What is 'Agricultural' Anyway: A Closer Look at the H-2A and H-2B Loophole.

• Author: Marin, Joseph

1. BACKGROUND INTO U.S. AGRICULTURAL LABOR 557 A. The H-2A Visa 558 B. The H-2B Visa: Its Similarities & Differences 559 C. So What's The Problem? 560 D. A Closer Look at Where We Are 560 1. The "CAFOBoom" 560 2. Who is Going to Build the CAFOs? 561 3. Economic Impact 562 II. ANALYSIS 563 A. The Definition of Agricultural Labor 563 1. The "On the Farm"Exception 564 2. What is Production? 564 B. Workers vs. Employees 565 C. The Employers & Economics 566 D. The Department of Labor's Database 567 Ill. RECOMMENDATION 568 A. Equally Imposing Restrictions and Caps 569 B. The Problems with the AEWR and Fixing the Prevailing 569 Local Wages Calculation C. Ending Both H-2A and H-2B Classification and Creating a 570 Path to Temporary Residency IV. CONCLUSION 571 I. BACKGROUND INTO U.S. AGRICULTURAL LABOR

   In October 2009, the United States experienced an unemployment rate of ten percent--the highest percentage since September 1982. (1) It would seem paradoxically difficult for the agricultural community to claim that the united States was also experiencing a labor shortage. However, this was a reality for the agricultural industry. (2) In times of stubbornly high unemployment, as well as in times of low unemployment, the United States agricultural labor force has relied on foreign nationals to do the work, namely through the H-2A visa. (3) The H-2A visa program provides an alternative to U.S. employers to hire foreign nationals to fill labor shortages. (4) The H-2A visa distinction, however, did not originate on its own. The classification was established in 1986 after the Immigration Reform and Control Act (IRCA) abolished the broad-sweeping H-2 category and created two new sub-classifications: H-2A and H-2B visas. (5) Currently, the Department of Labor (DOL) and State Workforce Agencies (commonly known as "SWA") enforce and oversee both visa programs. (6)

   1. The H-2A Visa

      The new H-2A visa category was purposely designed to provide a labor solution to those employers in the agricultural business. (7) Section 218 of the Immigration and Nationality Act (INA) allows for the admission of temporary foreign workers under the H2A visa program. (8) This Section outlines the requirements that the employer must satisfy to receive labor assistance. Today, agricultural employers who satisfy these certain requirements (9) can hire seasonal foreign workers to perform services. First, the employer must show an attempt to find U.S. workers to fill the jobs. (10) Employers can accomplish this by posting the job opening online or through a local newspaper. (11) If the employer finds that it cannot satisfy its shortage, the employer can then petition to the U.S. Citizenship and Immigration Services (USCIS) to seek foreign aid. (12) Upon approval, the employer will then notify a licensed Farm Labor Contractor (FLC), and the FLC will recruit viable visa recipients to fill this demand. (13) The visa workers will then be hired by the employer and assigned to a specific work location. On average, the workers are expected to work 30-40 hours per week and their compensation will depend heavily on the Adverse Effect Wage Rate (AEWR). (14) The AEWR is an economic calculation that finds an appropriate wage that will not depress wages in a specific region. For example, the federal minimum wage for H-2A workers is $11.46 per hour, but in Iowa and Illinois, workers can expect to get paid around $13 per hour due to the AEWR calculation. (15) Its calculation is similar to a minimum wage. Overall, it is unlikely to find someone making over $14 per hour as an H2A worker in the United States. (16) Ultimately, the H-2A workers will provide services such as the production and harvesting of crops, as well as any service that is "agricultural" under the INA. (17)

   2. The H-2B Visa: Its Similarities & Differences

      Alternatively, some employers opt for the H-2B visa to solve their labor needs. The program is similar to the H-2A visa program, though several factors make it importantly different. First, the H-2B visa is designed to serve those employers that are "nonagricultural," (18) e.g., construction, landscapers, hotels, and amusement parks. (19)

      Secondly, the H-2B application is approved more stringently. For example, as of 2018, the H-2B visa is statutorily capped at 66,000 workers, limiting the amount the government may issue. (20) This is in contrast with the H-2A visa, which is essentially unlimited. Furthermore, the demand for H-2B visas has grown exponentially over the years. (21) its issuance is similar to a lottery system. (22) Businesses fight for foreign workers and intense competition follows. Even the United States' highest elected official, President Donald J. Trump, has used the H-2B visa to his benefit. (23)

      Lastly, the H-2B visa is more expensive to employers. Although the DOL requires pay to reflect its adverse wage effects, H-2B wage is primarily determined by the "highest prevailing wage" for that locality. In other words, if a worker were to work in construction in Illinois or Iowa under the H-2B visa, his or her pay would reflect the prevailing hourly wage of $20 to $30 for construction workers. (24) To that end, the H-2B visa also requires employers to pay their workers overtime, social security, and Medicaid, all of which are not required under the H-2A visa. (25)

   3. So What's The Problem?

      The question then becomes: what happens when the work demanded is nonagricultural (construction), but its purpose is to further agricultural industry? Or phrased differently, what is "agricultural" anyways?

   4. A Closer Look at Where We Are

      As of late, there is a growing trend in the farming industry for employers to use H-2A workers to build Confined Animal Feeding Operations (CAFOs). (26) CAFO's, which are usually hog confinements, are typically constructed and developed by farming construction companies. (27) These confinements require construction laborers to "'layout building', 'level earth', 'tie-rebar,'" and "position aluminum wall frames," (28) all requiring some basic knowledge of construction.

      1. The "CAFOBoom"

         The exponential increase in H-2A workers being employed to build CAFOs is largely in response to the so-called "CAFO Boom" which is being experienced throughout the United States agricultural community, especially in Iowa, Illinois, and Minnesota. (29) The "boom" is due to the increasing demand for slaughtered hogs throughout China and Hong Kong. In 2016, pork exports to China and Hong Kong reached a milestone and totaled one billion dollars. (30) According to the North American Meat Institute, not only have exports increased, but so have profits. (31) Some estimates have claimed "between 2015 and 2016, the profits pork packers earned per head of hog almost doubled." (32) And with an opportunity to capitalize on new profits, it is unsurprising to find the number of CAFOs in the United States having reached approximately 20,000. (33) This is a 7.6% increase in the last seven years. (34) Iowa, being the biggest contributor to this increase, has more than quadrupled its CAFO number since the early 2000s. (35)

         As a relentless appetite for pork continues abroad and the opportunity for hog producers to seize profits grows, the agricultural market is clearly beginning to rethink its investments.

      2. Who is Going to Build the CAFOs?

         The idea of using H-2A workers for cAFo development has recently become an attractive alternative for many employers. (36) Absent any legal ramifications, it appears advantageous for hog producers to explore this option. Take, for example, Alewelt Concrete Inc. (Alewelt), a concrete contractor located in Hardin County, Iowa. Alewelt, despite being a construction company, made it on the DOL's list for the top H-2A employers in the country. (37) In other words, one of the biggest recipients of this "agricultural visa" is a construction company. In 2016, Alewelt received 1343 workers under the agricultural H-2A visa, with many workers being assigned to work on CAFOs. (38) Needless to say, Alewelt is not the only one of its kind. A brief search on the DOL's Labor Certification database provides a number of companies with "construction" or "concrete" in their name as recipients of the H-2A visa. (39)

         Whether construction on a farm counts as "agricultural" for H-2A purposes has largely gone unaddressed by the DOL. (40) The DOL's inaction to solve this issue has also spurred concern among those construction companies who have not used H-2A workers to their advantage. Of course, this is not to suggest the DOL is unaware of this ongoing problem. In fact, in 2008, before making the DOL's top H-2A employer list, Alewelt attempted to hire workers via the H-2A visa to do concrete work, but the DOL responded by refusing to authorize the job order. (41) Two years later, in frustration with the DOL, Alewelt switched its workers' status from H-2B to H-2A. (42) That is, Alewelt hired workers under the H-2B visa, but paid them the H-2A rate. (43) The DOL discovered this discrepancy and all parties involved decided to settle and sign a non-disclosure agreement. (44) More recently, however, the DOL has received approximately ten cases involving this issue, each of which has been settled outside of court. (45) Most companies, without hesitation, agree to a settlement in fear that if a court decided this issue, it would likely render this scheme as an abuse of the H-2A visa. One attorney asserting, "[e]ven if it doesn't violate the letter of the law, it at least violates the spirit." (46)

      3. Economic Impact

         Both the H-2A and H-2B visa programs offer benefits and detriments to the economy. Countless studies have shown that immigrants working in the United States help the agricultural economy. (47) A closer analysis of the economic impact is beyond this discussion; however, that is not to suggest that some regional economies go unaffected by this program. The construction industry, for example, has experienced a strong increase in...