

Back pay here is a contingent liability. It is not owed today, and it may never be. But if it is, it lands after the season, when cash is usually thinnest, and it covers weeks you have already paid for. The worst outcome is not owing money. It is owing money you never planned for.

Here is a simple illustration. Take a crew of 40 workers averaging 50 hours a week, or 2,000 worker-hours a week. If the new rate lands above what you pay today, this is how the exposure builds:

Gap per hour	Per week	Sept 2 to Sept 28	If it runs 13 weeks	If it runs 26 weeks
$1	$2,000	$7,429	$26,000	$52,000
$2	$4,000	$14,857	$52,000	$104,000
$4	$8,000	$29,714	$104,000	$208,000

Illustration only, not an estimate of what any grower will owe. Exposure only builds on hours actually worked in covered jobs, and your gap may be zero if you already pay above wherever the new rate lands.

Why show a $4 row? Because the estimated average drop under the 2025 rule was close to $4. If the new method lands near the old levels, gaps that size are possible for some jobs. Possible, not predicted.

The bigger picture: labor cost is now a range, not a number

Fisher Phillips, the employment law firm, told clients to expect that a fourth version of the H-2A wage rules may emerge within months. Whatever you think of any one version, the pattern is the point. For H-2A employers, the hourly cost of labor is no longer a fixed input you set in January. It is a range that can move mid-season and reach backward.

That changes how a well-run operation should budget. Growers who plan on one wage rate will get surprised. Growers who carry a low, middle and high case, and hold a reserve against the middle one, will not. It also changes the conversation with your lender. An unquantified liability sitting in the middle of a renewal is exactly the kind of question a credit officer asks about. Walking in with your own number, and the records behind it, puts you in control of that conversation.

How to check your own exposure this week

Pull hours by crew and job since September 2 for every H-2A worker and every U.S. worker in corresponding employment. Western Growers advises preserving payroll, time tracking, job classification and job-duty records, since they may be needed for any wage adjustment.
Update worker contact records. DOL’s notice asks employers to keep names, permanent addresses, Social Security Numbers where issued, I-94 numbers, email addresses and phone numbers current, so workers can be reached if payments are ordered.
Flag multi-duty jobs. The court took issue with how jobs spanning several occupations were assigned one rate, so how you classify those workers may matter.
Run three cases on your own hours using the table above as a template, and put the middle case in your cash plan as a reserve line.
If you use a farm labor contractor, ask them directly how they are tracking the back pay period and whether any adjustment could show up on future invoices.
Talk to your ag employment attorney before changing how you pay anyone.

Where Thombar fits. Most of the work above is pulling and cleaning labor data. Thombar already tracks labor cost by crew and by block, reads every line of your farm labor contractor invoices and catches missing or misrecorded hours, and shows your cash position against the gap to next season. So when new rates land, your hours are already organized. You can also ask in plain English, “What would a $2 an hour gap cost me since September 2?” and get the answer from your own numbers.

Book a demo and see your labor numbers

This post is general information, not legal advice. H-2A rules are changing quickly; check with your attorney and the DOL sources below for the latest.

Sources

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What happened

August 26: In United Farm Workers v. DOL, the U.S. District Court for the Eastern District of California found the Adverse Effect Wage Rate (AEWR) method in DOL’s October 2025 interim final rule unlawful. The court called several pieces “arbitrary and capricious,” including the two-tier wage structure, the housing adjustment, the switch to OEWS wage data, and assigning a single rate to multi-duty jobs. It also found DOL skipped notice and comment for most of the changes.

Current rates stay, for now. The court left today’s AEWRs in effect while DOL writes a new method. There is no hard deadline, only an order to act “promptly.”

September 2: DOL’s Office of Foreign Labor Certification told employers they “may be required to make wage adjustment payments to qualifying H-2A workers and U.S. farmworkers” who earned below the new rates, from September 2 until new rates are published. The same notice says “no such payment obligation exists at this time.”

Who is covered: employers with certifications still valid on September 2, pending applications, and new filings until the new method is issued.

What is still open: whether back pay is actually required will be decided by the judge after DOL releases its revised method. DOL could appeal; none had been announced when Fisher Phillips published its analysis.

Why it matters to your P&L and your cash

Here is a simple illustration. Take a crew of 40 workers averaging 50 hours a week, or 2,000 worker-hours a week. If the new rate lands above what you pay today, this is how the exposure builds:

Gap per hour	Per week	Sept 2 to Sept 28	If it runs 13 weeks	If it runs 26 weeks
$1	$2,000	$7,429	$26,000	$52,000
$2	$4,000	$14,857	$52,000	$104,000
$4	$8,000	$29,714	$104,000	$208,000

The bigger picture: labor cost is now a range, not a number

How to check your own exposure this week

Pull hours by crew and job since September 2 for every H-2A worker and every U.S. worker in corresponding employment. Western Growers advises preserving payroll, time tracking, job classification and job-duty records, since they may be needed for any wage adjustment.

Update worker contact records. DOL’s notice asks employers to keep names, permanent addresses, Social Security Numbers where issued, I-94 numbers, email addresses and phone numbers current, so workers can be reached if payments are ordered.

Flag multi-duty jobs. The court took issue with how jobs spanning several occupations were assigned one rate, so how you classify those workers may matter.

Run three cases on your own hours using the table above as a template, and put the middle case in your cash plan as a reserve line.

If you use a farm labor contractor, ask them directly how they are tracking the back pay period and whether any adjustment could show up on future invoices.

Talk to your ag employment attorney before changing how you pay anyone.

This post is general information, not legal advice. H-2A rules are changing quickly; check with your attorney and the DOL sources below for the latest.

Sources

The H-2A back pay clock started September 2. Is it in your cash plan?

What happened

Why it matters to your P&L and your cash

The bigger picture: labor cost is now a range, not a number

How to check your own exposure this week

Sources

Ready to grow with Thombar?

The H-2A back pay clock started September 2. Is it in your cash plan?

What happened

Why it matters to your P&L and your cash

The bigger picture: labor cost is now a range, not a number

How to check your own exposure this week

Sources

Ready to grow with Thombar?