By Andi Anderson
Michigan agriculture is undergoing important changes following new H-2A wage rules introduced in October 2025 by the United States Department of Labor. These changes affect how wages are calculated for agricultural workers and are shifting the system toward skill-based pay.
In the past, most farm jobs followed a single wage rate known as the Adverse Effect Wage Rate (AEWR). However, the new system now divides wages into two categories based on skill level. Entry-level workers with less than three months of experience are paid under Skill Level I, while more experienced workers fall under Skill Level II. Wage rates are now based on federal data from the Bureau of Labor Statistics.
The updated system also includes an Adverse Compensation Adjustment (ACA), which allows employers to reduce wages slightly to offset the cost of providing free housing to workers. In Michigan, this adjustment is $1.32 per hour. However, wages must still meet the state or federal minimum wage requirements.
Data from the first half of Fiscal Year 2026 shows clear changes in wage patterns. Out of 8,742 certified H-2A jobs, most employers offered wages lower than the previous 2025 AEWR of $18.15 per hour.
Nearly 73.6 percent of jobs were paid at $13.77 per hour, which is the entry-level wage without adjustment. Only a small number of jobs were offered at higher wage levels.
Higher wages were mainly given to workers in specialized roles such as equipment operation, truck driving, mechanics, and supervision. About 7.4 percent of jobs were paid above the previous AEWR, showing that skilled work remains valuable in agriculture.
The new wage rules have helped farmers reduce labor costs significantly. It is estimated that farm employers spent around $147 million on wages during the first half of FY 2026. If the old wage rate had been used, the cost would have been about $180 million. This means farmers saved approximately $33 million under the new system.
Photo Credit: gettyimages-d-keine
Categories: Michigan, Government & Policy