MSU Extension Farm Management

Michigan’s agricultural employers have been expanding their use of the H-2A visa temporary agricultural guest worker program to supplement a limited supply of domestic seasonal labor. The program acts as a sort of labor insurance when domestic workers are not available, but employers must meet detailed wage, housing, transportation, recruitment and recordkeeping requirements.

Before October 2, 2025, the wage benchmark for most Michigan non-range H-2A jobs was a single statewide Adverse Effect Wage Rate (AEWR) based on the US Department of Agriculture’s Farm Labor Survey. The U.S. Department of Labor's (DOL) October 2, 2025 interim final rule replaced that approach with wage rates based on Bureau of Labor Statistics Occupational Employment and Wage Statistics (OEWS) data. The rule introduced Skill Level I and Skill Level II rates and a downward Adverse Compensation Adjustment (ACA) for H-2A workers who receive employer-provided housing at no cost.

On August 3, 2026, the DOL updated the AEWRs based on the newly released OEWS data. Pending any legal challenges, the new wage schedule will remain in effect until the summer of 2027. This article compares the AEWRs before and after August 3, 2026, to highlight the differences in labor costs for H-2A employers under the new AEWR schedule.

Background

Under the new DOL regulations, there are two wage schedules for most farm occupations. The Skill Level I (entry-level) wage applies when an employer requires less than three months of related experience to fill the position. The Skill Level II (experienced) wage applies when the job requires three months or more of related experience.

The assigned wage also depends on the job's duties and occupational classification. Most jobs fall under a broad set of Standard Occupational Classification (SOC) codes commonly referred to as the “Big Five” occupations and are subject to a single AEWR for each skill level (a total of two AEWRs for each state). Work involving trucking, mechanical repair, supervision, or other specialized functions may fall under a different SOC code, and thus a different (and usually higher) AEWR. Under the new rule, the DOL identifies the applicable SOC code by determining the job classification that is performed on the majority of a contract’s workdays. For example, if the contract is for 100 days of work, and an employee is expected to drive a truck for 51 days and pick fruit for 49 days, the job will be classified as a trucking job and will be paid the wage of a truck driver. Importantly, when the applicable AEWR falls below the state minimum wage, employers are obligated to pay at least the minimum wage. On January 1, 2027, Michigan’s minimum wage is scheduled to increase to $15.00.

Wage comparison

Table 1 compares the statewide field and livestock worker AEWRs before and after the August 3, 2026 AEWR updates. Prior to August 3, 2026, the Skill Level I AEWR was $13.78 while the ACA was $1.32, making the ACA-adjusted AEWR $12.46. However, the state’s minimum wage was $13.73, which was the binding wage H-2A employers had to pay for Skill Level I workers.  After the August 3rd AEWR updates, the Skill Level I wage increased to $14.45, while the ACA increased to $1.39, making the ACA-adjusted AEWR $13.06, still below the applicable state minimum wage of $13.73. On January 1, 2027, Michigan’s minimum wage will increase to $15.00, so Skill Level I employees will see a $1.27 increase in their hourly wage starting in 2027.

For Skill Level II employees, the AEWR increased from $17.47 to $17.64 on August 3, 2026, making the ACA-adjusted AEWRs rise from $16.15 to $16.25.  Since these wages are above the state’s minimum wage for 2026 and 2027, these wages are binding for Skill Level II employees until the summer of 2027.

Table 1. Applicable AEWRs Prior to and After the August 3, 2026 Changes

Source: U.S. Department of Labor, Office of Foreign Labor Certification statewide AEWR spreadsheets; U.S. Department of Labor, October 2, 2025 Interim Final Rule.

* At the time of this publication, the date for the release of summer 2027 AEWRs has not been determined by the US Department of Labor.

Changes in labor costs

Michigan’s H-2A employees work on contracts that last about six months (or roughly 1000 hours of work). For Skill Level I workers, labor costs will not increase until the state minimum wage increases to $15.00 on January 1, 2027. After that, employers can expect to pay an average Skill Level I worker about $1,270 more relative to 2026 for a 1,000-hour contract. The minimum wage before and after January 1, 2027, does not affect Skill Level II employees, so the August update will only add about $100 for every 1,000 hours of Skill Level II work.

Important compliance considerations

It is important to note that H-2A employers must pay the highest applicable wage rate. The required wage is not automatically the ACA-adjusted AEWR, as that can fall below other statutory minimums. Employers must pay the highest of the ACA-adjusted AEWR, the applicable prevailing wage (as determined by a state workforce agency), the collective bargaining rate, or the applicable state or federal minimum wage.

Additionally, employers should only apply the ACA when permitted to do so. The downward ACA adjustment only applies to qualifying H-2A workers who receive housing at no cost and cannot be deducted from domestic worker wages even if they work for an H-2A employer.

Further, employers should classify their job orders carefully. Experience requirements, driving duties, equipment operation, supervision, maintenance and other duties can affect the skill level or SOC classification and therefore the required wage.

Employers should also budget beyond their hourly wage bills. H-2A employers remain responsible for applicable housing, transportation, recruitment, visa-related, and other program obligations. The ACA does not eliminate those requirements.

Finally, employers should confirm the effective rate when work is performed. Wage obligations can change during a contract period, as we explain above by the August 3, 2026, mid-season change. Employers should review their job orders and current US Department of Labor guidance with qualified advisers.

The August 2026 AEWR update brings relatively modest immediate wage changes for Michigan H-2A employers, but the effects differ substantially by skill level. For Skill Level I workers, Michigan’s $13.73 minimum wage remains the binding wage through the end of 2026 because it exceeds the ACA-adjusted AEWR of $13.06. The more significant change will occur on January 1, 2027, when the state minimum wage increases to $15.00, raising labor costs by approximately $1,270 for a worker employed for 1,000 hours of Skill Level I work. For Skill Level II workers, the August update increased the binding ACA-adjusted AEWR from $16.15 to $16.25, adding approximately $100 in wage costs for every 1,000 hours worked.

These changes also highlight the importance of determining the applicable H-2A wage on a job-by-job basis. Employers should consider the worker’s skill level and occupational classification, whether the ACA applies, and whether another wage requirement exceeds the adjusted AEWR. Because wage obligations can change during an H-2A contract, Michigan employers should review their job orders and applicable wage requirements when planning labor costs for the remainder of 2026 and the 2027 production season.

Additional Resources

Adverse Effect Wage Rates and Minimum Wages

https://www.michigan.gov/leo/bureaus-agencies/ber/wage-and-hour/frequently-asked-questions/wage-and-hour/minimum-wage-and-overtime-faq

https://www.dol.gov/agencies/whd/fact-sheets/26f-wage-requirements-H-2A

https://www.federalregister.gov/documents/2025/10/02/2025-19365/adverse-effect-wage-rate-methodology-for-the-temporary-employment-of-h-2a-nonimmigrants-in-non-range

https://flag.dol.gov/wage-data/adverse-effect-wage-rates

Related MSU Extension Articles

https://www.canr.msu.edu/news/michigan-s-h-2a-wage-offers-in-first-half-of-fiscal-year-2026 https://www.canr.msu.edu/news/explaining-the-new-h-2a-wage-rule-for-michigan-growers https://www.canr.msu.edu/news/farm-workforce-modernization-act-and-h-2a-visa

https://www.canr.msu.edu/news/what-are-adverse-effect-wage-rates

https://www.canr.msu.edu/news/an-overview-of-farm-labor-in-michigan