April 17, 2021

Wages are still too low in H-2B occupations: Updated wage rules could ensure labor standards are protected and migrants are paid fairly

6 min read
Key takeaways: The H-2B program’s wage regulations are allowing employers to legally undercut U.S. wage...

Key takeaways:

  • The H-2B program’s wage regulations are allowing employers to legally undercut U.S. wage standards and underpay migrant workers.
  • In all but one of the top 15 H-2B occupations in 2019, the average hourly wage certified nationwide for H-2B workers was lower than the average hourly wage for all workers in the occupation nationwide.
  • One way to fix this would be to require that employers pay H-2B workers at least the highest of the local, state, or national average wage for the occupation. The Biden administration has the legal authority to make these changes, and they should consider doing it quickly in order to protect migrant workers and U.S. wage standards.

Last week, I wrote about how the U.S. Department of Homeland Security (DHS) and the U.S. Department of Labor (DOL) are now considering increasing the number of H-2B visas in response to businesses claiming that there are labor shortages in H-2B industries—a claim that unemployment data reveal is false. A related and essential issue to this discussion is the prevailing wage rules that undergird the H-2B program, which exist for the purpose of establishing a minimum, legally required wage that jobs must be advertised at in the United States when recruiting U.S. workers—a requirement before employers can access the H-2B program—in order to determine if there’s a labor shortage. The purpose of the H-2B prevailing wage requirement is also to safeguard U.S. wage standards in H-2B occupations and protect migrant workers from being legally underpaid through visa regulations.

In most cases, since 2015, the DOL’s H-2B wage methodology has required that employers advertise H-2B jobs to U.S. workers at the local average wage for the specific occupation and pay their H-2B employees that wage—according to data from the DOL’s Occupational Employment Statistics (OES) survey. While at first glance this appears to be a reasonable wage rule, in practice, the available evidence makes clear that the H-2B wage rule is undercutting wage standards at the national level in H-2B occupations and is therefore not consistent with the law establishing the H-2B program.

To illustrate, see Table 1 below, which shows the top 15 H-2B occupations in fiscal year 2019 by Standard Occupational Classification code, according to the number of H-2B jobs certified by DOL. For context, the top 15 H-2B occupations accounted for 84% of all certified H-2B jobs in 2019. The column to the right of the number of certified jobs is the nationwide average hourly wage for all certified H-2B workers in each of the occupations, according to DOL disclosure data. To the right of that are the 2019 average hourly wage rates for all workers in the occupation nationwide, according to DOL’s OES survey, which is used to set H-2B wage rates, making it an apples-to-apples comparison (2019 data were used for H-2B and OES because 2020 OES data are not yet available for comparison). The final two columns show the difference between the average hourly certified H-2B wage and the average hourly OES wage for all workers in the entire country—the dollar amount and in percentage terms. In other words, these numbers reveal the amounts by which certified H-2B wages are undercutting national-level wage standards in H-2B occupations.

Table 1 clearly shows that the H-2B program is allowing employers to legally undercut U.S. wage standards.

While, as noted above, H-2B wages are set at the local level according to each job, we have to instead look at the impact of the H-2B program on the average wages of H-2B occupations at the national level, because the H-2B statute sets a national standard for the protection of U.S. labor standards. The H-2B statute clearly states that H-2B workers can be hired only “if unemployed persons capable of performing such service or labor cannot be found in this country.” In order to determine whether there are “unemployed persons” in the United States capable of doing a job before an employer can hire an H-2B worker, employers should be required to offer at least the local, state, or national average wage for the occupation (whichever is higher), recruit U.S. workers nationwide, and offer to pay for housing and transportation for both U.S. and H-2B workers. But under the H-2B recruitment and wage regulations, that’s never actually been the case.

Table 1

Table 1 shows that in all but one of the top 15 H-2B occupations in fiscal 2019, the average hourly wage certified nationwide for H-2B workers was lower than the OES average hourly wage for all workers in the occupation. The biggest wage differential was found in the cement masons and concrete finishers occupation: The national average hourly wage was just over $8.00 higher than the average wage certified for H-2B workers. The next biggest difference was in the construction laborers occupation, where the national average wage was just over $4.00 higher than the average wage certified for H-2B workers. If, for example, an employer hired an H-2B construction worker to work for 40 hours per week for 36 weeks (approximately nine months) at $4.00 per hour less than the national average wage—due to local wage variations, as the H-2B wage rule allows—the employer would save, and an H-2B worker would be underpaid by, $5,760.

In the top two occupations of landscaping and groundskeeping workers and forest and conservation workers—which combined accounted for over half (51.5%) of all H-2B certified jobs in 2019—the average H-2B wage was $1.57 and $3.61 lower per hour than the national average wage, respectively. Employers in the seafood industry, who every year are the loudest voices calling for an increase in the H-2B cap, collectively paid their H-2B workers $3.04 less per hour than the national average wage in the meat, poultry, and fish cutters and trimmers occupation.

An easy way to fix this so that the H-2B wage rule no longer undercuts existing U.S. wage standards and so that it is consistent with the statute that establishes the program would be to require that employers pay at least the highest of the local, state, or national average wage for the occupation according to the Labor Department’s OES data. DOL could even require a higher wage—for example, the 75th-percentile wage instead of the average—in order to incentivize additional recruitment of U.S. workers. The Biden DOL has the legal authority to make these changes—and given the popularity of the H-2B program among employers, even during times of high unemployment, they should consider doing it quickly in order to protect wage standards in H-2B occupations and ensure that migrant workers in H-2B are not exploited as a lower-cost alternative to hiring unemployed U.S. workers.

There’s an additional element of the current H-2B wage rule that allows employers to undercut wage standards in H-2B: private wage surveys. Employers have the ability, under the current rules, to cherry-pick the data source they like in order to establish the legal minimum wage rates for their H-2B employees through nongovernmental wage surveys that DOL approves. One can rightly assume that employers never go through the trouble of using one of these private wage surveys to increase the minimum wage they’ll pay their H-2B workers—they only use them to lower it. I’ve written about one example in which seafood employers were able to pay their workers $3.00 per hour less than what the local and state average wage for the occupation would have required. In a follow-up blog post, I will take a more systematic look at how H-2B private wage surveys are also undercutting U.S. wage standards and allowing employers to legally underpay migrant workers.

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