An under-the-public-radar federal rule change is shrinking pay for migrant farmworkers at the same time a highly debated new state law is going to cut into their overtime pay.
The U.S. Department of Labor has changed the way wages are calculated for H-2A seasonal workers and is allowing employers to pay $2 to $3 less per hour to those workers who receive housing as part of their work contracts. The federal government requires that housing for H-2A workers.
This change championed by the Trump administration will affect the estimated 3,500 H-2A workers who toil in Colorado’s fields and orchards each year.
The Department of Labor isn’t calling this a wage decrease or a pay deduction. The new rule refers to it as a “downward compensation adjustment.” It doesn’t show up as a deduction on paychecks. The paychecks are simply smaller.
“We can’t call it a pay deduction. It’s a housing adjustment to the wage,” said Liz Talbott, who handles the accounting for H-2A workers at Talbott Farms in Palisade.
Whatever the term used to describe the change, this new federal rule means that H-2A farmworkers in Colorado who earned $17.84 per hour last year, will get $15.16 this year.
The change could have dropped wages even further except that Colorado’s minimum wage requirement prevented the housing adjustment from taking a bigger bite out of paychecks. The hourly wage for Colorado farmworkers can’t go below $15.16. In some states without that minimum wage protection, H-2A farmworkers will receive as little as $9 per hour.
The new rule does not require employers to pay less, so some are opting to ignore the Department of Labor rule and to keep wages at the same level as last year.
“We are not changing it,” said Gwen Cameron, who employs 11 H-2A workers in the field crew at her Rancho Durazno orchards in Palisade. “We can still be profitable.”
She said she knows of other farms, including Honey Rock Landing in Dominguez Canyon between Delta and Grand Junction, and Topp Fruits in the North Fork Valley, that have also opted to keep wages at the 2025 level.
News of lower wages delivered just before farmworkers headed north
At Talbott Farms near Palisade where 95% of the workers are employed with H-2A visas, co-owner Bruce Talbott said they will make use of the new “formulation.” He said labor makes up 85% of his cost to produce peaches.
“I think this is good for the industry and good for the workers,” Bruce Talbott said. “These guys feel like they have won the lottery when they come here. They are treated well. They are still quite happy. These guys have no expenses except for food. They send 95% of their wages home.”
He said this season some of those workers will be living in a newly completed 24-unit bunkhouse at Talbotts that can hold 48 workers.
Tuxedo Corn in Montrose County has long prided itself on fair treatment of its workers and is a participant in the national Fair Food Program. It has also opted to pay the lower wage.
“It gives me no pleasure to do that,” said David Harold, who co-owns Tuxedo with his father, John Harold. “We are adjusting everything we can to be legal but reduce our costs.”
Harold insists the new federal rule does not mean he is charging his workers for housing that Tuxedo has long provided at no charge.
“I am not charging for housing,” Harold said. “I am paying the lower rate allowed because I provide housing.”
Harold said he advised his H-2A workers at the end of last year’s season that there might be cutbacks in paychecks this year.
Some migrant farmworkers had no idea about the lower pay until they showed up at the American Consulate in Monterrey, Mexico, said Iriana Medina Roy, the executive director of La Plaza, a resource center for migrant workers in Palisade.
H-2A rules require migrant workers to travel to Monterrey to sign their work contracts and board buses that take them to jobs across the United States. Some reportedly opted to return home when they learned of the lower pay.
“The workers are not happy. But work is work,” Medina Roy said. “For me, it seems not just. It is not fair.”
Cameron said there is still a lot of confusion among workers about the wage adjustment that is part of a byzantine set of tiered pay changes called the Adverse Effect Wage Rate.
The primary purpose of the Adverse Effect Wage Rate is to prevent the employment of foreign workers from negatively impacting the wages and working conditions of U.S. workers.
Calculating wages to fit within that framework includes having to establish pay levels based on different tiers of skill levels and on the fact that domestic workers generally do not receive housing benefits as migrant workers do.
Liz Talbott said she tried to let workers know about the change coming in their paychecks, but for the first group of 50 Talbott’s workers who came to the Monterrey consulate in January and February, there was little information from the Department of Labor to pass on to workers. Growers say they are still sorting through the perplexing rules — an effort that has been slowed and complicated by the recent government shutdown.
“We didn’t receive a lot of guidance so we didn’t have a lot of information for our workers,” she said.
She said she hopes to be able to provide better information for 45 H-2A workers who will come to Talbott Farms in June.
Bruce Talbott said the bigger concern for his H-2A workers now is the new state legislation, Senate Bill 121, that will increase the point at which agricultural workers are eligible for overtime pay to 56 hours per week from 48 starting on Jan. 1, 2027.
Legislation passed in 2021 that went into effect last year had set the overtime threshold at 48 hours for most workers who are classified as highly seasonal. During peak weeks of work that threshold can go up to 56 hours for some small growers. Workers must be paid time and a half over that threshold.
Senate Bill 121 squeaked by on a vote of 33-32 after some of the most contentious debates on the House Floor this session centered on worker protections and help for struggling farmers. The bill is currently on Gov. Jared Polis’ desk awaiting his signature.