Legislative Update: Minimum Wage Increase for Agricultural Workers (AB 2646)
A United Farm Workers-sponsored measure, Assembly Bill (AB) 2646, has just been signed by California’s Governor establishing the minimum hourly wage for an approved agricultural employee and corresponding employee, as defined, to be $19.75 per hour, effective January 1, 2027. This bill also requires, beginning on January 1, 2027, and the 1st of each year thereafter, that the minimum wage be adjusted by an amount equal to the cost-of living adjustment (COLA) for social security benefits for that year as published by the Social Security Administration based on changes in the United States Consumer Price Index (CPI), as specified.
Let’s take a closer look:
How does AB 2646 define “approved agricultural employee”? This term refers to an employee engaged in agriculture who is a resident outside of the state and is permitted to work in the state on a temporary or seasonal basis through an application process where the Labor and Workforce Development Agency or the Employment Development Department has approved, in part or in whole, an application or job order to hire agricultural workers from outside of the state on a temporary or seasonal basis.
What is a “corresponding employee”? This refers to an employee engaged in agriculture who is a resident of the state and who performs the same, or substantially similar, work during the same time period as an approved agricultural employee employed by the same employer in the same county.
According to the sponsor of the measure, United Farm Workers:
By establishing a state $19.75 wage floor with annual cost-of-living adjustments tied to the Social Security Administration’s Consumer Price Index, the bill safeguards vulnerable California farm workers against deepening wage depression in the middle of escalating prices for food and basic necessities. Under Governor Newsom’s administration, California has established a precedent of industry-specific wage standards that address the unique vulnerabilities of specific and marginalized workforces, including in fast-food and healthcare. California’s agricultural sector is a cornerstone of the state’s economy, yet the workers who labor in our fields often face significant economic hardship. […] By setting a minimum hourly rate of $19.75 for state “approved agricultural employees” and “corresponding employees” beginning January 1, 2027, with annual cost-of-living adjustments, AB 2646 takes a step toward fair compensation for workers that feed us all. The inclusion of “corresponding employees” performing the same or substantially similar work and employed for the same employer in the same county, protects farm workers from unequal treatment for the same work.”
On the other side, an alliance of agricultural associations and employers, including the Western Growers Association, argued in opposition:
The proposed wage floor of $19.75 beginning January 1, 2027, followed by automatic annual cost of living adjustments, would impose significant new costs on California farms that already operate on extremely thin margins. Nearly 98 percent of California farms are family-owned operations, many of which have been struggling to absorb rising labor, regulatory, water, and energy costs. Imposing an additional sector specific wage mandate will make it even harder for these businesses to remain competitive with producers in other states and countries, maintain production, and preserve jobs in rural communities. The domestic agricultural workforce has steadily declined, and growers increasingly rely on the H-2A program to maintain stable food production. The H 2A program is not designed or intended to replace the domestic workforce, it offers temporary assistance in filling labor gaps that exist at varying levels each year. Today, more than 350,000 H-2A workers are employed nationwide each year, reflecting the growing gap between available domestic labor and the workforce needed to harvest crops. Policies that make it more difficult or costly to use that program risk accelerating the loss of agricultural production in California.”
It appears the bill may have been prompted by recent changes from the U.S. Department of Labor, which altered the Adverse Effect Wage Rate (AEWR) calculation resulting in lowering California's H-2A wages back down to the baseline state minimum. AB 2646 effectively bypasses federal adjustments by cementing the higher 2024 AEWR rate ($19.75) as a permanent California state statutory floor.
Key Takeaway: This is for H2A employees in agriculture and corresponding domestic workers. This law is preempted by federal law and will be immediately challenged in court. Until then, we are burdened with complying with this new law.
If you are unsure whether this minimum wage increase applies to your workplace, give Rosasco Law Group a call. Employers can expect strict oversight from the California Labor Commissioner. Payroll and time-tracking audits must be carefully maintained to prove compliance across both guest and domestic worker classifications. We can help you navigate your way through this and the many other new measures signed by the Governor this year that may affect your business.
