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Comments submitted on Apr. 14, 2008 regarding H-2A

Published Apr. 18, 2008

April 14, 2008

Mr. Thomas Dowd
Administrator
Office of Policy Development and Research
Employment and Training Administration
U.S. Department of Labor
200 Constitution Avenue, NW
Room N–5641
Washington, DC 20210.

RE:  Regulatory Information Number 1205-AB55

Dear Mr. Dowd:

The Ohio Farm Bureau Federation (OFBF) is the largest general farm organization in the state of Ohio with members in all of Ohio’s 88 counties.  Our members produce virtually every kind of agricultural commodity and as a result, OFBF is very interested in the nation’s policy regarding agricultural guest worker programs. 

The Ohio Produce Growers & Marketers Association (OPGMA) is an organization of produce growers and marketers whose goal is to produce exceptional quality crops, for consumers and processors, utilizing environmentally friendly practices. OPGMA provides educational opportunities to businesses, families, and employees associated with the production and marketing of Ohio's fresh produce.

We submit this statement in response to the department’s solicitation for comments on the above-referenced rulemaking, which would revise the existing regulations that govern the H-2A program. We thank you for this opportunity to comment.

The difficulties and challenges that growers in Ohio have faced with using the H-2A program are numerous.  Many small- and medium-sized operations in the state with short growing seasons face particular challenges that the existing program cannot meet.  While these challenges are numerous and cannot be remedied by one rule, we commend the department for undertaking this effort to improve the program.  At the same time, we must caution the department, as it embarks on this effort, not to encumber the program further and make it more expensive or harder to use.  Nor should the program be implemented with a one-size-fits-all approach.  We elaborate below on specific aspects of the proposed rule that we believe may prove problematic for potential users of the program.  The H-2A program must be made more responsive to growers’ needs if it is to succeed as Congress intended. 

There is a major concern among Ohio growers that an expensive, bureaucratic or inflexible program will impede, if not make impossible, their ability to meet challenges in the marketplace.  As labor challenges increase, some of these growers, who may have smaller farms or produce crops with shorter growing seasons or have only relatively brief demand for hired labor, will be forced fundamentally to alter their operations or go out of business.  The fundamental purpose of H-2A, we emphasize, is to help keep farmers in business, not to force them out of business.  A critical measure of the department’s success in effecting a revitalized, streamlined, reformed H-2A program will be its ability to meet the needs of all components of agriculture – farms that are small as well as large; extensive operations that utilize workers for many months and those that need workers for only a few days or a few weeks; and growers in all regions of the country. 

The American Farm Bureau Federation estimates that between $5 and $9 billion a year of U.S. agricultural production is at risk if our labor needs are not met.  To this regard, we appreciate the department recognizing the reality that there is “a shortage of available U.S. workers,” and while farmers are engaged in a continual search to employ domestic labor, that labor is simply not a “viable” alternative. With the advent of new policies such as the proposed “no-match” rule, the need for a functional H-2A program is greater and growing more acute.   If we are to shore up U.S. and Ohio agriculture’s health and not jeopardize billions of dollars of farm production – much of which occurs in rural areas and helps to sustain rural communities and their economies – it is essential that the United States have a stable, legal supply of labor.

Detailed Comments

1.  Training and Educational Outreach Initiatives
In its preamble describing the new, attestation-based process, the department invites comment on a timeline for its anticipated training and educational outreach initiatives.  We recommend that, once the final rule is promulgated and published, the department should undertake a vigorous and extensive outreach and education program.  Using H-2A for many growers will be a new experience, entailing new and different obligations.  It will be critical for the department to do extensive, immediate and thoughtful outreach to growers who want to utilize the program.  As the state’s largest general farm organization with a network in every county, Farm Bureau is prepared to work with the department in facilitating such an educational, outreach campaign.  Train-the-trainer type programs would be welcomed and regional training offered as needed.

The department should provide counseling, advice and practical guidance to growers who will undoubtedly face legal threats from “worker advocates” on how they can utilize the program successfully while avoiding such legal snares.  The department should also provide ample and thorough education to growers on the possibility of random audits and their obligations under the regulations to assure that they are in compliance with all program functions.  Training could also include methods for estimating farm labor needs for those new to the program and web-based training opportunities would be welcome. 

2. Wage Rates

We appreciate the department’s proposals to deal with H-2A wage rate issues, and we offer some additional suggestions.  In the proposed rule, the department proposes changing how it calculates the Adverse Effect Wage Rate (AEWR).  Any changes to AWER should strengthen the ability of the H-2A program to support US agriculture while assisting farmers in filling jobs for which there are no American workers available.  The existing process for calculating the AEWR is based on a compromise that has outlived its usefulness.  The current process depends on an annual survey of farmers conducted by the United State Department of Agriculture’s (USDA) National Agricultural Statistics Service (NASS); from this survey is derived an average wage paid to all farm workers across a few broad geographical areas (15) for a few composite occupational categories (2). 

Any new wage rate system should provide a better estimate of what the reference wage should be and link the AEWR more closely to market conditions where H-2A hiring will take place.  One option, the use of the Department of Labor’s Occupational Employment Survey (OES) agricultural wage information, which is based on data collected from farm labor suppliers, may reflect an improved method per the current system, but we would also support grower wage information being included as part of OES data collection.

We believe that the underlying principle shaping implementation of a new wage rate system should be keeping the AEWR tied as closely as possible to market fundamentals.  This entails:
specifying AEWR’s for all the geographic areas surveyed (over 500) consistent with accepted statistical quality controls and the confidentiality rights of the individuals surveyed; drawing on survey detail to expand the number of farm occupations to possibly six categories (compared to the one category currently utilized by NASS); drawing directly on the actual survey data to break wages and designate skill levels by geographic area and by occupation; and basing the AEWR on the most reliable data to reflect current market conditions.  

We would also prefer a more simple method for obtaining wage information.  We recommend DOL develop a user-friendly, transparent AEWR website that translates the complex OES regional and occupational information into a simple H-2A wage and skill level format. This is imperative for farmers to make informed decisions and allow the H-2A program to function as efficiently as possible.

It also appears that the department intends to assure that piece rates or productivity standards are determined by local, prevailing market conditions.  We agree with this approach, particularly given the fact that piece rates can vary a great deal given market conditions, the crop in question, the locality or the business decisions of the grower.  With the AEWR derived from OES data, the grower will determine the appropriate wage and skill level for his employees.  Piece rates and productivity standards are not and should not be determined by the certifying officer (CO).  More importantly, it is critical that the CO or the state workforce agency (SWA) not mandate that piece rates and productivity standards be included in the job order.

Once the correct AEWR for the position has been established and approved and the grower attests that he will pay the highest of the Federal or state minimum, the prevailing wage, or the AEWR, the program’s provisions have been met.  The department should state in explicit terms in its rule that a CO or an SWA cannot require that piece rates and productivity standards be included in the job order.  Furthermore, some clarity is needed per a situation when a worker performs piece rate work for a portion of the day and does hourly work the rest of the day.  We want to avoid situations where a higher piece rate is used to establish the hourly rate.

3. 50 percent rule

The department invites comment on the costs and benefits of the 50 percent rule, the merits of retaining or eliminating the rule.  The actual benefits of the 50 percent rule for domestic workers are, to all practical intent, illusory.  We strongly support eliminating the rule entirely.  The current 50 percent rule, while seemingly a provision to protect U.S. workers, is more disruptive to farm operations and a disincentive to program participation rather than a true protection for workers.   It should be abandoned.

4.  Payment of Inbound and Outbound and Subsistence Costs

The department in its NPRM notes that it has retained existing requirements that impose on employers the obligation to advance transportation and subsistence costs to H-2A workers but invites comments on “the costs and benefits to employers and workers of continuing to require employers to pay for the inbound and outbound transportation and subsistence costs of H-2A workers.”  This is a critically important issue to the program.  We strongly urge the Department not to require immediate reimbursement of such costs to workers.  There must be a reasoned, valid balance between the benefits that inure to employers and employees.

“Worker advocates,” whose antipathy for H-2A is well documented, have used creative legal arguments to superimpose on the H-2A program provisions in the Fair Labor Standards Act (FLSA).  Thus, while the department’s regulations would only require such reimbursement when the worker completes 50 percent of the contract period, reinterpreting that provision through the prism of the FLSA has had the effect of requiring employers to advance those costs at the first pay period.  The practical effect of such a practice is to provide a financial incentive to workers who do not wish to complete the contract. 

The department needs to strike a reasoned and balanced approach that reflects reality.  Utilization of H-2A workers is clearly a benefit to the employer but not to the employer alone or even predominantly.  As in any economic relationship, both parties benefit.  The department’s regulations should reflect that fact.  We urge the department not to require employers to advance transportation and subsistence costs to H-2A employees during the employees’ first pay period and support retention of policy for reimbursement after the worker completes 50 percent of the contract period.

We also suggest an option whereby the employer may pay the worker the equivalent of subsistence and ground transportation and allow the worker to apply the payment to airline transportation.

5. Other Sectors of Agriculture that should be Included in H-2A

In the rule, the Department asked “whether there are other businesses that should be similarly included within the definition of agriculture under this program.”  The H-2A program is currently foreclosed to a large component of Ohio agriculture – dairy producers.  Dairy production is a vital part of the Ohio agriculture economy and we strongly support availability of the H-2A program to this industry segment.  Others sectors that should be included are turf grass growers, nurseries engaging in growing and retail, and employers engaging in seasonal food processing.

In addition, a recent DOL audit made a finding against an Ohio grower for violating program regulations in that their H-2A workers were grading apples that had been purchased from another Ohio grower to supplement direct retail sales at their farm market.  Apparently, if H-2A workers grade only apples grown on a particular farm for retail sale directly to the end consumer the requirements state that they be paid straight time for overtime for any work over 40 hours in a week, which would be in effect at the AEWR rate.  In that they graded apples that had been bought to resell to customers, the employer in question then had to pay time and one-half for hours worked over 40 in any one week.  The employer buys additional apples from other growers to supplement their own crop if short because of weather damage or variety shortages.  There may be good reason for such a restrictive regulation where the workers are, in fact, not actual "farm" workers and are strictly working in a "packing" business that is not selling to the end consumer, but this is a different case in that they are doing a continuum of farm work from actual production to market. 

We support a resolution to this problem and suggest that perhaps a modification of the definition of agriculture or the type of work allowed under H-2A be changed to allow product that is moving from on-farm production directly to the end consumer, be included as permissible work allowed by H2A workers, and possibly including wording that it is permissible when the crop is purchased by a farm because of weather damage to the farms’ crops in a particular year.

6. Record Keeping Requirements

In its NPRM, the department has proposed that growers retain documents for five years.  We question that such a long period of time is necessary per the needs of the program.  We believe a three-year requirement would be more than sufficient to assure accountability by those who utilize the program.

Also, we urge the department to revise its proposal to eliminate the requirement that growers who are not certified for participation are required to maintain documents.  The department would mandate a five-year requirement – even for growers not approved for program participation.  As employers, growers already must retain other documents for government purposes (for Social Security, IRS, accounting and other reasons).  There is no justification – and the department offers none – for a document retention policy that requires growers who have not been certified for participation in the program to maintain records at all (much less for five years).  We believe that those not participating in the program should not bear the burden of retaining documentation and urge the department to remove this requirement.

7. State Workforce Agency Referral

It is a common practice for SWAs to refer to employers individuals who have indicated a willingness to accept H-2A employment.  The reality is that such a process rarely produces any significant component of a grower’s labor needs, much less the complete set of workers the grower requested.  When the grower seeks in fact to interview, assess and hire the referrals, however, it is all too often the case that the referrals either fail to show up, do not accept employment or, after accepting it, abandon employment after a brief period.  There must be a recognition that the referral system suffers to a large degree from the same symptoms as the agricultural labor sector as a whole: domestic labor is in critically short supply and virtually unobtainable. 

In its proposed revision, the department proposes placing in regulation the requirement, recently enunciated in its Training and Employment Guidance Letter 11-07 (November 14, 2007), that SWAs must determine the employment eligibility of individuals before referring such individuals to H-2A applicants as part of the recruitment process.  Fundamental to the purposes of the H-2A program is to ensure that the rights of eligible U.S. workers to employment be protected.  That purpose is undermined when government agencies, through lax or negligent attention to their responsibilities, refer individuals who are not eligible for employment in the United States.  We support the inclusion of this policy in the department’s regulations.

8. Housing Inspections and Vouchers

The department in its proposal has proposed that an “employer may satisfy the requirement to provide housing by furnishing the worker a housing voucher.”  We support the idea of vouchers, but vouchers should not be mandatory, and instead an option available to the employer, not the employee (i.e. a employee cannot demand a voucher if suitable housing is available).  We propose some options for the employee.  First, an employee could accept provided housing, or accept a voucher (if offered by employer) or decline both and make other arrangements.  If the employee declines housing and the voucher, the employer should be relieved of their obligation to provide housing. 

The timing of housing inspections is also an important issue.  One Ohio grower has had issues when state housing inspectors performed their inspections during winter months in housing that is not used or suitable for winter housing.  Inspections should occur in regard to the seasons when the housing is being used.     

9.  Proposed Fee Increases
Another matter that is critical for the department to correct before it publishes its final rule is the associated fee structure.  In the rule as proposed, the department has adopted a set of fees that represents an enormous increase in the costs of the program to H-2A users; this increase will be crippling for some growers and an enormous burden for others.  It must be significantly modified.
   
For small fruit and vegetable growers who might utilize workers for only a short period, such a fee structure is prohibitive.  Currently available data indicate that 10 H-2A workers would cost over $10,000 in application fees alone.  On top of such fees, there will be border crossing fees, transportation and per diem fees, housing fees and other costs.  The cost for a small grower could rise to almost $20,000 dollars before any revenue is gained through harvest of the crop.  Such costs rise exponentially for larger growers, who may see their fee costs rise well into six figures before they achieve any profit from the investment.  We recommend no more than $200 per application fee as opposed to the current $100 per application; and no more than $20 per worker as opposed to the current $10 per worker. 

10. Additional Comments and Conclusion

Advertising Requirements – Sunday ads can be prohibitively expensive to purchase and yield little result.  We recommend that advertising requirements be maintained at the current rules with no increase in frequency or amount of information required.  We further propose that the employer be allowed to simply advertise the job by referencing the job order on file with the SWA and not be required to include all the detailed information contained in the department’s proposal. 

Rehiring Workers from Prior Years – We support rule modifications that would allow employers the ability to deny work to employees hired in previous years who demonstrated an unsatisfactory work history/ethic even if the worker was not terminated for cause. 

Processing Time – We would like to note that both DOL and DHS have historically been unable to meet many of their own time requirements for processing guest worker program information, yet penalize farmers for missing deadlines or failing to meet all regulatory requirements. Any final rule package should include new guarantees that the departments will meet their own deadlines and if they do not meet processing time frames imposed by rule, that applications should be deemed approved and certified without further action by the applicant.  In addition, perhaps if the departments do not meet their deadlines, some refund of fees should be given back to the growers.

Visa Approval Process - We believe the visa approval process is too lengthy and too subject to delays. We suggest a rule requiring approval of visas in a specified time period, such as 45 days.

A viable guest worker program that works for both agriculture employers and employees is critical in maintaining many important segments of Ohio agriculture.  To make such programs work, the Department of Labor and the Department of Homeland Security must work together to make these programs work efficiently and with minimum burden to those who use them.  Communication from both agencies must be coordinated and not competing.  Overall, growers want assurances from both agencies that implementation and enforcement of these critical programs will be top priority in the coming years.  Moreover, as growers use these programs and comply with all requirements to the best of the knowledge, some assurance of safe harbor should be granted to employers.

We appreciate this opportunity to submit comments for this important proceeding.  If you have questions, please contact Adam Sharp at (614) 306-7469.

Sincerely,

John C. Fisher, Executive Vice President   
Ohio Farm Bureau Federation

Bob Jones, President   
Ohio Produce Growers & Marketers Association

Cpy:      Senator George Voinovich
    Senator Sherrod Brown
    Rep. John Boehner
    Rep. Zack Space
    Rep. Jean Schmidt
    Rep. Bob Latta



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