Daniel Navarrete, Director
Division of Regulations, Legislation, and Interpretation
Wage and Hour Division
U.S. Department of Labor, Room S-3502
200 Constitution Avenue NW
Washington, D.C. 20210

Comments on RIN 1235-AA46: Employee or Independent Contractor Status under the Fair Labor Standards Act, Family and Medical Leave Act, and Migrant and Seasonal Agricultural Worker Protection Act

Dear Director Navarrete:

We submit these comments from the Economic Policy Institute (EPI) on the Department of Labor’s (“Department” or “DOL”) Notice of Proposed Rulemaking (“NPRM”) regarding the standard for determining who is an employee and who is an independent contractor under the Fair Labor Standards Act (“FLSA”), the Family and Medical Leave Act (“FMLA”) and the Migrant and Seasonal Agricultural Worker Protection Act (“MSPA”).

The Economic Policy Institute (EPI) is a nonprofit, nonpartisan think tank created in 1986 to include the needs of low- and middle-income workers in economic policy discussions. EPI conducts research and analysis on the economic status of working America, proposes public policies that protect and improve the economic conditions of low- and middle-income workers, and assesses policies with respect to how well they further those goals.

We strongly oppose the Department’s rule as proposed. We urge the Department to withdraw this rule and instead allow the long-standing test for determining employee status under the FLSA to stand.

EPI has conducted extensive research and analysis over the years on the harms of worker misclassification. As we have outlined, workers classified as independent contractors have no right to earn the federal minimum wage, or to earn overtime pay. They lose eligibility for unemployment insurance if they lose their work, and to workers’ compensation if they are injured on the job. They are less likely to receive employer-provided job benefits, such as health insurance and retirement benefits. They lose the right to paid sick or family leave in states and localities that extend those rights, and they would lose the right to even unpaid, but job-protected, family and medical leave under FMLA. Workers classified as independent contractors also must assume the full financial cost of Social Security and Medicare contributions, rather than split it evenly with their employer.

We attach here an April 2026 EPI report1 estimating the concrete economic costs of misclassification for 11 commonly misclassified types of jobs, among those most likely to be negatively affected by this rule. These include lower-wage, labor intensive jobs such as call center workers, landscaping workers, janitors and cleaners, home health aides, truck drivers, delivery workers, manicurists, housekeeping cleaners, retail sales workers, security guards, and construction workers. Workers in these and other occupations stand to lose wages, benefits, and the basic labor protections they should be owed under the FLSA.

The FLSA has a plain-language definition of “employ,” which “includes to suffer or permit to work.” This is a deliberately broad definition that was intended to provide the FLSA’s protections to most workers. The NPRM also seeks to once again upend the clear, long-standing “economic reality” test, which examines multiple factors to get to the central issue of worker classification: is the worker truly in business for themselves, or do they depend economically on finding work in the business of others, under the control and terms of the employer?

Instead of examining all of the relevant factors in a worker’s situation, the NPRM proposes elevating the factors of the level of control the employer exerts, and the worker’s opportunity for profit or loss, above all others in making a determination about whether someone is truly in business for themselves.

This would fail to account for the economic realities of many working relationships: for instance, would the primary work of the employer be able to get done without the worker? How permanent or exclusive is the work being performed—is there a fixed ending date? Does the worker invest in their own tools and equipment, marketing, or business plan, or is it the employer making those investments? Does the worker rely on the employer for training on how to get the job done? All of these questions fall under the factors that the NPRM would deprioritize—even though they provide important information about whether or not someone is truly in business for themselves, and thus that the employer doesn’t have an obligation to them under the FLSA.

This would narrow the definition of who is a covered employee under these three statutes. DOL’s NPRM will encourage misclassification schemes and a race to the bottom, where employers will be able to reclassify their employees as independent contractors and evade their obligations under these laws. Further, because of occupational segregation and other labor market disparities, people of color, women, and immigrants—and people at the intersections of these categories—are more likely to be in occupations where misclassification is common.

An analysis of the proposed rule’s potential costs to workers

In the proposed rule, the Department egregiously fails to estimate the transfers between employers, workers, and the social insurance system that would occur if this proposal were finalized. The requirements that agencies must follow as a part of the rulemaking process are very clear, and among them is the requirement that agencies must assess all quantifiable costs and benefits “to the fullest extent that these can be usefully estimated.”2 There is no question that DOL could have produced estimates; in what follows, we show that it is straightforward to produce estimates using data researchers routinely use and taking a methodological approach that is in the spirit of estimates the Department of Labor undertakes on a regular basis. One plausible explanation for why DOL left out the required estimate is that any good-faith estimate would have shown this rule will result in a substantial transfer from workers and the social insurance system to employers.

, the Department only briefly touches on potential benefits to workers from their proposal. DOL estimates a 1-3% increase in the total number of independent contractors as a result of their proposed rule.3 However, DOL appears to assume that this increase will come entirely from people who were otherwise not engaging in paid work entering the workforce anew as independent contractors. This means the Department also assumes that there will not be significant reclassification of workers who are currently employees to independent contractor status. Given what we know about the scale of misclassification already occurring under current law, this seems to be, at best, a woefully naive understanding of what employers might do when faced with a weaker standard sanctioned by DOL. Further, our analysis of commonly-misclassified occupations shows that the independent contractor version of paid work actually has less value for the worker than the employee-status version that the same worker could find – in other words, the worker still bears costs because the independent contractor version of the work likely offers lower pay, fewer benefits, and fewer protections.

In this comment we will estimate these transfers from workers and the social insurance system to employers. The basic structure of this analysis is to take (1) the estimated change in the value of a job to a worker if they are classified as an independent contractor instead of an employee, and (2) the estimated change in payments to social insurance funds if a worker is classified as an independent contractor instead of an employee, and then multiply these figures by the estimated number of workers who will shift to independent contractor status if this rule is finalized. This approach will yield the aggregate impact of the rule on workers and on social insurance system coffers.

In a recent publication, EPI estimated (1) and (2) above for workers in lower-wage, labor intensive occupations most likely affected by the rule, such as call center workers, landscaping workers, janitors and cleaners, home health aides, truck drivers, delivery workers, manicurists, housekeeping cleaners, retail sales workers, security guards, and construction workers.4

The cost to workers in these occupations of being classified as an independent contractor instead of a payroll employee ranges from $6,294 annually for retail sales workers (under extremely conservative assumptions), to $23,266 annually for truck drivers (under less conservative assumptions). Similarly, the annual cost to social insurance funds if a worker is classified as an independent contractor instead of an employee ranges from $600 for manicurists (again under extremely conservative assumptions), to $3,046 for construction workers (again under less conservative assumptions).

Given that we do not have a way to determine where the average impact for those affected by the proposed rule falls in those broad ranges, we simply take the lower bound in both cases, to be extremely conservative. Thus, we assume that the cost to workers is $6,294 annually, and the cost to social insurance programs is .

It should be noted that these lower-bound estimates assume that workers classified as independent contractors are paid not just the full regular pay of a W-2 employee, but also are fully compensated for the value of health insurance and retirement benefits. This is, however, highly unlikely in these occupations. The theory that businesses will not be able to pay less in total compensation to workers if their status shifts from employee to independent contractor—that their base pay will rise to make up for a reduction in benefits—is based on the assumption of perfectly competitive labor markets. There is broad and growing evidence that perfect competition is rare, and that most labor markets do not function competitively—particularly low-wage labor markets like those under consideration here, where workers are more likely to lack the power to bargain for higher wages to compensate for their loss of benefits and increase in taxes when they become independent contractors.5 Further, very low-wage employees whose wage is elevated by the minimum wage could easily see their wage drop when, as independent contractors, they no longer legally must be paid the minimum wage.

How will the share of the workforce who are payroll employees and the share of the workforce that are independent contractors change as a result of this rule?

To begin to answer that question, we need to know how many independent contractors there currently are. There is a great deal of uncertainty around this number (the Department notes that “there are a variety of estimates of the number of independent contractors, and these span a wide range based on methodologies and how the population is defined”).6 The July 2023 Contingent Worker Supplement finds that there were 11.9 million workers who are independent contractors in their main job. This number, however, drastically underestimates the total number of independent contractors by not including workers who do independent contracting on the side, in addition to a payroll job. The Department makes a correction for this issue and estimates that there are 24.8 million individuals working as contractors at a given time. For the sake of the calculations in this comment, we will limit the analysis to the 11.9 million workers the CWS finds are independent contractors in their main job, since workers who do independent contracting as a side job likely work fewer hours and therefore may lose less than the $6,294 we are conservatively assuming workers whose status changes as a result of this rule lose annually. It should be noted that this means we are leaving out many millions of independent contractors and our estimates will, as a result, be extremely conservative for this reason as well. 

How much will independent contracting increase as a result of this rule?

The Department’s proposal would potentially allow companies to legally argue that workers who are now misclassified as independent contractors, or who are working “off the books,” would be legitimately classified as independent contractors under the narrow terms of the proposal. As such, one approach would be to use the percentage of workers misclassified or working off the books under current law to estimate the number of workers who could be reclassified as independent contractors under the proposed rule. However, due to severe data constraints, estimates of the share of workers who are misclassified as independent contractors or working off the books are limited. A 2020 paper estimates that between 12.4% and 20.5% of workers in the construction industry are either misclassified as independent contractors or working off the books.7 Conservatively assuming that the bottom of this range applies more broadly to the lowest-paid quartile of the U.S. labor market, that is 5.1 million low wage workers who may be affected by this rule.8 Of course, these are workers who are already not getting the benefit of being a payroll employee, so the economic impacts described above would not apply. However, this exercise does provide a broad sense of the potential scope of workers affected. Further, even these workers lose something of value under this rule given the current enforcement regime, namely the legal right to the wages and benefits they would receive if they were properly classified. We do not attempt to quantify this effect.

To be exceedingly conservative, we will simply assume that there will be an increase as a result of this rule of 5% in the number of workers who are independent contractors in their main job.9 This translates into an increase of just 595,000 workers who are independent contractors at their main job, given the conservative CWS estimate of 11.9 million workers who are independent contractors in their main job. Multiplying that by our conservative estimate that these workers would lose $6,294 per year yields an aggregate loss to workers of over $3.7 billion annually. Further, social insurance funds would lose at least $357 million annually (595,000 times $600) in the form of reduced employer contributions, meaning this rule also results in a transfer of at least $357 million annually from social insurance funds to employers.10

The NPRM would also have ripple effects in lost benefits and protections that employees are entitled to under other statues. The proposed rule would also extend the weakened definition of employee status to the Family and Medical Leave Act (FMLA) and the Migrant and Seasonal Worker Protection Act (MSPA). Farm workers are already among the most vulnerable, low-paid workers in the U.S., and often face challenges at worksites including poor workplace safety conditions. If farm employers and farm labor contractors have the ability to offload more of their basic responsibilities under MSPA, more farm workers will be at risk of classification as independent contractors and lose even their basic rights under MSPA11, such as to be paid on time or have their working conditions disclosed. More workers would also be at risk of losing access to the right to take job-protected, unpaid family and medical leave under FMLA, which also references the definition of “employee” under the FLSA to determine eligibility for FMLA coverage. The National Partnership for Women and Families has estimated that 15 million workers took advantage of FMLA leave in 2025 alone.12 Protections for break time for nursing mothers—recently expanded under the PUMP Act—are also tied to FLSA employee status. Losing the right to take job-protected time off for illness or the birth of a child, the right to take a break to pump milk, the right to know when you will be paid and to be paid on time—these all specifically conflict with DOL’s stated interest in improving flexibility and satisfaction for workers. This is false flexibility.

The reality of flexible work

The Department focuses on “flexibility and satisfaction” as important non-pecuniary attributes that workers may trade income to receive. However, it is difficult to imagine that there are a meaningful number of workers who would get more satisfaction from doing the same job for substantially less compensation as an independent contractor than for substantially more compensation as a payroll employee. Many workers indeed may value flexibility, but notably, employers are able to provide a huge amount of flexibility to payroll employees if they choose to; the “inherent” tradeoff between flexibility and payroll employment is greatly exaggerated. Workers also highly value other factors, like income stability, which are much less prevalent among independent contractors and are not taken into account here.

In 2024, EPI published a report reviewing the available research and survey data on worker preferences regarding flexibility, stability, and predictability.13 While workers do often prefer flexibility and control over their own schedules, they also want stable, full-time work with predictable pay and benefits.

Employers often incorrectly claim that the FLSA prevents flexible scheduling, but employers control scheduling decisions and can organize work schedules to meet FLSA’s requirements. Employers have long been able to provide flexible schedules and comply with wage and hour laws, and flexible schedules have been negotiated by employers and unions in compliance with the law. Scheduling decisions are the employer’s prerogative (in negotiation with their workers’ union, if there is one), and they can and do set and change schedules in accordance with production demands. Independent contractor status is hardly needed for employers to provide their workers with flexibility.

In conclusion, we urge DOL to withdraw this rule as proposed. The Department should not be in the business of weakening labor protections standards, and should instead seek to vigorously enforce laws against misclassification.

Sincerely,

Samantha Sanders
Director of Government Affairs & Advocacy
Economic Policy Institute

Heidi Shierholz, Ph.D.
President
Economic Policy Institute

Valerie Wilson, Ph.D.
Director, Program on Race, Ethnicity, and the Economy
Economic Policy Institute

Endnotes

1. Ismael Cid-Martinez et al., Misclassifying workers as independent contractors is costly for workers and social insurance systems, Economic Policy Institute, April 2026.

2. Maeve P. Carey, Cost-Benefit and Other Analysis Requirements in the Rulemaking Process, Congressional Research Service, December 9, 2014.

3. 91 Fed. Reg. 9967.

4. Ismael Cid-Martinez et al., Misclassifying workers as independent contractors is costly for workers and social insurance systems, Economic Policy Institute, April 2026.

5. Alan Manning Monopsony in Motion: Imperfect Competition in Labor Markets (Princeton, NJ: Princeton University Press, 2003); Anna Sokolova and Todd Sorensen, Monopsony in Labor Markets: A Meta-Analysis, Washington Center for Equitable Growth, February 2020; Arindrajit Dube, Jeff Jacobs, Suresh Naidu, and Siddharth Suri, “Monopsony in Online Labor Markets,” American Economic Review: Insights 2, no. 1 (March 2020): 33-46, https://www.aeaweb.org/articles?id=10.1257/aeri.20180150.

6. 91 Fed. Reg. 9962. 

7. Russell Ormiston, Dale Belman, and Mark Erlich, An Empirical Methodology to Estimate the Incidence and Costs of Payroll Fraud in the Construction Industry, Institute for Construction Economics Research, January 2020. 

8. Data from the Current Population Survey from the Bureau of Labor Statistics find that there were 163.0 million workers in the U.S. in the first quarter of 2026; 5.1 million = 163.0 million * .25 * .124. 

9. A 5% increase is a conservative assumption, given that the Department is proposing to amend the five-part economic realities test—which has always been interpreted by the Supreme Court in its totality, not weighing any one factor more than another—in a way that will place undue weight on two factors and then narrows those two factors further, making it more likely that workers will be classified as independent contractors and as a result likely leading to a substantial increase in the number of independent contractors. 

10. Some might argue that social insurance funds wouldn’t be hurt by not having employers pay into unemployment insurance and workers’ compensation because independent contractors aren’t eligible for those benefits. However, low-paid independent contractors who lose their contracts and are without work, or get hurt on the job, will be likely to need to depend on safety net programs to survive, so the social insurance system as a whole would still be depleted. 

11. Wage & Hour Division, U.S. Department of Labor, “Fact Sheet #35: Joint Employment and Independent Contractors Under the Migrant and Seasonal Agricultural Worker Protection Act,” revised January 2020. 

12. National Partnership for Women & Families. 2026. Key Facts: The Family and Medical Leave Act (fact sheet), January 2026.

13. Margaret Poydock, Lynn Rhinehart, and Celine McNicholas, Flexible Work: What Workers, Especially Low-Wage Workers, Really Want And How Best To Provide It, Economic Policy Institute, July 2024.

Workers misclassified as independent contractors lose out on critical protections, benefits, and labor rights including the minimum wage, overtime pay, unemployment insurance, the right to form a union, and anti-discrimination protections in most states. Additionally, these workers must bear the full financial costs of Social Security and Medicare contributions, rather than split it evenly with their employer.  

Construction workers, truck drivers, and home health aides are some of the commonly misclassified jobs analyzed in the report. A typical construction worker misclassified as an independent contractor would lose as much as $20,399 in annual income and job benefits compared with what they would have earned as an employee. A typical truck driver, if misclassified as an independent contractor, would lose as much as $23,266 annually. 

Lost compensation due to misclassification varies by state. Estimated annual per-worker costs in lost compensation are as high as $31,326 for truck drivers in New Jersey. On average, misclassified workers stand to lose more in higher-wage states and occupations because W-2 earnings are greater, but losses are substantial in all states—as accompanying state fact sheets show.

Misclassification does not just shift the full burden of social insurance to workers—it also reduces the total revenues received by the social insurance system. The report estimates that social insurance systems can lose up to roughly 30% of per-worker revenue when workers are misclassified as independent contractors. This is because independent contractors do not contribute to unemployment insurance and workers’ compensation systems, and because they may earn less than they would as employees (and lower pay translates directly into lower contributions).

Embedding strong legal definitions—like the ABC test—in state and federal law is fundamental to ensuring that employees are not improperly classified as independent contractors. These strong legal tests must also be paired with strong enforcement mechanisms to uphold workers’ rights and deter employers from violating the law. 

“Illegal misclassification of employees as independent contractors deprives workers of their labor rights, slashes their pay, and undermines funding for crucial social safety net programs,” said Nina Mast, EPI economic analyst and co-author of the report. “Policymakers at the federal, state, and local levels should act to curb misclassification and enforce the rights to which all workers should be entitled.” 

Key findings:

• This analysis estimates the cost to workers of being misclassified as an independent contractor for 11 commonly misclassified jobs. We find, for example, that a typical construction worker misclassified as an independent contractor would lose as much as $20,399 in annual income and job benefits compared with what they would have earned as an employee. A typical truck driver, if misclassified as an independent contractor, would lose as much as $23,266 annually.
• Lost compensation due to misclassification varies by state. Estimated annual per-worker costs in lost compensation are as high as $31,326 for truck drivers in New Jersey. On average, misclassified workers stand to lose more in higher-wage states and occupations because W-2 earnings are greater, but losses are substantial in all states.
• Misclassification can happen in any occupation. However, because of occupational segregation and other labor market disparities, people of color, women, and immigrants—and people at the intersections of these categories—are more likely to be in occupations where misclassification is common, like most of the 11 occupations analyzed in this report.
• Misclassification shifts the full burden of social insurance—like Social Security and Medicare—to workers, while also reducing the total revenues received by the social insurance system. We estimate that social insurance systems can lose up to roughly 30% of per-worker revenue when workers are misclassified as independent contractors.
• In 2025 and 2026, lawmakers in at least 12 states proposed or passed legislation to address worker misclassification. Most recent state efforts have focused on increasing accountability of employers that misclassify workers, bolstering remedies for workers subject to illegal misclassification, and strengthening enforcement capacity.

What is misclassification?

The type of misclassification addressed in this report occurs when an employer wrongly classifies an employee as an independent contractor. The problem of workers being misclassified as independent contractors is pervasive and widespread. An analysis from the National Employment Law Project focusing on state-level reports on misclassification estimated that as many as 10–30% of employers misclassify their workers.1

The way a worker is classified has serious implications for their labor rights and economic security. Federal, state, and local labor laws provide extensive protections for employees that are not available to independent contractors. For example:

• When a worker is misclassified as an independent contractor, they are stripped of minimum wage and overtime protections.
• These misclassified workers are no longer eligible for unemployment insurance or workers’ compensation.
• They do not qualify for paid sick or family leave, even in places where those benefits are statutorily prescribed for employees, and they are extremely unlikely to receive employer-provided health insurance or retirement benefits.
• They are no longer protected by the National Labor Relations Act, which ensures workers’ rights to form unions and bargain collectively to improve their working conditions.
• In most states, misclassified workers are not covered by anti-discrimination and sexual harassment protections.2
• Workers misclassified as independent contractors also must assume the full financial cost of Social Security and Medicare contributions, rather than split it evenly with their employer.

Losing these benefits and protections leaves independent contractors in a far more vulnerable position than employees when it comes to their basic rights on the job. Employers have argued that many workers prefer being classified as independent contractors because they value “flexibility” over fundamental labor rights. But this so-called flexibility is often illusory, given the degree of control many employers retain over workers and their schedules.3

Misclassification remains pervasive in part because its costs to individual workers can be hard to quantify and thus easy to obscure. Prior research has estimated the costs of misclassification by quantifying the number of workers misclassified; the amount of wage theft experienced by misclassified workers; and the loss in federal and state tax revenues resulting from employers not paying payroll taxes and workers’ compensation insurance.4 This report presents estimates of two types of costs caused by misclassification for 11 commonly misclassified occupations:

1. What workers lose when they are misclassified—that is, the difference in the value of a job to a worker if the worker is classified as an independent contractor rather than as an employee; and
2. What social insurance funds lose when workers are misclassified—that is, the difference in payments to social insurance funds if a worker is classified as an independent contractor rather than as an employee.

Misclassification can happen to any worker. However, because of occupational segregation and other labor market disparities, people of color, women, and immigrants—and people at the intersections of these categories—are more likely to be in occupations where misclassification is common, such as most of the 11 occupations investigated in this analysis (see Appendix Table 1). Any policy conversations about worker classification status should center these types of occupations, as workers classified as independent contractors in these occupations are often not genuine independent contractors with full control over their work conditions and are more likely to be exposed to the harms of reduced earnings and loss of labor protections.

The cost to workers

Table 1 presents estimates of the cost to workers of being misclassified as an independent contractor for 11 occupations that are highly prone to misclassification.5

For example, when classified as an employee, the typical construction worker had annual earnings of $58,360 in 2025 (column 1, top row of Table 1). This includes the average value of supplemental pay—overtime, shift differentials, and paid time off. When we also include the value of health insurance and retirement plans and subtract the worker contribution to Social Security and Medicare, the full value of the job to the worker when classified as an employee rises to $62,567 (column 2, top row). But when the typical construction worker is misclassified as an independent contractor—and therefore loses access to legal protections, supplemental pay, and employer contributions to Social Security and Medicare—we estimate that the value of that job falls to between $42,169 and $49,382 (columns 3 and 4, top row). That estimated range depends on the assumptions we make about the degree to which the employer increases the base pay of independent contractors, if at all, to offset the fact that the worker does not have access to many rights and benefits.

The estimates in columns 3 and 4 are based on two scenarios, described below, that together define the endpoints of this range and establish plausible estimates of the cost of misclassification to workers. It should be noted, however, that this range is conservative because it does not account for the loss independent contractors face of many rights associated with being an employee—for example, it excludes the impact of the loss of rights guaranteed by the National Labor Relations Act, such as the right to union representation.

In both scenarios, we assume that the worker—if classified as an independent contractor—receives the full regular pay of a W-2 employee but does not receive supplemental pay (like overtime or paid time off), must pay the full combined employer and employee contribution to Social Security and Medicare (15.3% of earnings), and must cover paperwork costs like invoicing, bookkeeping, and small business tax filings.

Scenario 1: No compensation for health and retirement benefits

In the first scenario, we assume employers do not compensate independent contractors for the value of health insurance and retirement benefits. This generates our low estimate of the value to workers of independent contractor jobs—along with the high estimate of the cost to workers of independent contractor jobs—in Table 1.

Under this assumption, we conservatively estimate the net value of a construction job done as an independent contractor falls to $42,169 per year. This is $20,399—or 32.6%—less than if that worker were a W-2 employee ($62,567 in column 2). Notably, misclassified truck drivers also see a massive decline in net value of the job. As a W-2 employee, a truck driving job is worth $64,474, while an independent contractor receiving the same wage, but no supplemental pay or benefits, earns $41,208, which is $23,266 less.

Table 1

Scenario 2: Full compensation for health and retirement benefits

In the second scenario, we assume employers fully compensate independent contractors for the value of health insurance and retirement benefits. This generates our high estimate of the value to workers of independent contractor jobs, along with the low estimate of the cost to workers of independent contractor jobs, in Table 1.

Access to these benefits increases the annual earnings of an independent contractor, but not to the level of a W-2 employee. For a construction worker, the net value of the job as an independent contractor is only $49,382, or more than $13,000 below the net value of the same job done as an employee. For a truck driver, the switch to independent contractor status would cost $13,760.

Table 1 also shows estimates for nine other occupations with lower annual earnings than construction workers and truck drivers. As W-2 employees, these workers had median annual earnings between $33,690 and $44,140. Under the estimates in scenario 1 (no compensation for health and retirement benefits), being misclassified as an independent contractor would cost between $8,858 (retail sales workers) and $17,939 (light truck delivery drivers). Under scenario 2 (full compensation for health and retirement benefits), the costs would be $6,294 and $10,634, respectively.

Mapping cost to workers by state

See fact sheets by state.

Because worker pay varies meaningfully across states, we also estimate the cost of misclassification to workers by state. We follow the same methodology we used for our national-level estimates but incorporate state-level data where available.

Figure A maps the financial penalty that workers face when wrongfully misclassified as independent contractors. This figure uses estimates from scenario 1, where we assume employers do not compensate independent contractors for health and retirement benefits. (See Appendix Table 2 and Appendix Table 3 for a detailed breakdown of costs to workers by occupation and state for independent contractors with and without compensation for health and retirement benefits.)

The cost of misclassification ranges from $5,774 annually for housekeeping cleaners in Mississippi to $31,326 for truck drivers in New Jersey. This range of estimates reflects the fact that misclassified workers stand to lose more in higher-wage states and occupations where the W-2 earnings of employees are greater. Even so, losses are substantial across all states.    

Figure A

The cost to social insurance

Social insurance consists of government programs funded by dedicated payroll taxes paid by workers and/or employers, which entitle workers to benefits when they experience qualifying events—such as reaching retirement age (Social Security and Medicare), being laid off (unemployment insurance), or being injured on the job (workers’ compensation). When a worker is misclassified as an independent contractor, the entire cost of Social Security and Medicare contributions is shifted to the worker.6 Misclassification also renders workers ineligible for participation in state and federal unemployment insurance and workers’ compensation programs.

Misclassification does not just shift the full burden of social insurance to workers—it also reduces the total revenues received by the social insurance system. This occurs for several reasons. First, unemployment insurance and workers’ compensation systems receive no contributions from independent contractors—though it is worth noting that this in no way ensures that these workers will not need to rely on public safety net programs if they are laid off or injured on the job. Second, independent contractors in the occupations we analyze may earn less than they would as employees, because, for example, they are no longer legally entitled to the minimum wage, overtime protections, and are highly unlikely to receive any paid time off. Because Social Security contributions are a percentage of earnings (and the taxable maximum is not binding in these occupations), lower pay translates directly into lower contributions.

Table 2 illustrates the impact of worker misclassification on payments to social insurance funds in the 11 occupations analyzed above. For example, the typical construction worker classified as an employee and their employer jointly contributed a total of $10,663 toward these social insurance programs in 2025. When misclassified as an independent contractor, total payments toward social insurance programs fall to between $7,617 and $8,920 per construction worker (using the same two scenarios described above). This represents a decline in social insurance revenues between $1,743 and $3,046 per construction worker per year.

Under our scenario 1 assumptions (where employers do not increase pay to compensate independent contractors for their lack of employer-provided health and retirement benefits), total contributions to social insurance fall from between 21% ($1,220) for manicurists/pedicurists and 29% ($3,046) for construction workers. Under our scenario 2 assumptions (where employers increase pay enough to fully compensate independent contractors for health and retirement benefits), payments to social insurance drop by somewhat less—10% ($601) for manicurists/pedicurists and 16% ($1,743) for construction workers—due to the higher base pay.

Table 2

Mapping the cost to social insurance funds by state

Expanding this methodology to states reveals how misclassification deprives social insurance funds of crucial dollars needed to maintain crucial programs, such as unemployment insurance and workers’ compensation. Figure B maps the difference in contributions to social insurance funds between W-2 employees and independent contractors under scenario 1, where we assume employers do not compensate independent contractors for health and retirement benefits. The median cost to social insurance funds ranges from $654 per person annually for housekeeping cleaners in Mississippi to $4,008 for construction workers in Hawaii. See Appendix Table 4 and Appendix Table 5 for a detailed breakdown of costs to social insurance funds by occupation and state for the full range of estimates for independent contractors with and without compensation for health and retirement benefits.

Figure B

Recent state and federal policy changes

Strong statutory language, like the ABC test, provides the legal foundation for identifying misclassification 

Given the high stakes of misclassification for workers’ access to fundamental rights and protections, embedding strong legal definitions in state and federal law is fundamental to ensuring that employees are not improperly classified as independent contractors.  

The ABC test is the strongest, most protective test for determining employee status. The test establishes a presumption that an individual performing services for an employer is an employee—not an independent contractor—unless the employer can establish three factors: 

1. The work is done without the direction and control of the employer; 
2. The work is performed outside the usual course of the employer’s business; and 
3. The work is done by someone who has their own, independent business or trade doing that kind of work. 

The ABC test differs from other “tests” of employee status such as the National Labor Relations Act (NLRA) “common law” test and the Fair Labor Standards Act (FLSA) “economic realities” test because the ABC test shifts the presumption to one of employee status, places the burden on the employer to prove independent contractor status, and provides a clear, narrow definition of independent contractor status. In turn, this reduces the likelihood that workers are misclassified and lose protections they should be guaranteed under the law as employees.  

The strength of frameworks used to determine employee status is highly varied across states. At least 18 states and the District of Columbia currently use the ABC test for determining employee status for certain workplace laws. Some states have taken action recently. In addition to pursuing strong, innovative enforcement strategies to combat misclassification, New Jersey’s labor department proposed a new administrative rule in 2025 to codify into state law the agency’s existing ABC test for preventing independent contractor misclassification (the rule has since been paused). This year, a West Virginia bill proposed establishing a new ABC test into state law. 

However, the number of states with ABC tests has decreased in the past decade, with some states weakening or repealing their statutory definitions as a result of lobbying efforts by digital platform companies (e.g. Uber) and other industries whose business models depend on designating large numbers of workers as “independent contractors.” While most states with ABC tests apply them to determine workers’ eligibility for unemployment insurance benefits, only a few states apply them to wage and hour standards like the minimum wage and overtime compensation, and some states have them in place only for workers in certain occupations.

Strong enforcement mechanisms allow lawmakers to protect workers and hold employers accountable 

While strong legal tests provide a basis for determining whether an employee has been misclassified as an independent contractor, they must be paired with strong enforcement mechanisms to uphold workers’ rights and deter employers from violating the law. Many states are taking steps to strengthen enforcement. In 2025 and 2026, lawmakers in at least 12 states proposed or passed legislation to address worker misclassification. For example, Delaware passed a law in 2025 to hold contractors liable when their subcontractors misclassify workers, Colorado enacted a law to penalize employers that willfully misclassify workers, and Minnesota enacted a law requiring the state labor agency to study the impact of misclassification on workers and state revenue. In 2026, lawmakers in at least eight additional states7 have proposed legislation to address worker misclassification, and two states (Virginia and Washington) have sent approved legislation to the governor. 

At the same time, attacks also continued in 2026. Bills in several states proposed weakening existing ABC tests and excluding certain occupations from being subject to the tests. Other bills proposed establishing corporate-backed sham “portable benefits” schemes that promise some limited (but often inaccessible) benefits for gig workers while locking them out of full coverage under standard state programs and protections by treating them as “independent contractors.”8

Strong enforcement is important, and whether a given situation will be subject to enforcement depends on the strength of a state’s statutory definitions of employment. Both strong legal tests and enforcement are critical to protecting workers from being misclassified.  

Policy recommendations 

Policymakers at the federal, state, and local levels should act to curb misclassification and enforce the rights to which all workers should be entitled. Unfortunately, federal protections from misclassification are limited, and recent progress to address misclassification has been undermined. For example, the ABC test is not currently part of any federal workplace laws. In 2024, the Department of Labor finalized a rule to combat misclassification by adopting a six-factor test to determine worker classification under wage and hour laws. However, the Trump administration stopped enforcing the 2024 rule and recently proposed replacing it with a weaker standard. Given federal retrenchment, state lawmakers have an opportunity and responsibility to strengthen existing state standards.

State and federal policymakers should:

• Establish or expand the use of a strong, uniform protective legal test for determining employee status, such as the ABC test;9
• Strengthen enforcement and increase penalties to deter the misclassification of workers as independent contractors; 
• Pass the Protecting the Right to Organize (PRO) Act,10 which would make it harder for employers to misclassify employees in order to prevent them from forming a union and bargaining collectively;
• Strengthen enforcement of wage theft and misclassification, and fully fund the federal and state agencies responsible for enforcing workers’ wage and hour rights;
• Require employers to provide workers with transparent statements of their employment status and a justification for their classification;
• Extend basic wage and hour protections, workplace health and safety protections, paid sick leave, and other protections to independent contractors to discourage misclassification as a “race to the bottom” for workers’ rights; and
• Improve coordination among state and federal tax and labor enforcement agencies by establishing interagency misclassification task forces with dedicated resources and staff and strong co-enforcement partnerships capable of effectively cracking down on misclassification in targeted industries.11

Methodology

Since there are no comprehensive private or public data sources on workers misclassified as independent contractors, we apply a methodology that makes use of available employee total compensation and earnings data to estimate the costs of misclassification. For each of the 11 occupations included in our analysis, we begin with the average compensation profile drawn from the Bureau of Labor Statistics’ (BLS) Employer Costs for Employee Compensation (ECEC) database. This profile provides a breakdown of average employer costs for employee compensation in the private sector. As an example, Table 3 presents the average hourly compensation profile for construction workers broken into its component parts. We take the ratio of the individual compensation components to regular pay—which includes wages, salaries, supplemental pay, and paid leave—to estimate the ratio of compensation to pay.

Table 3

Next, we apply the ratios of total compensation to pay to median annual earnings obtained from the BLS’ Occupational Employment and Wage Statistics data (OEWS). This gives us estimates of the regular pay, supplemental pay, paid leave, and insurance and retirement benefits for a W-2 employee. We then calculate the net value to the worker as an employee based on the sum of all pay, paid leave, insurance and benefits, minus Social Security and Medicare taxes.

From here, we model two possible ways that the value of a job to a worker can change if the employee is misclassified as an independent contractor. In both scenarios, we assume that the worker, if classified as an independent contractor, receives the full regular pay of a W-2 employee, does not receive supplemental pay (like overtime or paid time off), must pay the full employer and employee contribution to Social Security and Medicare (15.3% of earnings), and must cover paperwork costs like invoicing, bookkeeping, and small business tax filings. We calculate paperwork costs by updating the methodology used in 2020 comments on independent contractor status under the Fair Labor Standards Act.12 The difference in the two scenarios is in our assumptions about the degree to which the employer increases the base pay of independent contractors, if at all, to offset the fact that the worker does not have access to many rights and benefits.

1. In the first scenario, we assume employers do not compensate independent contractors for health and retirement benefits. This generates our low estimate of the value to workers of independent contractor jobs—along with the high estimate of the cost to workers of independent contractor jobs.
2. In the second scenario, we assume that employers fully compensate independent contractors for the cost of health insurance and retirement benefits that employers would have paid to the same worker working as an employee. This generates our high estimate of the value to workers of independent contractor jobs, along with the low estimate of the cost to workers of independent contractor jobs.

State estimates

Estimates of the cost of misclassification by state and occupational group are produced similarly to national estimates, using compensation data from the BLS’ ECEC data and state earnings data from the BLS’ OEWS data.

Compensation profiles can be obtained from the ECEC that detail the total hourly cost of compensating a worker, including the share of total compensation derived from regular pay, insurance and retirement benefits, and legally required benefits. A ratio of compensation to pay can be calculated from these profiles by dividing each compensation component by regular pay, as in Table 3.

The ECEC does not have compensation profiles for occupational groups at the state level. They do, however, have compensation profiles for all workers, for all workers by occupation, and for all workers by census division, which we combine to estimate compensation profiles for occupational groups at the census division level. Table 4 illustrates this procedure using construction workers in New England as an example. First, we create compensation to pay ratios for private-sector workers at the national level, for each occupational group (e.g. construction workers), and for each census division (e.g. New England). Next, we divide the occupation-specific ratio by the national ratio and multiply this quotient by the census division ratio. This yields a unique compensation to pay ratio for New England construction workers, which is then mapped onto all states within this respective census division. This procedure is followed for all occupational groups and census divisions to produce compensation to pay ratios for all 50 states and the District of Columbia.

Table 4

We apply the state- and occupation-specific compensation to pay ratios to state and occupation median annual earnings obtained from BLS’ OEWS data. This gives us estimates of total compensation that comes from regular pay, supplemental pay, paid leave, and insurance and retirement benefits for W-2 employees across all states and occupations.

As in the national estimates, the cost of misclassification to both workers and to social insurance funds is calculated by comparing the net value of a job for a W-2 employee with that of an independent contractor under two scenarios: with and without compensation for health and retirement benefits. Appendix Tables 2–5 provide detailed breakdowns of these costs in both net dollar amounts and percentage differences relative to W-2 employees.

Notes

1. National Employment Law Project, Independent Contractor Misclassification Imposes Huge Costs on Workers and Federal and State Treasuries, October 2020.

2. Meghan Racklin, Molly Weston Williamson, and Dina Bakst, “State Leadership on Anti-Discrimination Protections for Independent Contractors,” Future of Work Blog (A Better Balance), April 22, 2020.

3. Margaret Poydock, Lynn Rhinehart, and Celine McNicholas, Flexible Work: What Workers, Especially Low-Wage Workers, Really Want And How Best To Provide It, Economic Policy Institute, July 2024.

4. Françoise Carré, (In)dependent Contractor Misclassification, Economic Policy Institute, June 2015; Government Accountability Office, Employee Misclassification: Improved Coordination, Outreach, and Targeting Could Better Ensure Detection and Prevention, GAO-09–717, August 2009.

5. For discussions of occupations where workers are particularly vulnerable to misclassification as independent contractors, see Annette Bernhardt, Sarah Thomason, Chris Campos, Allen Prohofsky, Aparna Ramesh, and Jesse Rothstein, Independent Contracting in California: An Analysis of Trends and Characteristics Using Tax Data, UC Berkeley Labor Center and California Policy Lab, March 2022; Françoise Carré, (In)dependent Contractor Misclassification, Economic Policy Institute, June 2015; National Employment Law Project, Independent Contractor Misclassification Imposes Huge Costs on Workers and Federal and State Treasuries, October 2020; and Lisa Xu and Mark Erlich, Economic Consequences of Misclassification in the State of Washington, Harvard Labor and Worklife Program, December 2019.

6. When workers are employees, they pay the employee share of Social Security and Medicare (7.65% of W-2 earnings). Their employers also make identical payments to Social Security and Medicare.

7. Arizona HB 2463, Illinois HB 2794, Iowa HB 2385, Kentucky HB 449, Virginia SB 644, Washington SB 6302, West Virginia HB 4571, and Wisconsin AB 1160.

8. See, for example, New Jersey A 1184, California SB 527, and Georgia HB 987.

9. Lynne Rhinehart et al. Misclassification, the ABC Test, and Employee Status, Economic Policy Institute, June 2021.

10. Celine McNicholas, Margaret Poydock, and Lynne Rhinehart, Why Workers Need the Protecting the Right to Organize Act, Economic Policy Institute, February 2021.

11. For more on interagency misclassification task forces, see Rebecca Smith, Public Task Forces Take on Employee Misclassification: Best Practices (policy brief), National Employment Law Project, updated August 2020. For more on co-enforcement partnerships, see Janice Fine, Daniel Galvin, Jenn Round, and Hana Sheperd, “Strategic Enforcement and Co-enforcement of U.S. Labor Standards Are Needed to Protect Workers Through the Coronavirus Recession,” Boosting Wages for U.S. Workers in the New Economy series, Washington Center for Equitable Growth, January 2021.

12. Heidi Shierholz, “EPI comments on independent contractor status under the Fair Labor Standards Act,” comments submitted on behalf of the Economic Policy Institute to Division of Regulations, Legislation, and Interpretation (Wage and Hour Division) Director Amy DeBisschop, October 26, 2020.

The IRS estimates that business taxpayers spend 13 more hours than nonbusiness taxpayers doing their taxes. If we conservatively assume that independent contractors spend 30 minutes per week on other (non-tax) paperwork costs that they wouldn’t have to spend if they were a payroll employee, that, plus the additional 13 hours spent on taxes, is an additional 39 hours of paperwork per year. This is equivalent to 1.8% of pay, or $880 annually for an independent contractor who earns $48,887 in regular pay annually.  

Additionally, we estimate these paperwork costs as the annual purchase of basic bookkeeping software ($114 on the lowest end, using FreshBooks, see https://www.freshbooks.com/pricing, accessed October 16, 2024), self-employed tax filing software for federal taxes ($129, using TurboTax, https://turbotax.intuit.com/personal-taxes/online/live/, accessed October 16, 2024) and state taxes ($64, using TurboTax).

Data appendix

Appendix Table 1

Appendix Table 2

Appendix Table 3

Appendix Table 4

Appendix Table 5

Since 1935, the National Labor Relations Act (NLRA) has provided most private-sector workers the statutory right to join together with coworkers for the purposes of mutual aid and protection, including by forming or joining unions to bargain collectively with employers over wages, hours, and terms and conditions of work.

Under the NLRA, workers can form a legally recognized union in two ways:

1. They can petition their employer to voluntarily recognize their union after a majority signs union cards or petitions, or
2. They can file a petition for a union election administered by the National Labor Relations Board (NLRB) and have their union certified by the NLRB after a majority vote in favor. In practice, the NLRB election process can be lengthy, and workers often face intense employer interference.

The NLRA requires employers to bargain with workers who have won a union election and prohibits employers from retaliating against workers for organizing activity. But NLRA enforcement structures are weak; employers who violate the NLRA face no monetary penalties; and workers whose rights are violated receive no compensatory damages. As a result, millions of workers seeking to unionize face daunting obstacles because the NLRA fails to reliably deter employer retaliation or to require that employers bargain in good faith to reach a contract settlement. Decades of federal policy and court decisions have further weakened the NLRA; most notably, the 1947 Taft-Hartley Act legalized new forms of employer anti-union activity and allowed states to constrain collective bargaining rights through anti-union, so-called right-to-work (RTW) laws.

Moreover, many workers have never been covered by federal labor law. Jim Crow-era occupational carveouts in the NLRA continue to exclude public-sector workers, farmworkers, and domestic workers (including millions of home care and child care workers) from coverage, as well as supervisors and independent contractors. Other federal labor laws cover some other groups of workers: Rail and airline workers’ collective bargaining rights are governed by the Railway Labor Act; U.S. Postal Service employees gained collective bargaining rights in the 1970 Postal Reorganization Act; and collective bargaining rights of most other federal employees are governed by the Federal Service Labor-Management Relations Act (enacted as Title VII of the 1978 Civil Service Reform Act).

What are the threats to workers’ federal rights to unionize and collectively bargain?

Current threats to workers’ union rights include:

• Undermining the NLRB’s ability to enforce labor law: After taking office in January 2025, one of President Trump’s first actions was removing Board member Gwynne Wilcox, attacking the NLRB’s status as an independent agency. This move left the NLRB without a quorum and therefore unable to adjudicate cases until quorum was eventually restored in December 2025. This rendered the NLRB nonoperational for the better part of a year—allowing employers to violate labor law with no immediate legal consequences—and created an enormous backlog of unadjudicated cases for an already underfunded and understaffed NLRB to consider. Even more consequentially, the attack compromised the NLRB’s long-term ability to function independently: Firing Wilcox for “disfavoring employers” made clear that under the current administration, NLRB members must favor employers to keep their jobs—essentially eliminating the independence of the agency.
• Court challenges to the NLRB’s constitutionality: Corporate lawsuits challenging the NLRB’s constitutionality and status as an independent agency may eventually be headed to the Supreme Court—which could effectively repeal the NLRA and end federal protections for private-sector workers’ rights to unionize and bargain.
• Eliminating federal mediation of difficult contract disputes: The Trump administration has attempted to use executive action to eliminate the Federal Mediation and Conciliation Service (FMCS), a federal agency that, since 1947, had provided mediation to resolve labor-management disputes and training to promote productive collective bargaining relationships. This action has so far been blocked by court challenges.
• Rendering the NLRB hostile to workers and further weakening enforcement: One of President Trump’s first actions after taking office in 2025 was the firing of NLRB General Counsel Jennifer Abruzzo. The new NLRB General Counsel has already begun to rescind key practices implemented by Abruzzo to strengthen enforcement. Likewise, newly appointed NLRB Board members may reverse recent decisions that represented steps toward shoring up workers’ rights to organize and bargain, such as the Board’s 2024 ruling declaring anti-union captive audience meetings illegal.
• Loss of bargaining rights for workers with precarious NLRA coverage: Tens of thousands of student workers at private colleges and universities have organized unions in recent years via successful NLRB elections, but the NLRB’s position on whether student workers at private institutions are covered by the NLRA has fluctuated under different administrations. It is widely anticipated that new Trump NLRB appointees could reverse this key precedent, stripping student workers of NLRA protections.
• Stripping public employees’ collective bargaining rights: The Trump administration has prioritized direct attacks on union rights of federal employees, first by terminating collective bargaining agreements covering Transportation Security Administration employees, then terminating union contracts across several other federal agencies to implement a Trump executive order aimed at eliminating collective bargaining rights for most federal employees. These actions continue to face legal challenges (and could be reversed by legislation passed by the House and under consideration in the Senate), though the administration has often pressed ahead with terminating or ignoring union contracts despite court orders. The attempt to eliminate federal employee collective bargaining advances elements of a broader proposal in Project 2025 (p. 82) that claims public employee unions are “not compatible with constitutional government” and calls on Congress to consider banning them. 
• Narrowing existing legal pathways to unionization: Project 2025 (p. 603) proposes to eliminate the default NLRA process that allows workers seeking to form a union to approach their employer to request voluntary recognition once a majority have signed union cards as verified by a neutral third party via a “card check” process. Several states have also advanced parallel attacks on workers’ NLRA-protected right to organize using this process. So far, Tennessee, Georgia, and Alabama have enacted anti-union legislation threatening to deny state economic development funds to any employer who voluntarily recognizes a union, even though voluntary recognition when a majority of workers have signed union cards remains fully lawful under the NLRA.

How can states maintain and strengthen worker rights to unionize and bargain?

States have clearly established authority to legislate in areas of labor law not covered by the NLRA (for example, regarding the collective bargaining rights of groups of workers who are excluded from NLRA coverage), but they have historically been preempted from lawmaking in areas that the NLRA “arguably protects or prohibits” or that address questions Congress intended to leave to “free forces” of the market. Moreover, in 1947 Congress explicitly granted states authority to restrict (but not expand) private-sector workers’ collective bargaining rights by enacting so-called right-to-work laws barring employers and unions from including union security clauses in collective bargaining agreements. Unless otherwise noted, the state policies and practices discussed in this brief are measures that have been previously enacted in multiple states and are not preempted by federal labor law.

Step I: Lock in and shore up existing federal protections

As noted above, the NLRA was enacted in 1935 to protect workers’ basic rights to organize for better working conditions, form unions, and collectively bargain—but current federal and corporate attacks are accelerating a decades-long trend of weakening these protections. This means even workers whose rights are legally protected on paper operate in practice on a highly uneven playing field when trying to organize a union or negotiate a fair contract. States can take several important actions to shore up workers’ existing labor rights, remove state-level constraints and obstacles to unionizing, and ensure that workers can more fully exercise their existing federal rights to organize and collectively bargain.

To lock in current federal union and collective bargaining protections, states should: 

1. Repeal so-called right-to-work laws and other anti-union state measures constraining workers’ organizing and collective bargaining rights:

At a bare minimum, states should avoid diminishing workers’ federal labor rights and refrain from imposing additional obstacles to organizing and collective bargaining.

• 26 states have in place anti-union RTW legislation that constrains collective bargaining rights by barring employers and unions from negotiating union security agreements.{{1}} RTW laws are designed to suppress union membership by making it more difficult for workers to form and sustain unions, and data show they result in lower wages and benefits for all workers. States with RTW laws should follow Michigan’s recent lead and repeal them.
• Colorado should repeal its unique, long-standing anti-union state law that imposes RTW-like conditions on unionizing workers unless they undergo a state-mandated “second election” (and win by a supermajority) in order to win full bargaining rights.
• States (including Alabama, Georgia, and Tennessee) should repeal recently enacted anti-union laws intended to penalize employers and workers who exercise NLRA-protected rights to use majority card check and voluntary recognition to form a union, and other states now considering such legislation should reject it.

2. Protect workers’ freedom of conscience and ban mandatory “captive audience” meetings:

Workers’ right to organize without employer interference is spelled out clearly in federal labor law, but employers have long used mandatory captive audience meetings and other tactics to violate these rights in practice to block workers from organizing new unions. In 2024, the NLRB ruled that anti-union captive audience meetings constitute illegal employer interference with workers’ right to organize. Prior to this ruling, at least a dozen states had already enacted legislation to protect workers broadly from the overarching threat of employer coercion, banning mandatory captive audience meetings on political or religious matters including (but not limited to) employer opinions on unionization. Because the NLRB can only address captive audience meetings focused on anti-union speech, and because the new ruling is at risk of reversal by the current labor board, it remains important for states to enact and enforce legislation that broadly protects workers’ freedom of choice and conscience on a wide range of political and religious matters.

3. Extend unemployment insurance to striking or locked out workers:

States can help make sure workers can fully exercise their collective bargaining rights—including the right to strike if necessary—by ensuring that workers whose paychecks stop due to a strike are eligible to apply for unemployment insurance (UI) benefits under the same rules as other unemployed workers. In too many states, workers are disqualified from applying for UI when on strike (or even when locked out by an employer during a labor dispute), opening the door for employers to undermine negotiations and attempt to “starve workers out” rather than negotiating to reach an agreement. More states should join New Jersey, New York, Oregon, and Washington in ensuring that both striking and locked out workers are eligible to apply for UI. This is an extremely low-cost policy that can help level the playing field in labor negotiations, stabilize local economies during labor disputes, and potentially lead to fewer strikes and lockouts by encouraging parties to seek fair contract settlements.

4. Guarantee organizing and collective bargaining rights in state constitutions:

A handful of states have long had constitutional language in place affirming collective bargaining rights, and other states have been motivated to amend their constitutions to safeguard basic labor rights in the face of growing threats. In 2022, a supermajority of voters approved a constitutional Workers’ Rights Amendment in Illinois declaring that “no law shall be passed that interferes with, negates, or diminishes the right of employees to organize and bargain collectively.” A similar constitutional amendment will appear on the ballot in Vermont in 2026. These amendments affirm the collective bargaining rights of all employees, regardless of occupation or sector, and explicitly prohibit RTW-style legislation that limits bargaining rights. Such constitutional language can help spur legal or legislative action necessary to actualize collective bargaining rights for farmworkers or others excluded from NLRA coverage—as New York and New Jersey have done—and may help states protect the labor rights of student workers and others whose status under federal labor law has been or may in the future become precarious.

5. Enact “trigger laws” to ensure future continuity of rights for workers at risk of losing federal labor law coverage:

Given current threats to the NLRA, some states are enacting policies designed to ensure they are positioned to protect private-sector workers’ rights to unionize and bargain in the event that aspects of federal labor law are repealed, struck down, or go unenforced. Taking such actions in as many states as possible is an important stopgap measure that comes with opportunities to improve and strengthen labor laws in some states. However, it is also the case that many states instead have in place (or could pass) highly restrictive anti-union state labor laws that would take effect if no longer preempted by the NLRA and strip many workers of their collective bargaining rights.

• More states should follow the lead of Rhode Island’s 2025 legislation ensuring collective bargaining rights for student workers at private universities in the event their federal labor rights are revoked by future NLRB decisions. The new law expands state labor law’s definition of “employee” to include “teaching assistants, research assistants, fellows, residential assistants and proctors” “when not already protected” by the NLRB. 
• In 2025, both New York and California enacted trigger laws authorizing their state labor boards to assert jurisdiction over private-sector labor relations in the event the NLRB ceases to do so. Massachusetts is also considering similar legislation. NOTE: These new laws are facing legal challenges from the NLRB based on claims that federal labor law preempts states from taking such action.
  

Step II: Extend organizing and collective bargaining rights to workers who are excluded from federal labor laws

Federal labor law excludes public-sector, agricultural, and domestic workers from coverage, as well as supervisors and independent contractors. This leaves states latitude to set their own policies on union and collective bargaining rights for workers in these occupations (with the exception of private-sector supervisors, where state action has been preempted by federal courts).

1. Ensure full collective bargaining rights for all state and local government workers:

State policies on collective bargaining for different categories of state and local government workers vary widely both across and within states. Currently, many states maintain public employee collective bargaining laws with provisions roughly equivalent to (and, in a few instances, stronger than) those covering private-sector workers under the NLRA. Some other states completely prohibit some or all public employees and employers from entering into collective bargaining agreements or heavily restrict the topics public employees and employers can negotiate and include in a contract. At present, roughly half of states lack robust, comprehensive collective bargaining laws covering all state and local government workers. State collective bargaining laws can vary across several dimensions, including:

• which groups of workers or occupations are covered
• which matters related to compensation and working conditions must be or can be discussed by parties in bargaining (including topics like whether workers can opt to pay their union dues via payroll deduction)
• whether bargaining is purely voluntary or whether employers are obligated to bargain under certain conditions, such as majority support for the union
• what steps a group of workers must take to demonstrate majority support for unionization in order to gain or maintain recognition and/or legal certification for purposes of collective bargaining
• what mediation or arbitration procedures are prescribed if the two parties reach an impasse in bargaining
• whether workers have the right to strike, and
• what recourse is available to workers or unions if employers violate the law.

States should assess the current strength of public-sector collective bargaining statutes across these dimensions and prioritize addressing coverage gaps or weaknesses, looking to states with robust comprehensive frameworks (and enforcement mechanisms) in place—such as Connecticut, Minnesota, Oregon, and others—for models. Examples of states moving to strengthen aspects of existing public-sector collective bargaining laws in recent years include the following:

• Many states with strong public-sector collective bargaining frameworks already in place continue to address coverage gaps and ensure equal collective bargaining rights to occupations formerly excluded or functionally blocked from coverage. Recent examples include legislation extending bargaining rights to university graduate researchers and state legislative employees in California, student employees at public universities in Washington, and various groups of Minnesota public university employees.
• New Mexico overhauled its public-sector bargaining statute in 2020, including restructuring the state’s labor board system to strengthen previously weak or inconsistent enforcement.
• In 2020, Virginia lifted a long-standing ban on public-sector collective bargaining and began to permit local governments to bargain with employee unions. In 2026, Virginia is considering much stronger legislation to create a comprehensive statewide collective bargaining framework covering all state and local government workers.
• In Maryland—where collective bargaining coverage varies by jurisdiction and occupation under a patchwork of highly fragmented laws—lawmakers are repeatedly called on to step in to extend bargaining rights to groups of otherwise excluded workers (most recently including community college employees and library staff). This year, Maryland lawmakers should take overdue steps to enact proposed legislation to ensure similar rights for university graduate assistants and postdocs.
• Nevada, where local government employees have had collective bargaining rights for decades, extended these rights to state employees in 2019.
• Colorado granted limited collective bargaining rights to some state employees in 2020 and to some county government employees in 2022. Because (like many states) Colorado collective bargaining laws still exclude many public employees, other units of government have begun to step in as interest in unionization among Colorado public employees continues to grow. Following a successful 2024 local ballot initiative, Denver City Council adopted a strong collective bargaining ordinance covering municipal employees. And in 2026, university regents are considering a proposal to extend collective bargaining rights to faculty and staff across Colorado’s public universities.

2. Create pathways to collective bargaining for in-home child care and home health care workers:

To begin addressing some of the inequities caused by the NLRA’s exclusion of domestic occupations—work that is persistently underpaid and disproportionately performed by women, immigrants, and workers of color—lawmakers have created pathways to collective bargaining for home-based child care providers in at least a dozen states and/or home health care workers in at least eight states. These state laws classify child care or home care workers as public employees for collective bargaining purposes when providing care supported by public funds (e.g., Medicaid). Under such state laws, child care and/or home care workers who choose to unionize can negotiate legally binding collective bargaining agreements with a designated state entity. Recent examples of states taking important action to extend or restore collective bargaining rights for domestic workers include:

• California, where home care workers first won collective bargaining rights in the 1990s, enacted additional legislation in 2019 to create a pathway to collective bargaining for home-based child care workers. California lawmakers have in recent years also considered proposed legislation to shift its long-standing county-by-county collective bargaining system for home care workers to a more consistent statewide system.
• 2024 Michigan legislation restored home health care worker bargaining rights (which had been previously revoked in 2012), establishing a legal pathway to unionization for over 30,000 Michigan home care workers and creating the Michigan Home Help Caregiver Council to bargain with home care workers on behalf of the state.
• Among other reforms, Vermont’s 2024 PRO Act repealed the previous exclusion of domestic workers from coverage under the state’s labor law.

• If enacted, 2026 proposed legislation to expand public-sector collective bargaining in Virginia will include home care workers, creating a Virginia Home Care Authority to act as the public employer of home health care workers for bargaining purposes.

3. Ensure full collective bargaining rights for agricultural workers:

Agricultural workers in at least 14 states currently have some legally protected collective bargaining rights, though the strength of these rights and state-level mechanisms to enforce them vary widely. California’s 1975 Agricultural Labor Relations Act (ALRA) remains the longest-standing and most robust state law covering farmworkers’ union rights. Like many state labor laws, the ALRA is largely modeled on the NLRA, but it also illustrates how states can learn from weaknesses in federal labor law when legislating in areas not covered by the NLRA. For example, California’s ALRA explicitly allows workers to unionize through majority card check recognition, permits unions to engage in secondary consumer boycotts, and gives its labor board broad authority to enforce the statute as necessary to further state labor policy (rather than requiring it to look to federal precedents established under the NLRA). Examples of other states that have recently pursued action to extend collective bargaining rights to farmworkers include:

• Following a court case affirming the state’s constitutional obligation to protect farmworker collective bargaining rights, New York enacted 2019 legislation amending its existing state labor statute to include farmworkers and granting enforcement authority to its existing state labor board. The New Jersey Supreme Court likewise in 1989 affirmed that employers are constitutionally required to bargain with farmworker unions, though the state has not yet created a statutory framework for farmworker collective bargaining.
• Colorado 2021 legislation removed a long-standing exemption of farmworkers from state labor law and codified farmworkers’ rights to organize and collectively bargain.
• Legislation to extend collective bargaining rights to farmworkers in Maine has been introduced numerous times since 2021, including a bill that was vetoed in 2022.

4. Create pathways to collective bargaining for independent contractors:

A few states have begun to experiment with statutory frameworks to support nonmajority pathways to unionization and unique forms of sector-wide collective bargaining for rideshare drivers. While it is too soon to know what outcomes will result, these policies are intended to create a pathway to a union contract for drivers who have been persistently treated by digital platform companies as “independent contractors” rather than employees (thereby excluding them from coverage under the NLRA and most other labor and employment laws). While app-based workers continue where possible to make claims under various state and federal laws that they should rightfully be considered employees, many have concluded that legal battles to compel tech companies to respect drivers’ employee status under the NLRA have no immediate prospect of success. So far, state-administered rideshare collective bargaining frameworks (developed in part through negotiations with rideshare companies like Uber) have been enacted in Massachusetts and California. Minnesota and Illinois are considering similar legislation.

Step III: Level the playing field for unionizing workers by streamlining organizing and first contract processes, strengthening state labor law enforcement, and educating workers about their rights

1. Strengthen state labor laws by applying lessons from federal labor law’s shortcomings:

Historically, most state labor laws and enforcement systems have been modeled largely on the NLRA. This has in turn meant that most state labor laws reflect some if not all the NLRA’s weaknesses—but this doesn’t have to be the case. When legislating in areas not preempted by the NLRA, states can strengthen labor laws far beyond familiar NLRA frameworks—including by incorporating into state law aspects of previously proposed (but not yet adopted) federal labor law reform. Examples of such opportunities include:

• Require employers to recognize unions once a majority of workers demonstrate interest: Federal labor law provides that once a majority of workers have signed union cards or petitions, they can approach their employer to recognize the union and have a neutral third party “check the cards” to verify majority interest. Indeed, as written, the NLRA assumed “card check” to be the default process for unionizing, with board elections becoming necessary only in instances where an employer had reason to question a union’s majority status. But because the NLRA also allows employers to refuse to recognize a union even where clear majorities exist, today, anti-union consultants nearly always counsel employers to block this pathway to unionization—meaning it is rarely available to workers in practice. State labor laws can however ensure that covered workers can use this process to unionize, as public-sector collective bargaining laws in at least 14 states currently do. For example, in 2003, Illinois amended its public-sector labor law to require employers to recognize unions based on verified majority showings of interest, as did New Mexico in 2020 and Vermont in 2024.
• Give workers and state labor boards stronger tools to enforce labor law: Limited and often ineffective enforcement mechanisms are a long-recognized shortcoming of federal labor law, and decades worth of proposed federal labor law reforms—including the Protecting the Right to Organize (PRO) Act considered by Congress in recent years—provide roadmaps for strengthening enforcement. States could, for example, adopt PRO Act-style proposals to strengthen enforcement by authorizing state labor boards to levy civil monetary penalties on employers who violate workers’ rights; award monetary damages (in addition to back-pay) to workers who are illegally fired for organizing; and seek court injunctions to get illegally fired workers back on the job quickly while retaliation cases are pending. State labor laws could also provide workers with a private right of action so they can sue employers for labor law violations in instances where a labor board fails to intervene within a reasonable length of time. The “trigger law” legislation currently under consideration in Massachusetts provides one concrete model for embedding many of these enhanced enforcement measures in state labor laws.
• Ensure timelines and processes for reaching a first contract: Studies show that under weak federal labor law, another common tactic employers use with near impunity to block workers from obtaining a union contract is refusing to bargain in good faith, with no intent to settle a first contract. Many state public-sector bargaining laws ensure timely contract settlements by prescribing that if parties don’t reach agreement within an established timeline, their disputes are submitted to mediation and/or binding arbitration. Illinois, for example, amended its existing public-sector bargaining law in 2025 to set first contract settlement timelines for all newly formed unions regardless of size. Where state labor laws lack timelines for first contracts, lawmakers can adopt proposed PRO Act provisions requiring parties to use mediation and, if necessary, binding arbitration to reach a first contract settlement if they are unable to do so on their own within six months of a new union’s certification.

2. Establish or expand state-level systems to provide mediation and other services that support productive labor-management relations:

Given the Trump administration’s attempts to hobble the Federal Mediation and Conciliation Service (FMCS), states that don’t already provide their own mediation services to assist parties in reaching contract agreements should take steps to do so. For example, Illinois established a new mediation services program in 2025, authorizing its state labor department to appoint a mediator in situations when FMCS is unable to provide one. States should also consider pooling resources to create regional mediation and enforcement services.

3. Ensure all workers can easily learn about their rights to unionize and collectively bargain:

Research shows that worker interest in unionizing continues to grow, but most workers have very little access to information about their labor rights or the steps involved in organizing a union and bargaining a contract. States can play tremendously important roles in ensuring more workers know about and are able to fully exercise their union rights. States can:

• facilitate the ability of existing unions (in sectors governed by state labor laws) to reach all workers they represent with information about their rights under the law and relevant collective bargaining agreements, including via new hire orientation sessions and regular electronic and in-person communication at the workplace. Several states have taken steps to embed these or similar requirements in public-sector bargaining laws. For example, since 2018, Maryland has required public schools to grant unions access to new employee orientation, and New Jersey has required public employers to provide at least 30 minutes for unions to meet with new hires within their first 30 days on the job.
• provide resources for state labor agencies to provide worker rights education programming and/or to replicate online resource hubs such as the Worker Organizing Resource and Knowledge Center created by the U.S. Department of Labor to serve as a “one-stop shop for information and resources on unions and collective bargaining.” Worker rights outreach and training events like those supported by Oregon’s Bureau of Labor and Industry (often in partnership with labor and community groups) also provide excellent models for more states to emulate.
• require basic worker rights education in high schools and as part of state-funded workforce development training programs. Individual teachers or school districts can and sometimes do provide students with information about workplace rights, including information about rights to unionize and collectively bargain (as do some apprenticeship training programs, especially those jointly sponsored by unions and employers). But to ensure all current and future workers have equal access to basic knowledge of their rights on the job, more states should set minimum requirements for including this content in high schools and workforce development programs. California 2023 legislation requiring worker rights instruction for all high school students during an annual “Workplace Readiness Week” is one model for other states to consider.
• maintain and expand state funding for programs that provide adult worker rights education and equip workers to take on leadership roles in their workplaces, unions, and communities. Examples for more states to follow include California, where starting in 2022, state budgets have designated funds to expand labor education capacity across the University of California system and launch new programs in underserved areas of the state, and Maine, where 2022 legislation appropriated funds to establish a new labor and community education center at the University of Southern Maine.

Additional recommended resources 

• State and local policymakers can raise standards and build power for workers (Center for American Progress American Worker Project) 

• Eight ways states can build worker power (Center for American Progress American Worker Project) 

• Building worker power in cities and states (Center for Labor and a Just Economy) 

• How states can lead the way for workers: A state playbook (The Century Foundation) 

• How state and local government can support workers’ right to form and join unions (NYU Wagner Labor Initiative) 

{{1.}} A union security clause is language included in a collective bargaining agreement—negotiated and jointly agreed to by labor and management—that sets terms under which employees covered by a union contract in a given workplace will either join the union or (for workers who choose not to join the union) contribute an agency fee to cover their share of costs of contract and workplace representation benefits they receive from the union. In the U.S., the ability to bargain over union security has proven critical in establishing the stability and longevity of unions in the context of highly unequal workplace power. Without a union security agreement, any union’s future remains by definition “insecure” and precarious—both because future financial resources are unpredictable and because of significant risk that an anti-union employer could at any time attempt to discourage union membership in order to hinder the bargaining process; dissolve a newly formed union; or even encourage decertification of a longstanding union. Overt employer interference with workers’ freedom to join or form unions via tactics like pressuring employees to drop union membership or selecting new hires based on their willingness to oppose a union is of course illegal. However, as noted in this report, such labor law violations remain commonplace both because they are difficult to prove and even if proven, generally result in few or no consequences for employers under existing weak labor laws.

At its core, affordability is shaped by whether workers’ paychecks keep pace with the cost of living. What many now describe as an affordability crisis is the predictable result of decades of policies that have suppressed wage growth and eroded workers’ bargaining power. In the decades before the pandemic, owners and corporate executives claimed an ever-larger share of the income generated by what workers produced. Had pay for typical workers kept pace with productivity over the last 45 years—rather than being suppressed—their paychecks would be roughly 40% larger today. This wage shortfall is the driving force in America’s affordability crisis—and reversing it must be central to any serious affordability agenda.

While workers’ wages—particularly those of low-wage workers—saw sharp inflation-adjusted increases between 2019 and 2024, these gains fell far short of recouping the losses of the four prior decades. These wage increases were largely obscured amid the anxieties of the immediate post-pandemic period, including a large jump in inflation that eclipsed even larger wage gains for most workers. But instead of building on the first real progress in decades, Trump’s policies over the last year will make this wage shortfall worse and are likely to contribute to greater wage suppression in the longer run. Absent an about-face in Trump’s economic agenda, life will continue to become even less affordable for working people.

In this report, we examine 47 of the most significant actions Trump has taken in the first year of his second term to make it harder for working families to afford the cost of living. We organized these actions into five categories:

1. Eroding workers’ wages and economic security;
2. Undermining job creation;
3. Weakening workers’ rights;
4. Enabling employer exploitation; and
5. Creating an ineffective government.

Our list of 47 is not exhaustive; it highlights a subset of Trump’s actions with clear impacts on working people’s economic security and ability to afford the basics. Many of the actions outlined here have impacts across categories. Trump’s attacks on union workers, for example, reduce workers’ wages, weaken workers’ rights, and promote employer exploitation of workers.

Eroding workers’ wages and economic security

Trump’s actions over the last year consistently undermined workers’ wages and increased their economic vulnerability, making it harder for many families to afford basic necessities. In the first weeks after being sworn in, Trump moved quickly to roll back minimum wage increases for hundreds of thousands of workers and more recently, he finalized regulations that reduce the wages of all farm workers, including those who are U.S. citizens. The actions below illustrate how this agenda has played out across a range of policies that harm workers’ wages and economic security:

• Reducing the minimum wage for nearly 400,000 federal contractors: President Trump rescinded an executive order that increased the minimum wage for federal contractors to $15 per hour in 2022 and indexed it to inflation. The minimum hourly wage for federal contractors had reached $17.75 by the time he eliminated the policy. 
• Stopping enforcement of misclassification protections for workers illegally classified as independent contractors: This robs workers of minimum wage, overtime, workers’ compensation, and other basic rights. 
• Finalizing an interim final rule that will radically cut the wages of all farm workers: The rule reduces the minimum wages paid to migrant farm workers in the H-2A program and deducts up to 30% of their hourly pay for housing costs. These wage cuts for H-2A workers are so massive that they will put downward pressure on the wages of all farm workers, including U.S. citizens. Farm workers as a whole will lose between $4.4 to $5.4 billion in pay—roughly 10% to 12% of their total wages. The Trump administration admitted that their immigration enforcement efforts are hurting farmers and will likely lead to higher food prices—an admission they use to justify the pay cuts.
• Denying 2 million in-home health care workers minimum wage and overtime pay: In July, the Trump administration proposed a rule rescinding the 2013 home health care worker rule, which gave in-home care workers the right to earn the minimum wage and overtime pay for the first time. The Department of Labor also stopped enforcing the 2013 rule, effectively giving employers the green light to ignore it during the rollback process. 
• Facilitating the inclusion of cryptocurrencies among 401(k) investment options: The Trump administration rescinded guidance that warned employers they would face heightened scrutiny if they included cryptocurrency investments in their retirement plans. This “neutral approach” to cryptocurrency, alongside other types of retirement investment strategies, could expose millions of future retirees to significant financial risk.

Negatively impacting job creation

Trump’s second-term policies have weakened job creation across key sectors. His mass deportation agenda threatens to destroy millions of jobs, and his repeated attacks on federal workers have already cost more than a quarter million jobs. Most recent job data already show the effects of these policies, including rising unemployment, slowing job growth, and job losses in both public and private sectors. The policies outlined below show how Trump’s actions have undermined job creation:

• Pausing funding for projects authorized under a bipartisan infrastructure law: This will jeopardize millions of jobs on those projects and deny benefits to communities. 
• Signing into law legislation that facilitates President Trump’s mass deportation agenda: This will cause massive job losses for both immigrants and U.S.-born workers, particularly in construction and caregiving. The Laken Riley Act, the first piece of legislation Trump signed into law, eviscerates due process for immigrants by allowing immigration enforcement to detain immigrants indefinitely if they are accused of even low-level crimes.
• Revoking an executive order that created a federal interagency working group focused on expanding registered apprenticeships in federal employment or on federally funded projects: By doing so, President Trump has limited opportunities to expand registered apprenticeship career pathways in federal employment and halted the expansion of private-sector registered apprenticeships that benefit both employers seeking skilled workers and workers seeking stable careers in high-demand industries.
• Attempting to shut down Job Corps centers operated by federal contractors across the country: Jobs Corps provides free education, workforce training, housing, and job placement to low-income teens and young adults ages 16–24. The uncertainty of the program left thousands of young people with no other options for housing at risk of homelessness.
• Introducing uncertainty into U.S. manufacturing global supply chains through chaotic and arbitrary trade policy and tariffs: Over the first year of the second Trump administration, average effective tariff rates have changed from 2.4% to a high of 28% then back down to today’s 17% as of January 5, 2026—a historically unprecedented scale of volatility in trade policy. This uncertainty and the retaliatory actions levied by U.S. trade partners overwhelmed any potential strategic gains from smart trade and tariff policy that could have supported U.S. manufacturing, resulting in a steady decline in manufacturing jobs in 2025.

Weakening workers’ rights

From his attacks on the independence of agencies to his appointment of corporate-aligned, anti-worker officials, Trump has mounted a sustained assault on workers’ rights, undermining their earnings and making it harder for them to make ends meet. While collective bargaining has been a central target, the damage extends well beyond it. By making work more dangerous, weakening basic labor protections, and heightening economic and immigration precarity, Trump’s administration has systematically suppressed workers’ ability to assert their rights, organize, and demand fair pay and decent working conditions. Trump’s attacks on workers’ rights include:

• Stripping collective bargaining rights from more than 1 million federal workers: President Trump became the largest union buster in U.S. history when he issued an executive order that revoked the collective bargaining rights for workers at more than 30 federal agencies. By rolling back these workers’ right to organize with their coworkers and improve their working conditions, Trump is undermining their ability to efficiently provide services the public relies on.
• Delaying enforcement of the silica rule for coal miners: Exposure to coal mine dust containing silica has been found to lead to black lung disease and progressive massive fibrosis. The Mine Safety and Health Administration estimates that the silica rule would prevent more than 1,000 deaths and 3,700 cases of silica-related illnesses. Delaying enforcement of this rule effectively shifts the burden of protection onto miners, forcing them to weigh their health against their jobs and economic security.
• Proposing limiting the scope of the Occupational Safety and Health Administration’s General Duty Clause: This would make workers less protected from known and preventable hazards where no other specific standard applies.
• Firing the general counsel of the NLRB: Jennifer Abruzzo had instituted a number of important reforms aimed at reinvigorating workers’ rights to a union and collective bargaining. 
• Stripping work permits and temporary immigration protections like parole and Temporary Protected Status from millions of immigrant workers who are lawfully in the United States: Jeopardizing these workers’ immigration status not only causes them to lose their workplace rights but also makes them targets for deportation, which has large negative impacts on the economy. 
• Deterring worker organizing by having immigration enforcement patrol public spaces including places of employment: These tactics make immigrant workers fearful of asserting their workplace rights. Surveillance and enforcement in immigration courts is also preventing migrants from having their cases proceed—cutting off potential pathways to lawful status or protection that would grant them workplace rights.

Promoting employer abuse and exploitation

Trump has consistently promoted employer exploitation of workers by weakening and politicizing labor enforcement. His firing of a National Labor Relations Board (NLRB) member for “disfavoring the interests of employers” was not an isolated act, but part of a broader pattern signaling that he expects the officials he appoints to favor employers in the enforcement of worker protections. His attacks on the independence of agencies tasked with enforcing worker protections further reinforce the message that enforcement will follow his political direction instead of the law—sending a clear signal that workers rights’ violations will go unpunished. Through the actions below, Trump is essentially inviting employers to violate the law without fear of accountability:

• Nominating a secretary of labor who has pursued a deregulatory agenda: This agenda robs workers of standards protecting their health and safety and weakens protections that ensure they are paid for their labor. 
• Firing a member of the NLRB for “disfavoring the interests of employers”: The illegal firing of Gwynne Wilcox compromises the independence of the only agency with the authority to administer and enforce private-sector workers’ rights to a union and collective bargaining. 
• Ending grant funding to fight child labor, forced labor, and human trafficking around the world: Trump terminated International Labor Affairs Bureau grants—leaving vulnerable workers around the world at risk, undermining the U.S.’ ability to monitor foreign governments’ compliance with U.S. trade agreements, forcing U.S. workers to compete on an uneven international playing field, and fueling a race to the bottom in the global economy.
• Nominating a solicitor of labor hostile to workers: Jonathan Berry supports weakening the federal minimum wage, limiting overtime eligibility, and undermining workers’ right to a union by forcing secret ballot elections. 
• Nominating a NLRB general counsel aligned with corporate interests: Crystal Carey was a partner at Morgan Lewis & Bockius LLP, one of the largest management-side law firms that currently represents corporations known for violating workers’ rights, including Amazon, SpaceX, Apple, and Tesla. 
• Nominating a NLRB board member with a long career as a corporate lawyer: Scott Mayer was the chief labor counsel at the Boeing Corporation—a company repeatedly accused of bad faith bargaining—and has a decades-long career as a corporate lawyer, including at Morgan, Lewis & Bockius LLP.
• Nominating an Employee Benefits Security Administration (EBSA) head whose background is misaligned with the ESBA’s mandate: Daniel Aronowitz most recently served as president of a company that insures employers against liability for violating their fiduciary duty as sponsors of employee benefits plans—in other words, a business that helps employers avoid the financial consequences of mishandling workers’ benefits plans. EBSA works to enforce laws protecting workers in employee benefit plans, such as employer-provided health insurance or retirement savings benefits. 
• Weakening workplace safety penalties for smaller businesses: This may reduce incentives for employers to proactively address workplace safety before hazards or accidents occur.
• Nominating an Equal Employment Opportunity Commission (EEOC) chair with a history of opposing anti-discrimination protections: Andrea Lucas voted against workplace harassment guidance that included protections for LGBTQ+ workers and is a known critic of diversity, equity, and inclusion programs at the workplace. The EEOC is an independent agency that enforces federal laws that prohibit employment discrimination and harassment. 
• Revoking an executive order promoting strong labor standards on projects receiving federal funds through Biden-era economic investments: President Trump’s decision opens the door for federal funding to flow toward exploitative employers and increases the likelihood that taxpayer-funded projects will create jobs with lower wages and worse benefits, and that are less likely to be unionized. 
• Appointing the former leader of an anti-union organization to head the Office of Labor-Management Standards: The agency oversees the financial disclosures of unions, employers, and union busting consultants. 
• Firing multiple EEOC Commissioners: These firings compromise the independence of the agency and undermine the enforcement of federal laws that prohibit employment discrimination and harassment. 
• Conducting systematic worksite raids that failed to improve wages and working conditions and instead punished workers: Some were carried out under the guise of stopping labor exploitation, yet occurred with no involvement from the Labor Department and resulted in little to no punishment for employers, whereas workers were detained and deported, losing their livelihoods. In most cases, these raids do not stop employers from exploiting their workers but rather make the workers more fearful of retaliation for speaking out against unsafe working conditions or labor abuses, which puts all workers at risk.

Promoting ineffective government

Trump has taken deliberate actions to weaken the federal government and erode trust in its ability to serve the public interest. From pushing out over a quarter million federal workers to politicizing career civil service positions, eliminating entire agencies, and undermining the federal government’s ability to produce timely, accurate data, the Trump administration has spent the last year reshaping the U.S. government to serve his and his corporate backers’ interests over those of working people. His attacks on the federal workforce make it difficult for public servants to administer essential services that help families afford health care, food, and other basic needs. These actions are intended to foster distrust in the federal government and dismantle vital social safety net programs millions of people in the U.S. rely on. This agenda is most evident in Trump’s signing a massive federal budget bill that includes huge tax cuts for the wealthy while slashing funding for Medicaid and SNAP. In his first year, Trump set a legacy of promoting ineffective government, including through the following actions:

• Politicizing Career Senior Executive Service (SES) officials: Trump issued a memorandum that states they are to serve at the pleasure of the president. SES officials are at the highest level of career civil service in the federal government.
• Firing the majority of staff at the National Institute for Occupational Safety and Health: The agency was created to ensure safe and healthy working conditions. The firings eliminated divisions focused on the health and safety of miners, firefighters, and health care workers. 
• Nominating an EEOC commissioner who is unqualified in workplace civil rights enforcement: Brittany Panuccio lacks the background and expertise to enforce workplace civil rights effectively. 
• Nominating an Office of Management and Budget director who was a lead architect of the right-wing policy agenda known as Project 2025: This agenda aims to remake the administrative state into a vehicle for advancing the Trump administration’s political ideology. 
• Firing the chair of the Federal Labor Relations Authority, an independent agency that oversees labor relations between the federal agencies and its employees: This move—taking aim at a critical mechanism for oversight and recourse—came shortly after the Trump administration issued dozens of actions that harmed the federal workforce.
• Firing a member of the Merit Systems Protection Board, the agency that protects the federal merits systems and the rights of employees in those systems: The illegal removal of Cathy Harris makes way for President Trump to appoint an individual that aligns politically with his interests—further weakening safeguards for federal workers.
• Trying to fire Federal Reserve Governor Lisa Cook in an attempt to replace independent Fed leadership with loyalists who would let him micromanage monetary policy from the White House: Presidential control over Federal Reserve policy would signal to decision-makers throughout the economy that interest rates are no longer be set based on sound data or economic conditions—but instead on the whims of the president. As a result, confidence in the Federal Reserve would evaporate and lead to serious economic consequences for the U.S., including higher inflation and interest rates in the long run. 
• Firing BLS Commissioner Erika McEntarfer when accurate numbers that are legally required to be reported conflicted with Trump’s narrative about the economy: The BLS is one of the most respected statistical agencies in the world, known for its methodological rigor, independence, and transparency. Many stakeholders, including the Federal Reserve, state and local governments, and private businesses, rely on the agency’s economic data releases. This country runs on reliable data. Politicizing economic data from the federal government would undermine effective economic decision-making.
• Attempting to shutter the Consumer Financial Protection Bureau (CFPB): The Trump administration has repeatedly withheld funds from the CFPB, blocking the agency’s work to protect consumers in the financial marketplace.
• Trying to eliminate the Federal Mediation and Conciliation Service, a federal agency that provides mediation, training, and facilitation to resolve labor-management disputes: If the Trump administration is successful in eliminating the agency, unions and employers will no longer have a neutral, third party in the government available to help navigate disagreements in bargaining.
• Directing federal agencies to end the use of disparate impact liability: This is a core civil rights safeguard that is key to ensuring that policies cannot evade civil rights law simply by being labeled “race-blind” even when they perpetuate discrimination, segregation, and racial inequity in the workplace, schools, or the law. 
• Politicizing and compromising independent agencies by putting them under the supervision of the president: Independent agencies were established by Congress to ensure that those charged with safeguarding critically important public interests—like workers’ rights, product safety, or household financial security—would act to serve the public good, not the president’s political needs.
• Signing into law a bill that is the largest direct transfer (through federal policy) of wealth from working families to the ultrawealthy: The legislation is estimated to deliver $1 trillion in tax cuts for the top 1%, while cutting more than $1 trillion in social safety net programs. The legislation will likely cause more than 15 million people in the U.S. to lose health insurance and will likely expose more than 22 million people to food insecurity. 
• Proposing a new federal employee classification called “Schedule Policy/Career” rule, which would make it easier to fire federal employees for political reasons: The Trump administration estimates that more than 50,000 federal workers—2% of the civilian federal workforce—could be reclassified under this new category. 
• Issuing an executive order on apprenticeships that does not require the federal government to consult with labor organizations, despite the integral role labor unions play in registered apprenticeship programs: This weakens program quality and oversight and risks diverting public funds away from proven, high-road training models that deliver good jobs.
• Implementing large-scale reductions in the federal workforce: These have disrupted essential government services due to a loss in capacity and subject matter experts.
• Directing the attorney general to bring challenges against state laws that would regulate artificial intelligence technologies: In the absence of federal action, states have been working to regulate uses of AI that may harm workers or consumers. President Trump’s executive order to deter states from regulating AI represents a White House-led attempt at federal preemption, using the higher authority of the federal government to prevent states from adopting stronger labor standards or other guardrails. 
• Firing 17 inspector generals tasked with preventing mismanagement, corruption, fraud, and waste of taxpayers’ money in federal agencies: More than a dozen federal agencies now lack independent oversight.

Trump’s actions since taking office a year ago reveal a clear and consistent effort to make working people more economically vulnerable while weakening the government’s ability to respond to their needs. The motivation behind these actions is clear: They serve the interests of Trump’s billionaire and corporate backers. Every dollar denied to typical workers in wages ends up as higher income for business owners and corporate managers. This growing inequality is what is making life so unaffordable for workers and their families today.

Department of Consumer and Worker Protection
42 Broadway
New York, New York 10004

Dear members of the New York City Department of Consumer and Worker Protection:

The Economic Policy Institute (EPI) submits this comment in support of the New York City Department of Consumer and Worker Protection (DCWP) proposal to amend rules relating to contracted delivery workers, including to implement Local Law 124 of 2025, which establishes minimum pay protections for grocery delivery workers.

EPI is a nonprofit, nonpartisan think tank working for nearly 40 years to counter rising inequality, low wages and weak benefits for working people, slower economic growth, unacceptable employment conditions, and a widening racial wage gap. We intentionally center low- and middle-income working families in economic policy discussions at the federal, state, and local levels as we fight for a world where every worker has access to a good job with fair pay, affordable health care, retirement security, and a union. EPI has supported past development and implementation of New York City’s existing wage standard for app-based workers in close coordination with affiliates of our Economic Analysis and Research Network (EARN), including the NYC-based Immigration Research Initiative.

New York City has long been a national leader in setting wage and workplace protection standards for frontline service-sector workers who are critical to the city’s economy but often experience low pay, long hours, and unsafe working conditions while producing large profits for corporations or shareholders. This includes workplace protections for app-based ride-hail drivers in place since 2018, and for food delivery workers in place since 2021, when the Council acted on findings from DCWP and established wage standards for app-based delivery workers who are typically treated as “independent contractors” by platform companies and, thereby, denied coverage under most state or federal labor and employment laws. Such municipal policies have become critical to maintaining a consistent wage floor for essential workers in the expanding “gig economy,” since classifying app-based workers as “independent contractors” or applying other non-employee designations remains a key prong of platform companies’ agenda to exempt themselves from coverage under other existing state and federal labor standards.

The 2021 minimum pay standard represented huge progress for app-based delivery workers, the majority of whom are immigrants and people of color. A 2024 report by DCWP revealed a 64% increase in driver earnings alongside an 8% increase in deliveries and a 10% increase in consumer spending when compared with the same fiscal quarter a year prior, before DCWP’s enforcement of the new wage standard. In the first quarter of 2025, consumer spending on app-based delivery grew to an all-time high of $120.2 million, and workers’ total earnings per delivery increased by 21%. In direct contrast to industry claims, these basic workplace protections have benefitted both app-based workers and the platform companies that rely on them.

New York City laws have, however, so far excluded app-based grocery delivery workers, even though these workers face the same struggles that other app-based workers face. Now is the time to take the next step to ensure that all app-based workers are covered by minimum pay and other workplace protections, regardless of their employer.

App-based workers deserve the same protections and benefits as workers in any other industry, including minimum wage rights, unemployment insurance, workers’ compensation, health and safety protections, paid leave, nondiscrimination protections, safeguards against misclassification as independent contractors, and the right to unionize and collectively bargain. DCWP’s proposed rule takes an important step toward realizing that goal by limiting the scope of app-based workers who are excluded from existing minimum wage standards. Raising the minimum wage for app-based grocery delivery workers will have spillover effects that benefit workers in other low-wage jobs, and higher minimum wages benefit us all and make our economy healthier.

Sincerely,

Nina Mast

Policy and Economic Analyst

Economic Policy Institute

TO: Brian Pasternak, Administrator, Office of Foreign Labor Certification

Employment and Training Administration
Department of Labor
200 Constitution Avenue NW
Room N-5311
Washington, DC 20210

RE: Adverse Effect Wage Rate Methodology for the Temporary Employment of H-2A Nonimmigrants in Non-Range Occupations in the United States, Interim Final Rule, request for comments, Employment and Training Administration, 20 CFR Part 655, DOL Docket No. ETA-2025-0008, RIN 1205-AC24 (October 2, 2025)

Dear Administrator Pasternak:

This document in submitted in response to the Department of Labor’s (DOL) Employment and Training Administration (ETA) request for public comment on its Interim Final Rule (IFR) entitled “Adverse Effect Wage Rate Methodology for the Temporary Employment of H-2A Nonimmigrants in Non-Range Occupations in the United States,” which proposes to amend the methodology for setting the Adverse Effect Wages Rate (AEWR) for the H-2A temporary agricultural worker visa program.

The Economic Policy Institute (EPI) strongly opposes the IFR and urges DOL to rescind the IFR and revert back to the previous AEWR methodology, or make amendments to the methodology as described herein. We believe the updated AEWR methodology and the housing deduction in the IFR will negatively impact both U.S. farmworkers and migrant farmworkers recruited through the H-2A program, and worsen conditions in the farm labor market.

EPI fully supports and endorses the written comments and recommendations submitted by Farmworker Justice, on behalf of a multitude of organizations that represent migrant and seasonal farmworkers, including H-2A workers. EPI is a signatory listed on the comments submitted by Farmworker Justice and incorporates those comments and recommendations by reference into this comment. The comments submitted herein should be considered an addendum to those comments, which provide additional analysis to support the opposition of DOL’s updated AEWR methodology.

EPI also supports and endorses the written comments and recommendations submitted by the Migration that Works coalition, which EPI is a founding member of.

About EPI

The Economic Policy Institute (EPI) is a nonprofit, nonpartisan think tank established in 1986 to include the needs of low- and middle-income workers in economic policy discussions. EPI conducts research and analysis on the economic status of working America, proposes policies that protect and improve economic conditions and raise labor standards for low- and middle-income workers—regardless of immigration status—and assesses policies with respect to how well they further those goals.

EPI has researched, written, and commented extensively on the U.S. system for labor migration, including in particular the H-2A and H-2B programs and other temporary work visa programs, as well as on farm labor issues, including labor standards enforcement in agriculture. EPI has also provided expert testimony about work visa programs and farm labor to both the U.S. Senate and House of Representatives, as well as state legislatures.

Given the numerous reports from advocates, news investigations, and even government audits over the years that have revealed how deeply flawed the H-2A program is when it comes to protecting the rights of both migrant farmworkers and U.S. farmworkers, EPI is concerned that DOL would take such an audacious action to lower wages for H-2A farmworkers and U.S. farmworkers, who are already some of the lowest-paid workers in the entire U.S. economy.

Farmworkers earned some of the lowest wage rates in the entire U.S. labor market in 2024

Before discussing the details of DOL’s new AEWR methodology in the IFR, it is important to discuss and contextualize the wages of the 2.2 million farmworkers in the United States—something DOL fails to adequately do.{{1}} Roughly 350,000 of them are crop farmworkers employed through the H-2A visa program.{{2}} DOL’s National Agricultural Workers Survey (NAWS) shows that two-thirds of non-H-2A crop farmworkers are foreign-born, and that one-third are U.S.-born citizens, all of whom have a significant stake in the IFR.{{3}}

The agricultural industry has made numerous claims about skyrocketing and unsustainable wage growth for farmworkers, some of which DOL echoes in the IFR, and the industry has lobbied for federal actions by the executive branch and Congress to artificially restrain wage growth in the industry. As this comment will discuss, most of these claims are not supported by the available evidence.

The most reliable data on farmworker earnings comes from the U.S. Department of Agriculture’s (USDA) National Agricultural Statistics Service (NASS), which conducts the Farm Labor Survey (FLS), the results of which were, until recently, published twice a year in USDA’s Farm Labor report series, with data reported for reference weeks in January, April, July, and October.{{4}} On August 28, 2025, USDA announced that it would discontinue its data collection program and reports, including the FLS,{{5}} thus making 2024 the final full year for which FLS data are available. Before October 2025, FLS data was used by the U.S. Department of Labor (DOL) to set the Adverse Effect Wage Rate (AEWR) for most migrant farmworkers hired in the H-2A program. DOL based the AEWR on the average hourly earnings of nonsupervisory field and livestock workers, as reported by farm operators and by region. DOL used the FLS data to set H-2A wages so they reflect current real-world trends in the farm labor market.

The FLS data up to 2024 data show that while there have been some documented real increases over the past three decades, they have not been unreasonably large increases, and they have occurred in a broader context where the wages of farmworkers are extremely low by any measure, even when compared with the hourly earnings of comparable non-farm workers, as well as when compared with average wages for all workers in the United States, and workers with the lowest levels of education (see Figure A).

Figure A

In 2024, the average earnings of all nonsupervisory farmworkers (i.e., combined field and livestock workers in the FLS) was $18.12 per hour. The average farmworker hourly wage in 2024 was just half (52%) of the average hourly wage for all workers in the United States in 2024, which was $34.27 per hour.{{6}}

The average hourly wage for production and nonsupervisory non-farm workers—the most appropriate cohort of nonagricultural workers to compare with farmworkers—was $27.56, according to the Current Employment Statistics from the Bureau of Labor Statistics (BLS). In other words, farmworkers earned just under 60% of what production and nonsupervisory workers outside of agriculture earned, or three-fifths. In 2024, the farmworker wage gap remained substantial and virtually unchanged from the previous three years. USDA’s ERS shows that between 1990 and 2023, the gap slowly narrowed from 50% to 60% and has described the wage gap between farmworker and nonfarm worker wages as “still substantial, but it is slowly shrinking.”{{7}} 

Farmworkers have very low levels of educational attainment and their wages are comparable to workers in other industries with similar educational attainment. According to the NAWS, 27% completed the 10th, 11th, or 12th grade, and only 16% completed some education beyond high school.{{8}} Farmworkers earn the same or less than the two groups of nonfarm workers with the lowest levels of education in the United States: Nonsupervisory farmworkers earned 10 cents an hour more than the average wage earned by workers without a high school diploma ($18.02), but earned $5.61 less per hour than the average wage earned by workers with only a high school diploma ($23.73).

The AEWR paid to H-2A workers varies by state. In 2024, it ranged from $14.53 to $19.75 per hour. That means that for many H-2A workers, including in some of the biggest states for H-2A employment, the wage they earned was even lower than the national average wage for all nonsupervisory farmworkers in 2024—meaning the gap between what many H-2A farmworkers and non-farm workers earn is even wider.

The AEWR was higher than the national average farmworker wage of $18.12 in 14 states, but in the other 35 states for which DOL published an AEWR, it was lower than the national average. In Florida and Georgia—the top two states for H-2A employment, and where nearly a quarter of all H-2A jobs were located in 2024, workers were paid much less than the national average wage. The AEWR in Florida was $14.77 per hour, $3.35 less than the national average farmworker wage. And Georgia was tied with South Carolina for the second-lowest overall state AEWR, at $14.68 per hour, which was $3.44 less than the national average wage.

To reiterate, the nearly one-quarter of all H-2A farmworkers employed in Florida and Georgia in 2024 were paid at least $3.35 less per hour than the national average wage for farmworkers. And H-2A farmworkers in most other states were also paid less than the national average wage for farmworkers. None of the H-2A wages rates, not even those with the highest AEWRs, are exorbitant salaries that can be cut without harming farmworkers and their livelihoods, contrary to what some agribusiness representatives want the public and lawmakers to believe.

DOL’s claim about the increase in the AEWR to justify cutting wages ignores the fact that AEWR wage growth over the past 20 years has been almost identical to wage growth for other low wage workers

The value and the rate of increase of the AEWR has become a hot-button issue and many claims about its impact have been made over the years by representatives of industry. For example, the American Farm Bureau has called the previous AEWR methodology “a blow to growers” and AmericanHort said the AEWRs were “steep.”{{9}}

Many of the claims by industry advocates and even DOL about year-to-year AEWR increases often do not adjust for inflation, which overstates the actual increase in terms of its dollar value. This is a basic mistake that misleads—and it misleads particularly during times of relatively rapid inflation, like the post-pandemic period. DOL echoes these misleading claims from industry advocates and makes their own in the preamble to the October 2025 IFR, making the year-over-year increases in the AEWR seem greater than they truly are. DOL notes that the national average AEWR has more than doubled in nominal terms over 20 years from $8.56 in 2005 to $17.74 in 2025.{{10}} But DOL’s own CPI Inflation Calculator adjusts the value of $8.56 in September 2005 to $13.99 in September 2025, resulting in a real increase of just over one quarter over two decades, at 26.8%, which over that period averages out to just 1.2% per year.

If we examine the same period for other low-wage workers in nominal terms, we also see that wage growth for farmworkers paid the AEWR is in line with—nearly identical to—nominal wage growth for other low wage workers in the United States. Figure B shows annualized wage growth for workers paid at the 20^th percentile wage, as well as the median wage for workers with less than a high school education—both of which are good measures for typical low-wage workers. Both saw annual nominal wage growth that was at 3.5% between 2005-2025, the period that DOL identifies. Farmworkers earning the AEWR over that same period saw annualized wage growth of 3.7%, nearly identical to other typical low-wage workers. Thus, DOL’s main example of runaway wage growth for farmworkers does not hold water.

Figure B

The 1% to 2% real annual wage growth of the AEWR over the past 15 years is solid but not unsustainable, and still making up for lost ground

This section examines the real value of the AEWR over the past 15 years. We do not suggest that we know exactly what the appropriate AEWR for each state should be or suggest that changes in the AEWR have no impact on farmers, or make any other bold claims about the AEWR. This section is simply an evidence-based look at the value of the AEWR over time, as a response to claims by industry and DOL that the AEWR has risen quickly and too sharply.

As noted in the previous section, alarmist claims about wage growth for the AEWR are numerous. See this comment from Craig Regelbrugge from AmericanHort, who noted that “growers in Delaware, Maryland, New Jersey, and Pennsylvania will take the biggest hit, with a 9.6% increase” in the AEWR from 2021 to 2022, with California’s increasing “more than 8%.”{{11}} Regelbrugge calculates these increases in nominal terms—but what do the increases look like after one adjusts for inflation?

While the percentage increase from 2021 to 2022 was in fact the largest in the states of Delaware, Maryland, New Jersey, and Pennsylvania, after adjusting for inflation, the increase was just 2.3% in those states. A year-over-year real hourly average wage increase of 2.3% is not even large enough to be consistent with the wage gains that could be reasonably expected for an occupation where employers have argued that severe labor shortage exist. If there are in fact labor shortages, it is reasonable to expect wages to rise; that’s simply Economics 101. And a shortage means by definition that the wage increase must be significantly more rapid than would be sustainable and expected in the long-run. Over the pandemic business cycle (between 2019 and 2024) economy-wide productivity growth has averaged 2.1% per year—and this should be the benchmark for real wage growth that is sustainable in the long-run. A raise of 2.3% for a given sector is hardly one that unambiguously signals a severe labor shortage, especially considering how low H-2A wages are relative to other occupations, and how underpaid farmworkers have been for decades.

It would take literally decades of AEWR increases exceeding productivity growth by this amount before H-2A workers had made up the amount these wages had lagged economy-wide average wage growth in recent decades. And in California, what did the “more than 8%” AEWR increase that Regelbrugge cites amount to after adjusting for inflation? H-2A farmworkers in California only saw a real increase of less than one percent (0.9%) in 2022.{{12}} Compare this to food inflation, which was 9.95% in 2022.{{13}} Arguably, the food sector generally was seeing potential income gains to easily cover the AEWR increases. Not all of the income gains went to the farm operators that employ farmworkers, of course, but presumably they received enough of a share that would have covered a wage increase of 1% to 2%.

Now let’s turn to the AEWRs in all states over the past 15 years up to 2025. Table 1 shows the Adverse Effect Wage Rates for H-2A farmworkers in all states with an AEWR between 2011 and 2025, in values that have been adjusted to constant 2025 dollars, and shows the calculated total real change in terms of dollar value, as well as the real total percentage change, and the annualized real percentage change per year, from 2011 to 2025. The AEWRs listed are ranked by number of H-2A workers, using the number of workers certified from DOL as a proxy for the number of workers.

Table 1

The top five states for H-2A employment together account for half of all H-2A employment nationwide (49.9%). The table shows that in Florida, the biggest state for H-2A farmworkers—where 12.3% of H-2A farmworkers are employed—the value of the AEWR increased by a total of $3.07 between 2011 and 2025 (in constant 2025 dollars); that’s a total increase in value of 23.4% over 15 years. The average annual growth was 1.5% over the 2011-25 period. In Georgia, the second-biggest state for H-2A employment—where 11.3% of H-2A farmworkers are employed, the value of the AEWR increased by $3.45 over the past 15 years, averaging an increase of 1.7% per year.

The largest increase in the value of the AEWR (in constant 2025 dollars) was in California, which accounts for nearly 10% of H-2A employment. In California, the total real value of the AEWR increased by $5.69 over the past 15 years; a total percentage increase of 39.9%, which amounts to annualized percentage increase of 2.4% per year. 

Washington, the next biggest state for H-2A employment, was one of 10 states that saw wage growth that was above 2% per year for 2011-25, growing at 2.2% per year. The fifth biggest H-2A state, North Carolina, increased by $3.28 over the last 15 years, a total increase of 25.5%, growing annually at an average of just 1.6% per year.

For the increases that occurred in the Pacific states, it is likely that those larger increases were driven by increases in the states’ minimum wage laws, which then fed into the FLS. The state minimum wages in California and Washington are more than double the minimum wage of $7.25 in Georgia and more than $2 more than the state minimum wage in Florida.

In total, as the table shows, there were 39 states where the annual average real increase in the AEWR was less than 2%. There were 10 states where annual real wage growth was 1.6% to 1.9%, 14 states had annual wage growth that was 1.5%, and in 15 states, wage growth was 1.2% to 1.4%. The average yearly real percentage increase for each state over the 15-year period was 1.6%, and if weighted by the number of H-2A workers in the state, 1.7%.

The annual average real wage growth of 1.2% to 2.2%, with a weighted average of 1.7%, as Table 1 shows—as well as the 1.9% annual real wage growth in the national farmworker wage over the past decade according to USDA survey data which DOL cites{{14}} —represents decent wage growth for farmworkers and suggests a relatively tight labor market for farmworkers. However, it represents little progress for farmworkers who are in an occupation where they are exempted from key labor laws and wage and hour standards, and where they have earned 50% to 60% of the wage earned by comparable nonsupervisory workers outside of agriculture (see Figure A and discussion above). It would take many more years of faster wage growth for farmworkers to begin to approach even three-fourths of what nonsupervisory workers earn outside of agriculture.

The IFR violates the APA because there is no emergency and DOL did not consider alternative policies, methodologies, and key stakeholders

DOL has violated the Administrative Procedure Act (APA) with this IFR, both because (1) it has unjustifiably asserted an emergency that necessitates the issuance of an IFR, rather than the usual APA process of issuing a notice of proposed rulemaking, receiving comments from the public, and then considering public input before publishing a final rule; and (2) because DOL did not consider alternative policies and methodologies or assess their impact, or adequately discuss the impact on key stakeholders other than farm employers.

DOL has bypassed the APA’s requirements by claiming that there is good cause to do so. An agency may only bypass the APA’s procedural requirements only if it “for good cause finds … that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest,”{{15}} and “the good-cause inquiry is “meticulous and demanding.”{{16}} Courts have “repeatedly made clear that the good cause exception ‘is to be narrowly construed and only reluctantly countenanced.’”{{17}}

DOL claims that there is an emergency labor shortage in agriculture that threatens the American food supply, and that without the IFR, farm operators will be harmed and food prices will spike. However it is clear that DOL could have considered alternative AEWR methodologies that could have been implemented quickly and kept farm wages stable, rather than issuing an IFR that leads to the massive wage cuts for H-2A farmworkers that DOL estimates will result. Even if we accept DOL’s claim that there is good cause for an emergency IFR—to the extent that one might exist—it would be an emergency that is entirely of the administration’s own making. DOL notes that the administration’s immigration enforcement efforts will remove many farmworkers, leaving farm operators with a shortage of available workers, which will cause food prices to spike. Did the administration consider slowing down or ending immigration enforcement efforts on farms, in order to prevent food prices from surging and to avoid reducing the supply of available labor? Did the administration consider providing work authorization to current farmworkers who lack an Employment Authorization Document (EAD), or restoring and expanding temporary immigration protections like parole, Temporary Protected Status, and deferred action, as current law permits, to maintain or even increase the supply of U.S. farmworkers? (While these measures would be the purview of DHS, DOL could consult with DHS and the White House on these measures.)

Another fact DOL has pointed to, to justify the emergency nature of the IFR, is the discontinuation of USDA’s Farm Labor Survey (FLS). Again, this is an emergency of the administration’s own making and could have been avoided. Ending the FLS was abrupt, ill advised, and no legitimate justification was provided for it. But even in the face USDA discontinuing the FLS, DOL could have continued to use the 2025 AEWR rates while it crafted a new AEWR methodology and notice of proposed rulemaking to take input from stakeholders. Or it could have adjusted the 2025 AEWRs upward by the estimated amount that the Congressional Budget Office expects for inflation from 2025 to 2026, or the average AEWR inflation over the last five or ten years.

DOL also fails to adequately consider the true costs of driving down wages and working conditions for U.S. farmworkers standards. Not only will the IFR hurt the ability of U.S. farmworkers to feed themselves and their families, it will hurt rural communities in both Democratic and Republican-controlled states, negatively impact economic activity, and drive down wages and working conditions for low-wage workers in a wide range of occupations. It will also impose costs on labor unions by making it harder to organize and bargain, and make more difficult for advocacy groups to assist both migrant and U.S.-born farmworkers to assert their workplace rights. These costs must be estimated and considered by DOL before implementing the new AEWR methodology and the massive wage cuts it will impose.

The new AEWR methodology violates the H-2A statute because it ignores the adverse impacts that will result for U.S. farmworkers

DOL notes in the IFR, in the section titled “Need for Regulation,” that “With illegal border crossings at record lows—agricultural employers, who have historically been incentivized to rely on [unauthorized immigrant farmworkers] because of high AEWRs mandated to use the H-2A program, will experience economic harm caused by mounting labor shortages.” This is the main justification offered to justify the substance of the updated AEWR methodology.

In the IFR’s introduction, DOL cites 8 U.S.C. §1188(a)(1), the statutory section stating that before the U.S. Department of Homeland Security (DHS) can approve a petition for an H-2A workers, DOL must assess and certify that:

(A) there are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services involved in the petition, and

(B) the employment of the alien in such labor or services will not adversely affect the wages and working conditions of workers in the United States similarly employed.

However, subsection (A) is ignored via DOL’s blanket and evidence-free assertion that not enough U.S. workers will apply for farm jobs, and nowhere in the IFR does DOL discuss subsection (B), by assessing or estimating whether the IFR will “adversely affect the wages and working conditions of workers in the United States similarly employed.” In fact, U.S. farmworkers are not treated as stakeholders in the IFR and the impact on their wages and working conditions are entirely ignored.

These omissions alone invalidate the IFR and justify that it be canceled and rescinded.

DOL does not explain how lowering wages for H-2A workers and significantly expanding the program—as DOL estimates will occur, to the tune of wage transfers of $24 billion from workers to employers and an increase of 132,000 H-2A workers in the H-2A program—will not adversely affect U.S. farmworkers. In fact, it is clear and obvious that lowering wages for 10% to 15% of the crop workforce comprised of H-2A workers to far below current average wage rates will put downward pressure on the wages of all farmworkers, including U.S. farmworkers, and make farm jobs less attractive to available U.S. workers. Instead of grappling with this basic reality, DOL makes a blanket statement that “qualified and eligible U.S. workers will not make themselves available in sufficient numbers.” Perhaps DOL is attempting to discourage U.S. farmworkers from applying for farm jobs by lowering overall wage rates—and that will in fact be the result of the new AEWR methodology in the IFR. However, there is little evidence to support the assertion that there are not sufficient U.S. workers to fill seasonal farm jobs. In fact, the vast majority of the 2.2 million agricultural workers hired by farm operators reside in the United States, and one-third of crop farmworkers are U.S.-born citizens according to DOL’s own estimates in the NAWS.{{18}}

Statements from other agencies in the administration also undermine DOL’s claim. In June, USDA Secretary Brooke Rollins went so far as to say that despite the “mass deportations” which DOL predicts in the IFR will result in too few U.S. workers available to fill seasonal farm jobs, Rollins said that the administration would “move the [farm] workforce towards automation and 100 percent American participation,”{{19}} adding that:

There’s been a lot of noise in the last few days and a lot of questions about where the president stands and his vision for farm labor… There are plenty of workers in America.{{20}}

Congress sought specifically to protect U.S. farmworkers from adverse effects when establishing the H-2A program and DOL cannot ignore them. The H-2A statute does not give DOL flexibility to make a blanket determination that U.S. workers will no longer be interested in farm jobs and therefore disregard the impact that the H-2A program will have on wages of similarly employed U.S. workers. The rule is therefore inconsistent with the law and should be rescinded.

The new AEWR methodology violates the H-2A statute because it will adversely impact the wages and working conditions of farmworkers, including U.S. farmworkers

Between 2010 and September 30, 2025, the AEWR was based on a survey of farm operators conducted by USDA, commonly referred to as the Farm Labor Survey (FLS) which set AEWR wage rates for each state based on the regions surveyed by the FLS. While far from perfect, it was the best data set available on the wages of directly hired farmworkers in the United States. On August 28, 2025, USDA abruptly announced that it was discontinuing the FLS.{{21}} A month later, on October 2, 2025, DOL issued the IFR laying out a new AEWR based on data from a different data set, the DOL’s Occupational Employment and Wages Statistics (OEWS) survey. In short, the OEWS is an inferior data set for agriculture and is not a valid survey for setting farmworkers’ wages, in part because it only surveys nonfarm employers—meaning farm labor contractors and other staffing firms that send farmworkers to different farms and pay them roughly only three-fourths of what farmworkers are paid when they are directly hired by farm operators.{{22}}

The updated AEWR cuts wage rates dramatically and creates two artificial “skill levels” for each state which set H-2A wages at the 17^th percentile of wages surveyed (skill level 1) and at the 50^th percentile (skill level 2), which is the median of wages surveyed, based on five combined occupations DOL has determined are relevant in the OEWS. DOL estimates that 92% of H-2A workers will be paid at skill level 1 and 8% at skill level 2. DOL’s IFR is fairly explicit about its desire to lower wages for H-2A farmworkers in order to benefit farm employers and increase H-2A hiring, and the administration’s move to eliminate the FLS and DOL’s move to substitute it with the OEWS appears to be a key action taken to achieve that.

In addition, DOL eliminates the previous requirement that employers pay for 100% of housing costs for H-2A workers. Currently, H-2A employers are required to provide housing for workers if they would not reasonably be able to return to their residences on a daily basis. This is an important requirement of the program given that H-2A workers are so low-paid that they cannot reasonably be expected to pay for their own housing, and that many farms where H-2A workers are employed are in remote areas, and not located close enough to a supply of affordable, accessible housing that still allow workers to report for duty for long hours in the fields. For years, news reports and worker advocates have documented many of the substandard conditions in employer-provided housing for farmworkers.{{23}} However, instead of improving these problems, the AEWR would no longer require employers to pay for 100% of housing costs and implements a new deduction to let farm owners take deductions for housing out of H-2A workers’ paychecks—sometimes as much as nearly one-third of their hourly pay (up to 30%). This will harm farmworkers and reverberate across the industry.

In total, between wage cuts and housing deductions, DOL estimates that over $1.7 billion will be transferred from H-2A workers’ pockets back to farm employers under the new wage rule in 2026, amounting to $24 billion over the next ten years as the program grows to over 500,000 jobs, as DOL predicts will occur. This would represent a shocking upward redistribution of income away from some of the country’s most essential workers for the food system and its most underpaid. All of these impacts clearly violate the H-2A statute’s prohibition on “adversely affect[ing] the wages and working conditions of workers in the United States similarly employed,” and the lower wage rates will make it impossible for DOL to determine whether or not there are sufficient U.S. farmworkers “who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services involved” in H-2A job orders.

New AEWR based on OEWS data will result in $4.4 to $5.4 billion in wages being transferred annually from farmworkers to farm operators at the current size of the H-2A program

We believe the DOL’s estimates are incomplete because they fail to fully consider the wage impacts of the new AEWR, by not considering alternative methodologies and other scenarios that may result. For instance, DOL did not consider the impact on state minimum wage rates and whether the AEWR housing deduction may conflict with state laws, and DOL did not estimate the impact that a massive wage cut for H-2A farmworkers will have on U.S. farmworkers. In this section we present new estimates that we hope will inform the public and DOL as to the true impact of the October 2025 AEWR. They should be considered low-end estimates because the IFR also permits farm operators to pay H-2A workers the AEWR for duties associated with higher-paying non-farm jobs for up to 50% of their work hours. This will put downward pressure on a number of occupations like construction and truck driving, but we have not attempted to calculate those losses to workers, and neither has DOL. 

The IFR will significantly reduce the wages paid to H-2A workers. Weighted across their total weeks worked by state according to 2024 H-2A disclosure data from DOL’s Office of Foreign Labor Certification,{{24}} the average AEWR set for 2025 was $17.43. The rule, however, proposes a two-tiered wage structure with far lower wages for 2026. The average skill level 1 and skill level 2 wages would be $13.70 and $17.22, respectively, even without housing deductions. With housing deductions, the average level 1 and level 2 wages would be $11.78 and $15.30. 

In many cases, the new state AEWR wages are low enough to fall below the wage rates set by state minimum wage laws, with the housing deduction lowering it even further, and in some states, the AEWRs will fall below the state minimum wage only after housing deductions are subtracted. In all those cases, the state minimum wage becomes the AEWR. As of yet, it is unclear how states will react to workers being paid below the state minimum after the housing deduction, and what guidance the federal government will provide with respect to it. For example, in Connecticut, the 2026 skill level 1 H-2A wage is $15.93, but the 2026 state minimum wage will be $16.94. If the state fully enforces its minimum wage and prohibits pay rates from falling below the state minimum, regardless of the Connecticut housing deduction of $2.06, then the lowest wage an H-2A worker would be paid legally is $16.94. But if Connecticut or federal guidance allows the AEWR minus the housing deduction paid to workers to go below the state minimum wage, then an H-2A worker in Connecticut could be paid as low as $14.88 per hour (i.e. the state minimum wage minus the housing deduction). 

It is possible that some states will take the position that the hourly wage rates paid to H-2A workers may not go below the state minimum after subtracting the housing deduction, while some states may allow the deduction, arguing that the federal regulation setting the AEWR supersedes the state minimum wage law. The agricultural industry is likely to argue the latter, and the issue may end up in multiple state and federal courts. As a result of this uncertainty, our estimates consider both state minimum wage scenarios.

The first row of Table 2 estimates the annual pay losses for H-2A workers in 2026 under the IFR, assuming, as DOL does, that 92% of H-2A workers would be paid the skill level 1 wage. If state minimum wages were fully enforced and do not permit the hourly AEWR paid to workers to go below the state minimum wage, then H-2A annual wages would fall by $1.7 billion in 2026, or 25.8%. If state minimum wages were not fully enforced and the housing deduction drops the AEWR below the state minimum wage rates, the losses would be larger: a $2.1 billion or 31.5% annual pay loss. Different states may treat the AEWR and state minimum wage differently; if some states prohibit and some permit the housing deduction to be less that the state minimum wage, then the total amount of annual pay losses would fall somewhere in between those two amounts. 

Table 2

Reducing the AEWR for H-2A workers will also lower wages for U.S. farmworkers—one-third of whom are U.S-born citizens, according to DOL’s latest NAWS survey.{{25}} A fall in the H-2A wage will increase demand for H-2A workers, since employers can save significantly on labor costs if they hire them. As a result, it will become relatively more expensive to hire non-H-2A U.S. farmworkers. Employers will therefore reduce demand for U.S. farmworkers, putting downward pressure on their wages.

This is not hypothetical: Rutledge et al. found that a 10% increase in the AEWR caused an almost 2.8% increase in the wages of U.S. farmworkers.{{26}} With those estimates, the authors estimated that a one-year AEWR wage freeze would reduce annual U.S. farmworker wages by $475 million. Using a similar methodology, we estimate the likely wage reductions for U.S. farmworkers due to the new rule.{{27}}

The H-2A wage reduction under a fully enforced minimum wage is 25.8%. Based on the responsiveness of U.S farmworker wages to H-2A wage rates from Rutledge et al., the second row of Table 1 shows that the new rule could reduce U.S. farmworker wages by 7.1%, or $2.7 billion in annual pay. The wage losses are again larger if states allow the housing deduction to push pay below the state minimum. In that case, U.S. farmworkers in 2026 would experience an annual pay cut of $3.3 billion, or 8.7%.{{28}} 

This means that farmworkers in total will see annual pay cuts of about $4.4 billion to $5.4 billion, depending on the enforcement of state minimum wage laws (9.9% to 12.1%). This amounts to a massive pay cut for farmworkers who are already some of the lowest-paid employees in the entire U.S. labor market, while working in one of the most difficult and dangerous jobs in the economy.

Estimates for alternative scenarios for wage transfers from H-2A farmworkers to farm operators

In this subsection we discuss alternative skill level scenarios that could result and one that DOL could have considered. The scenario that DOL predicts will result, with 92% of H-2A farmworkers being paid the skill level 1 wage and 8% being paid the skill level 2 wage, is an arguably reasonable estimate given certified wage rates in DOL disclosure data and employer behavior under a similar wage rule in the H-2B program{{29}}—a sister visa program of H-2A for workers in occupations outside of agriculture—which was implemented by the George W. Bush administration.

The first possible alternative scenario, which we believe is reasonable given employer savings and the growth that is likely to occur in the H-2A program, is one where 100% of H-2A workers are paid at the skill level 1 wage (or closer to 100% than 92%). Thus we have calculated what the wage losses would look like in that case, shown in Table 3. If state minimum wages were fully enforced and do not permit the hourly AEWR paid to workers to go below the state minimum wage, then H-2A annual wages would fall by $1.8 billion in 2026, or 26.8%. If state minimum wages were not fully enforced and the housing deduction drops wage rates below the state minimum wage rates, the losses would be larger: a $2.2 billion or 32.9% annual pay loss. Both result in a pay cut that is $100 million greater relative to the 92/8 scenario. 

Table 3

Another possible scenario could result if DOL updated and amended the IFR to require the minimum AEWR to be set at the skill level 2 wage, which is the median wage (i.e. the 50^th percentile wage), for the five OEWS occupations DOL uses to calculate the state AEWRs. This is not a likely scenario without a change to the IFR because unless they are forced to do otherwise, employers are likely to opt for the lower pay rates, as DOL also predicts. But setting the AEWR at the median would be a slightly more reasonable methodology for setting the AEWR—since it would at least arguably prohibit employers from undercutting H-2A wage rates relative to the median OEWS wages. (The H-2B program for example, sets the prevailing (minimum) wage rate at the local average wage for the occupation according to the OEWS.) Nevertheless this would still not be a methodology we believe is justified and we would not support it. Table 3 shows that even under this slightly more defensible formulation of the AEWR, H-2A workers would still see a pay cut of roughly $1 billion per year under both state minimum wage enforcement scenarios.

The median wage under the OEWS is still far too low

This significant wage cut for H-2A farmworkers, even if they are paid at the median wage according to OEWS data, reveals the inferiority of the OEWS data set for setting the wages of farmworkers. The OEWS does not directly survey farm employers, rather nonfarm employers that act as subcontractors and pay farmworkers much less on average—thus the OEWS is not an accurate representation of the farm labor market and should not be used to set the state AEWRs. DOL notes in the interim final rule that the OEWS will begin surveying farm employers in May 2026 and that the May 2027 release of the OEWS will be the first to include those survey data. However, it will take a number of additional years for the OEWS to have a robust data sample from farm employers as compared to a dedicated farm employment survey like the USDA’s FLS—three at least, given three-year cycle under which the OEWS operates under—and in the meantime, the wages of both H-2A and U.S. farmworkers will be undercut by billions each year.

Estimates for alternative scenarios for wage transfers from U.S. farmworkers to farm operators

Similarly to the alternative scenarios discussed in the previous section, we have calculated the wage losses to U.S. farmworkers where 100% of H-2A workers are paid the skill level 1 wage and where 100% are paid the skill level 2 wage. Table 4 shows that if state minimum wages were fully enforced and do not permit the hourly AEWR paid to workers to go below the state minimum wage, then annual wages for U.S. farmworkers would fall by $2.8 billion in 2026, or 7.4%. If state minimum wages were not fully enforced and the housing deduction drops wage rates below the state minimum wage rates, the losses would be larger: a $3.4 billion or 9% annual pay loss. Both result in a pay cut that is $100 million greater relative to the 92/8 scenario. 

Table 4 also shows that under the 100% skill level 2 scenario, U.S. farmworkers would see a pay cut of $1.4 billion or $1.6 billion, depending on enforcement of the state minimum wage laws. As noted earlier, different states may treat the AEWR and state minimum wage differently, so the total amount of annual pay losses would fall somewhere in between the amounts in each of the scenarios. 

Table 4

Estimates for alternative scenarios for wage transfers from H-2A and U.S. farmworkers

The final table shows the estimates of wage losses under the same alternative skill and state minimum wage enforcement scenarios, but for all farmworkers (U.S. + H-2A) farmworkers. Table 5 shows that if state minimum wages were fully enforced and do not permit the hourly AEWR paid to workers to go below the state minimum wage, then annual wages for all farmworkers would fall by $4.6 billion in 2026, or 10.3%. If state minimum wages were not fully enforced and the housing deduction drops wage rates below the state minimum wage rates, the losses would be larger: $5.6 billion, which is a 12.6% annual pay loss. Both result in a pay cut that is $200 million greater relative to the 92/8 scenario. 

Table 5

Table 5 shows that under the 100% skill level 2 scenario, all farmworkers would see a pay cut of $2.3 billion or 5.1% if state minimum wages were fully enforced, or $2.6 billion or 5.8% if they are not. Different states may treat the AEWR and state minimum wage differently, and in that case, the total amount of annual pay losses would fall somewhere in between those amounts. 

The IFR’s new housing deduction from H-2A wages will harm H-2A workers and adversely impact U.S. farmworkers because farm operators will prefer to hire underpaid H-2A workers

The IFR creates a new housing deduction that H-2A workers must pay out of the wages of each hour they work—which DOL refers erroneously refers to as a “housing adjustment.” In an Orwellian passage, DOL attempts to justify the housing deduction as promoting fairness for U.S. farmworkers who do not receive “additional non-wage compensation in the form of free housing.”{{30}} The opposite is true: the housing deduction will harm both H-2A workers and U.S. workers.

H-2A workers are scarcely “benefitting” from employer-provided housing. H-2A housing is in fact, primarily for the benefit of the employer. The employer benefits by having a worker remain on or near the worksite, reducing travel time. Employers also benefit by exerting additional control over their workers whose lodging they own and control; workers have few options if they wish to reside elsewhere, and employers sometimes restrict the ability of workers to invite guests, which could include labor organizers or nonprofit groups that could inform H-2A workers of their rights.

H-2A workers also cannot reasonably be expected to afford housing in the United States on the low wages paid to H-2A workers. Even if they could afford housing—it could be nearly impossible to find temporary housing in a remote rural area, or to navigate the rental process if they don’t speak English, or have U.S. identification, or significant sums of money to pay for a down payment up front. H-2A workers also leave their families behind in their countries of origin and most are likely paying to maintain a residence there. Reducing the wages paid to H-2A workers by up to 30% as the IFR does, will only benefit employers by padding their profits by almost $880 billion in 2026, as DOL estimates.{{31}}

The housing deduction will also harm U.S. farmworkers, not help them. H-2A rules before the IFR required employers to offer no-cost housing to U.S. farmworkers if they were in corresponding employment with H-2A workers, thus they were entitled to the same benefit if they needed housing. But the massive reduction in wages that H-2A workers will see from the housing deduction will greatly reduce labor costs for employers who hire H-2A workers as compared to U.S. farmworkers—undercutting U.S. wages and incentivizing employers to hire H-2A workers and bypass U.S. farmworkers—which will unquestionably “adversely affect” the wages and working conditions of U.S. farmworkers.

The updated AEWR methodology and the housing deduction will conflict with many state minimum wage laws and DOL has not provided guidance on how to resolve them

The extremely low AEWRs that DOL has set in the IFR through the use of OEWS data and the creation of two skill levels has rendered the state AEWRs so low that many are now below the state minimum wage—or go below the state minimum wage after the housing deduction has been subtracted. Under the previous AEWR methodology, the AEWR was in all cases higher than the state minimum wage. While the state minimum wage will set the AEWR in states where the state minimum wage is higher than the AEWR, DOL has provided no guidance as to how H-2A employers should treat the housing deduction.

For example, in Florida, the biggest state for H-2A employment, the skill level 1 wage is $12.47 and the Florida state minimum wage will be $14.00 per hour in 2026. The AEWR methodology mandates that the higher state minimum wage of $14.00 per hour will set the H-2A wage. But when the housing deduction is subtracted from the state minimum wage, the H-2A wage falls to $12.00 per hour, violating the state minimum wage law. There are numerous states where this scenario plays out, but the IFR fails to mention or even contemplate this reality, or to suggest what the appropriate H-2A wage would be in such situations.

It is unclear how states will react to workers being certified at and/or paid an H-2A wage that is below the state minimum after the housing deduction, or if DOL will provide any guidance with respect to it. It is possible that some states will take the position that the hourly wage rates paid to H-2A workers may not go below the state minimum regardless of the housing deduction—essentially outlawing the deduction—while some states may allow the deduction, arguing that the federal AEWR regulation supersedes the state minimum wage law. The agricultural industry is likely to argue the latter, and the issue is almost certain to end up in multiple state and federal courts.

OEWS survey data are inadequate for setting the wage rates of H-2A farmworkers because they do not accurately represent the farm labor market

Since 1910, USDA has satisfied a statutory mandate to procure and preserve information concerning agriculture, including “by the collection of statistics” and “any other appropriate means within his power”{{32}} by conducting the Agricultural Labor Survey, commonly referred to as the Farm Labor Survey (FLS).{{33}} For decades the FLS has been the best and most reliable survey detailing conditions in the farm labor market—a fact DOL has acknowledged in multiple previous rulemakings on H-2A.{{34}}

USDA abruptly discontinued the FLS in late August of this year, before the final installment of the FLS could be completed for 2025. Arguably, this has left DOL without a viable survey with which to determine and set wage levels for H-2A workers that will prevent adverse effects on the wages of U.S. farmworkers. However, using the OEWS is not an adequate or rational alternative for setting H-2A wages given the inherent weaknesses in the OEWS data set.

First, as DOL notes, the OEWS only surveys non-farm employers—meaning farm labor contractors (FLCs) and other staffing firms that send farmworkers to different farms. However, nationwide, a majority of farmworkers are employed directly.{{35}} As noted earlier, farmworkers employed by FLCs are paid only roughly only three-fourths of what farmworkers are paid when they are directly hired directly by farm employers.{{36}} This is because FLCs are use a fissured subcontracting employment model, and research shows that subcontracted workers earn lower wages on average, in part because the FLC makes profits by taking a portion of workers’ wages and by lowering costs.{{37}} EPI research also shows that FLCs account for the largest share of wage and hour violations in agriculture—roughly a quarter nationwide and half in two of the largest farm states, California and Florida.{{38}} Thus, DOL is relying on a survey that is overrepresented by FLCs that pay farmworkers significantly less and violate the law at higher rates, while entirely excluding the vast majority of farmworkers who are directly employed and paid more.

Second, while DOL states that it will take action to revise the OEWS to cover agricultural employers to begin use in the May 2026 survey, with data first being available for the May 2027 edition of the OEWS, the reality is that OEWS data on agricultural employers will not be a reasonably adequate representation of the farm labor market until years after that. This is in part because the OEWS estimates are created by averaging wage rates across a span of three years. To be adequate, OEWS would need to collect data from farm operators in 2026, 2027, and 2028, with the data being first published and available at the earliest in 2029. In the meantime, the AEWRs set by OEWS wage data will be artificially low and adversely impacting the wages of H-2A workers and U.S. workers.

Another problematic aspect of using the OEWS is that the data being used by DOL for the 2026 AEWRs are from 2024, thus already two years behind, and DOL has made no upward adjustment for inflation so that the AEWRs reflect a more realistic snapshot of wage rates in the current farm labor market. It is irrational and harmful to both H-2A and U.S. farmworkers for DOL to use wages that are both representative of only non-farm employers and of wages that were paid to workers who were employed by FLCs two years ago.

The FLS was problematic in a similar way, with the average field and livestock worker wage in one year setting the AEWR for the following year, and DOL should have adjusted the FLS wages upward with an estimate for inflation, perhaps by using the Employment Cost Index (ECI) projection from the Congressional Budget Office (CBO) for private-sector wage growth,{{39}} or the average annual wage increase for farmworkers for the past five or ten years. But at least the FLS was a reasonable representation of what employers were paying farmworkers, even if one year behind.

Third, OEWS data also fail to reflect the seasonal nature of the farm jobs filled by H-2A workers. By only collecting data in May and November, it will fail to capture wages during peak harvest season in the summer,{{40}} when farm employment peaks and wages may be higher due to increased hiring. The FLS on the other hand, more adequately captures seasonal peaks in farmworker employment and wages by measuring wages at four points during the year, in January, April, July, and October. 

Seen in this light, the move to use the OEWS seems like an intentional move by DOL to lower the wages of farmworkers as much as possible while ostensibly retaining some connection to available data sets. This is not the first time DOL attempted to set the AEWRs with a data set that would result in lower wages. In 2008, the Department temporarily stopped relying on the FLS and also implemented multiple skill levels, which led to a “precipitous drop” in farmworker wages.{{41}} Thus DOL was aware that moving from the FLS to the OEWS would drastically lower wages for farmworkers.

Using multiple skill levels akin to those in the H-1B program is inappropriate and DOL has rejected such a methodology for other low-wage jobs in the H-2B program

DOL’s decision in the IFR to adopt a multi-tiered prevailing wage structure, which DOL notes reflects the one created for the H-1B program in the H-1B Visa Reform Act of 2004,{{42}} and to require its application to prevailing wage determinations in the H-2A program, was irrational, arbitrary, and not adequately justified by the DOL—similarly to when DOL created multiple skill levels for the H-2B program in 2008.{{43}} The four wage levels for each occupation superimposed on the OEWS prevailing wage data were designed to apply to the H-1B visa category—a visa category where the vast majority of beneficiaries possess at least a bachelors, masters, or doctoral degree (the minimum requirement is a bachelor’s or its equivalent). The four wage levels are intended to be “commensurate with” the workers’ “experience, education, and the level of supervision.”{{44}} In the IFR, DOL has created two skill levels, setting the first, skill level 1, at the 17^th wage percentile of wages surveyed in the OEWS, mirroring the level 1 prevailing wage in the H-1B program. The second is the at the 50^th percentile (the median wage), mirroring the level 3 wage in the H-1B’s four-tiered structure.

If crafted smartly and enforced adequately, four wage levels could arguably make sense in the H-1B context, if for no other reason than to account for the variation in levels of educational attainment amongst the beneficiaries who are granted an H-1B visa. However, as EPI research has shown, the wage levels are not scientifically linked to degrees of education and experience, they are simply chosen points along the distribution of surveyed wages by DOL, and as Ron Hira and I have argued, DOL has set the two lowest wage levels far too low to protect U.S. wage standards.{{45}} In addition, in the H-1B program it is clear that in practice the employer gets to choose the wage level and the government doesn’t verify that a prevailing wage is appropriate unless a lawsuit or a complaint is filed by a worker,{{46}} which is rare, and it seems that very little enforcement has ever been conducted by DOL to prevent underpaying and misclassifying workers at inappropriate wage levels. It is thus reasonable to expect the results will be similar with regard to the use of skill levels in the H-2A context.

DOL’s use of skill levels for H-2A is akin to how it applied the four H-1B wage levels to the H-2B program—another visa program used for temporary low-wage jobs outside of agriculture—and its subsequent rejection of them for H-2B is instructive and worth recalling. In a 2010 notice of proposed rulemaking, DOL observed that “[t]he types of jobs found in the H-2B program involve few if any skill differentials necessitating tiered wage levels.”{{47}} This is because the occupations filled by H-2B workers generally require little or no formal education or training—if some training is required, it can often be learned quickly and on the job (e.g., in the case of janitors, landscapers, amusement park and hotel staff)—and such positions offer little in the way of career advancement. As a result, employers hiring under the H-2B rule with multiple skill levels would routinely hire H-2B workers at the lowest prevailing wage level, because they are in fact searching for workers with only the most basic skills and no formal education. This had an obvious impact on wages, as DOL observed, finding that “in about 96 percent of the cases, the H-2B wage is lower than the mean of the OES wage rates for the same occupation.”{{48}} [The OEWS was formerly known as the OES, which stands for Occupational Employment Statistics.] Using skill levels in the H-2A context will necessarily result in lowered wages for U.S. workers in farm occupations because they will be forced to compete with H-2A workers who are paid at the 17^th percentile for skill level 1, far less than the going rate for a U.S. farmworker.

DOL in its proposed H-2B wage methodology in 2010 also noted that “even if skill-based wage tiers were desirable as a theoretical matter, neither the OES nor any other comprehensive data series that we are aware of attempts to capture such variations.”{{49}} The OEWS wage data do not differentiate the types of skills that would justify one particular wage level or tier over another, because, as DOL explained, “the actual OES survey instrument does not solicit data concerning the skill level of the workers whose wages are being reported.”{{50}} In other words, there is no scientific correlation between the range of experience and skill level within an occupation and the wage tiers superimposed on the OEWS wage data.

Any prevailing wage structure that permits H-2A workers to be paid below the mean or the median wage is flawed and should be rejected by DOL. The H-2A statute’s mandate to ensure U.S. workers are recruited for farm jobs and to guard against adverse impacts on the wages of U.S. farmworkers cannot be complied with if employers are allowed to pay their H-2A employees at wages that are below the mean or median. By definition, any employer who is allowed to pay their H-2A employee a wage that is below the mean or median will be putting downward pressure on “wages and working conditions of workers in the United States similarly employed.” And U.S. workers will be reluctant to apply for jobs that are being advertised at wage rates that are far below the mean or median.

The mean or median wage alone as defined by the OEWS however, would still be too low of a wage, given the flaws inherent in the OEWS that render it an inadequate data set for setting H-2A wages, as discussed earlier. This is illustrated by the findings in Tables 3 and 4. Table 3 shows that even if all H-2A workers were paid at skill level 2, the median wage according to the OEWS, H-2A farmworkers would still see annual wage loses of $0.9 to $1.0 billion, and Table 4 shows that even if H-2A farmworkers are paid the median, U.S. farmworkers would see wage losses of $1.4 billion to $1.6 billion. To ensure that employers do not put downward pressure on the wages of U.S. farmworkers, DOL should amend the IFR to rely on FLS wages for 2024 or the latest release for 2025, which was published in May 2025 and had results for the January and April reference weeks. Those wage rates could then be adjusted upward with an estimate for inflation, perhaps by using the Employment Cost Index (ECI) projection from the Congressional Budget Office (CBO) for private-sector wage growth,{{51}} or the average annual wage increase for farmworkers for the past five or ten years.

Furthermore, Congress directed DOL through the H-1B statute to set four wage level tiers for the H-1B program, but Congress was silent when it came to wage levels in the H-2A program, which is strong evidence that they intended for the H-2A program to not use wage tiers. The H-2A statute states simply that the wages and working conditions of U.S. farmworkers should not be adversely impacted, and it is obvious that creating a new skill level that allows employers to pay farmworkers below the median or mean farmworker wage will undercut wage rates in agriculture and violate the plain language of the statute.

There is no question that creating a skill level that is below the median wage in the new AEWR methodology is inappropriate for farm jobs and will lead to adverse impacts on the wages and working conditions of U.S. farmworkers, and as a result, DOL should rescind the AEWR methodology in the IFR. But even skill level 2, which the IFR sets at the median wage, contradicts the H-2A statute because it is based on OEWS data which are inappropriate given the aforementioned flaws of the survey (only surveying farm labor contractors etc.) that lead to much lower wage rates than the FLS.

DOL did not consider or estimate the impact of the 50% rule, which will undercut the wages of workers outside of agriculture and circumvent the H-2B annual cap

The IFR permits farm operators to pay H-2A workers the state AEWR for duties associated with higher-paying occupational codes that fall outside of the main farmworker SOCs, for up to 50% of their workdays, as long as the duties that fall outside of the main farmworker occupations do not make up a majority of the workdays. In other words, H-2A workers could be employed doing construction work or truck driving for up to 50% of their workdays while being paid the AEWR—as long as they did not engage in those non-farmworker/non-agricultural duties for a majority of their workdays. While DOL is right to point out that many H-2A workers perform tasks associated with higher-paying occupations outside of agriculture, the IFR does not create adequate safeguards to protect workers and the result will be downward pressure on a number of occupations like construction and truck driving. DOL does not seem to have considered these impacts in the IFR nor has DOL attempted to estimate the impacts on U.S. workers, and the relevant provisions in the IFR do not appear to have been crafted carefully. DOL should rescind these provisions, estimate the impacts, and go back to the drawing board and solicit public input from the public, unions, and worker groups, whose interests appear to have been entirely ignored.

The IFR states that :

For all other occupations… The occupational classification and applicable Adverse Effect Wage Rate shall be determined based on the majority (meaning more than 50 percent) of the workdays during the contract period the worker will spend performing the agricultural labor or services, including duties that are closely and directly related, and the qualifications on the job order.{{52}}

Many of the terms in this passage are not defined clearly and it will be difficult for certifying officers (COs) and State Workforce Agencies (SWAs) to interpret in practice. For example the IFR uses a “workdays” standard for this provision to determine if a worker is performing job duties associated with agricultural labor, but workdays are not defined. How much time engaging in a particular task constitutes a “workday”? Why didn’t DOL use work hours instead?

DOL expects that adjudicators, COs, and SWAs will review the job duties on a job order and determine which duties will be performed for a majority of workdays, and then choose the applicable SOC code or codes and AEWRs, whether it be the AEWR for the main farmworker occupations or a separate non-farm occupation or occupations. But what are “closely and directly related” duties? Is the construction of a building on a farm closely and directly related to agricultural labor because it occurs on a farm? Would DOL certify a position that permits an H-2A worker to work for 60%, 80%, or 100% of their work hours doing work that should be classified in the construction laborer SOC code, since it takes place on a farm? And would DOL require that worker to be paid the AEWR rate rather than the higher construction laborer wage rate since it may believe that construction duties are closely and directly related to agricultural work, because it takes place on a farm?

Clarity is lacking and DOL’s language in the IFR creates a massive loophole that will lead to farmworkers being underpaid when they engage in non-agricultural tasks and U.S. workers in non-farm occupations will be undercut when they have to compete with underpaid H-2A workers who have few rights or other options, or the power to negotiate a higher wage with their employer. DOL’s lack of emphasis that H-2A jobs should be agricultural in nature and it’s broad and undefined closely and directly related standard, are not enough to prevent H-2A workers from being underpaid at the AEWR for higher-paying job duties.

The wage savings for employers who take advantage of the loophole created by the IFR are significant—creating a strong incentive to underpay H-2A workers. For example, DOL’s AEWR spreadsheet shows that the construction laborers occupation, Standard Occupational Code (SOC) 47-2061, in California has a median wage of $31.50 an hour (i.e. the skill level 2 wage for U.S. workers). The median wage can be considered the going rate for construction workers in California; if an employer wanted to hire a construction laborer, $31.50 is roughly the wage workers would expect to be paid, and that an employer recruiting a worker would have to advertise the job at. Compare the construction laborer median wage to the combined farmworker occupations AEWR for skill level 1 in California, which will be $16.90 in 2026, as set by the higher state minimum wage. The California AEWR will be just 54% of the statewide median wage for construction laborers—leading to a massive savings for farm employers who pay the AEWR for construction work.

In the southeast, in Georgia, it’s a similar story. According to DOL’s AEWR spreadsheet, the median (skill level 2) wage for U.S. workers in the construction laborers occupation is $19.43 per hour. The skill level 1 AEWR in Georgia, after the housing deduction is subtracted, is $8.77 an hour. That’s just 45% of the median wage for construction work—again giving employers a massive incentive to use H-2A labor to undercut wage standards in construction.

While DOL has now published applicable AEWR rates at two skill levels for occupations outside of the five main combined farmworker occupations, it is unlikely that employers will ever draft job orders in a manner that leads an adjudicator to select the higher wage to be paid to an H-2A worker, or that DOL will ever judge that the higher wage should be paid, given the broad and undefined standards for adjudication in the IFR. Since the H-2A the program is uncapped, employers who actually adhere to the standard in the IFR will still be able to get around the IFR’s requirements by hiring additional H-2A workers and having them work half their workdays doing non-farm duties while being paid the lower wage

A major open question is how much scrutiny and oversight will be applied to job orders that list job duties outside of the main farmworker occupations. Will each job order be reviewed by COs, SWAs, and staff at the Office of Foreign Labor Certification (OFLC) at DOL to prevent misclassification? Funding at OFLC has been flat while the workload has increased significantly,{{53}} making additional scrutiny of 380,000 to over 500,000 job orders unrealistic. What about oversight after H-2A workers are already employed in the United States? Given that the number of Wage and Hour Division investigations of agricultural employers dropped to a record low of 659 in 2024{{54}} and that the number of investigators is also at a record low in 2025,{{55}} and the fact that already, far fewer than 1% of agricultural employers are inspected in a given year,{{56}} it is unlikely that employer abuse of this provision in the IFR will ever be discovered, allowing employers to operate with impunity and underpay H-2A workers.

DOL should take a strong stance that it will not certify any positions where a majority of the work hours will consist of duties outside of the main farmworker occupations. Such positions—like construction laborers, light truck drivers, and heavy and tractor-trailer truck drivers—are more appropriate for the H-2B program, where DOL sets the minimum wage at the local average wage according to the OEWS. If H-2A workers are allowed to continue to engage in tasks and duties outside of the main farmworker occupations that should be paid at the higher wage for the occupation, DOL should cap the number of work hours in the non-farm occupation at 20%, and not certify any jobs where H-2A workers will spend more than 20% of their work hours performing those duties. And if H-2A workers are in fact performing tasks and duties outside of the major farmworker occupations, they should be paid the higher non-farm SOC’s wage—at the median, skill level 2 wage—for 100% of their work hours. In addition, if it is higher, they should be paid at the local average wage according to the occupation in the OEWS, which is DOL’s H-2B wage methodology, in order to prevent undercutting the wages of H-2B workers and U.S. workers similarly employed.

Recommendations

This section provides a brief summary of the recommendations, most of which are discussed in more detail in the earlier sections of this comment.

The White House should direct USDA to reinstate the Farm Labor Survey to set the AEWRs

The FLS has been the best and most reliable survey detailing conditions in the farm labor market—a fact DOL has acknowledged in multiple previous rulemakings on H-2A.{{57}} USDA abruptly discontinued the FLS in late August of this year, before the final installment of the FLS could be completed for 2025. This has left DOL without a viable survey with which to determine and set wage levels for H-2A workers that will prevent adverse effects on the wages of U.S. farmworkers. While DOL is not responsible for USDA’s discontinuation of the FLS, in order to have an adequate data set with which to set the AEWRs, DOL should urge USDA and the White House that the FLS should be reinstated as quickly as possible in order to comport with 8 U.S.C. §1188(a)(1)’s requirement that H-2A employment “will not adversely affect the wages and working conditions of workers in the United States similarly employed.”

The OEWS is inadequate and inappropriate for setting the AEWR because it does not reflect an accurate picture of the farm labor market, and DOL’s improvements will take years to implement

In multiple previous formal comments to DOL, we have discussed the inadequacies of the OEWS data set, including for its use to set agricultural wages,{{58}} and have done so again here. Thus, until and unless DOL makes significant investments in, and improvements to, the OEWS data, they will continue to be inadequate as a substitute for the FLS. The OEWS’s reliance on wage data collected exclusively by farm labor contractors with a fissured business model and lower wages will significantly lower the AEWRs—as the results of the new AEWRs set in the IFR make clear. DOL notes that it is taking steps to improve the collection of farmworker wage and earnings data in the OEWS; for example, by expanding the population surveyed by the OEWS to include farm operators. However, while DOL says the first updated OEWS data will be available for the May 2027 edition of the OEWS, the reality is that OEWS data on agricultural employers will not be a reasonably adequate representation of the farm labor market until years after that. This is in part because the OEWS estimates are created by averaging wage rates across a span of three years. To be adequate, OEWS would need to collect data from farm operators in 2026, 2027, and 2028, with the data being first published and available at the earliest in 2029. In the meantime, the AEWRs set by OEWS wage data will be artificially low and adversely impacting the wages of H-2A workers and U.S. workers.

In addition, the OEWS data being used by DOL for the 2026 AEWRs are from 2024, thus already two years behind, and DOL has made no upward adjustment for inflation so that the AEWRs reflect a more realistic snapshot of wage rates in the current farm labor market. It is irrational and harmful to both H-2A and U.S. farmworkers for DOL to use wages that are both representative of only non-farm employers and of wages that were paid to workers who were employed by FLCs two years ago.

DOL should eliminate the use of artificial skill levels to set the AEWRs

DOL’s decision in the IFR to adopt a multi-tiered prevailing wage structure, which DOL notes reflects the one created for the H-1B program in the H-1B Visa Reform Act of 2004,{{59}} and to require its application to prevailing wage determinations in the H-2A program, was irrational, arbitrary, and not adequately justified by the DOL—similarly to when DOL created multiple skill levels for the H-2B program which were later invalidated by a federal court and which DOL ultimately rejected. DOL notes at 90 Fed. Reg. 47933 that it has:

conclude[d] employers seeking temporary nonimmigrant workers under the H-2A visa classification should receive an AEWR determination that also takes into account the qualifications of the employer’s job offer to better effectuate the requirement to, protect the wages of U.S. workers similarly employed and more closely align the wage standard in the H-2A program with the wage standards in other employment-based immigration programs which use skill-based wage levels.

This reasoning fails for the reasons cited earlier, namely that unlike with the H-2A program, the four H-1B prevailing wage levels are mandated by statute, and are intended to differentiate between workers with different levels of education and experience in a work visa program where the minimum requirement is a bachelor’s degree. In addition, any prevailing wage structure that permits H-2A workers to be paid below the mean or the median wage is flawed and should be rejected by DOL because it fails to guard against adverse impacts on the wages of U.S. farmworkers as the H-2A statute’s mandate requires. By definition, any employer who is allowed to pay their H-2A employee a wage that is below the mean or median will be putting downward pressure on “wages and working conditions of workers in the United States similarly employed.” The mean or median wage as defined by the OEWS however, would not suffice, given the flaws inherent in the OEWS that render it an inadequate data set for setting H-2A wages, as discussed earlier, and as illustrated by the findings for skill level 2 wage impacts in Tables 3 and 4.

DOL should base the 2026 AEWR on the most recent FLS survey data available

Even if the FLS is not reinstated, to ensure that employers do not put downward pressure on the wages of U.S. farmworkers through H-2A employment, the IFR should be rescinded and DOL should rely on the most recent FLS data available to set the 2026 AEWR. This would mean using either the FLS annual wage data for 2024 (which set the 2025 AEWRs) or the latest release for 2025, which was published in May 2025 and had results for the January and April reference weeks. Those wage rates could then be adjusted upward with an estimate for inflation for 2026, by using the Employment Cost Index (ECI) projection from the Congressional Budget Office (CBO) for private-sector wage growth,{{60}} or the average annual wage increase for field and livestock workers in the FLS for the past five or ten years.

DOL in fact proposed a similar methodology in its 2020 AEWR Final Rule.{{61}} That methodology would have abandoned the FLS, frozen worker wages for two years, and then adjusted the AEWR annually based on the Employment Cost Index for wages and salaries for the preceding 12 months. Freezing wages for two years would have been disastrous for workers, and DOL was rightly enjoined by a federal court from enforcing the 2020 AEWR Rule partly for that reason—but adjusting the FLS-based AEWR for inflation was a reasonable response to updated FLS data no longer being available.

H-2A employers should not be permitted to have their H-2A employees engage in non-agricultural tasks like construction for more than a small share of their work hours; never more than 20%

As discussed above, under the IFR farm operators will be permitted to employ H-2A workers who are paid at the combined farmworker occupations AEWR wage rates even when their job duties consist of non-agricultural tasks that would command much higher wages under the OEWS, for up to 50% of their workdays; so long as those job duties do not account for a majority of workdays. This will allow the employers of H-2A workers to undercut U.S. wage standards for occupations like construction and truck driving. Farm operators who primarily wish to hire construction workers, truck drivers, or workers in other non-agricultural occupations outside of the main farmworker (i.e. field and livestock worker combined) SOCs codes are eligible to utilize the H-2B program—which Congress created to fill labor shortages in occupations outside of agriculture—and should do so. Instead, DOL in the IFR has created a scheme that is rife with loopholes and that will be easily gamed by farm operators who can save on labor costs by hiring H-2A workers instead of U.S. construction workers and truck drivers, etc., who would command much higher wage rates than the combined farmworker SOC AEWRs. While it is understandable that H-2A workers in some cases will be required to carry out job duties that do not fall entirely under the main farmworker occupations—as DOL has acknowledged in the IFR by creating AEWRs by SOC codes for non-farm occupations—permitting anything beyond small share of an H-2A worker’s work hours to be dedicated to non-agricultural tasks risks undermining the statutory protections for workers in the H-2A program as well as the H-2B’s statutory protections and annual numerical limit. When certifying officers and State Workforce Agencies identify more than one SOC code for an occupation, they should require the employer to certify that the employee will not be engaged in duties that fall outside the definition of agriculture and the main combined farmworker SOC codes for more the 20% of the total work hours.

H-2A employers should be required to pay H-2A workers who engage in non-farm tasks at the higher non-farm wage for the occupation for 100% of their work hours, at skill level 2 or at the local average OEWS wage, whichever is higher

As discussed in the previous subsection, H-2A employers should not be permitted to have their H-2A employees engage in non-agricultural tasks like construction for more than a small share of their work hours; never more than 20%. If COs and SWAs identify more than one SOC code, including one that is outside of the main combined farmworker SOC codes (i.e. field and livestock worker combined), and where the worker will spend up to 20% of their work hours engaged in non-agricultural tasks and duties, then the H-2A worker should be paid the SOC code with the higher wage for 100% of the worker’s work hours. But skill level 1, because it is so far below the true market rate or the local median or average for both farm and non-farm occupations, should never set the AEWR for a non-agricultural occupation/SOC code. Instead, H-2A workers who are paid for 100% of their work hours for a non-agricultural occupation should be paid either the state median wage for the SOC—which is the skill level 2 AEWR—or the local average wage according to the occupation in the OEWS, if it is higher. The local average wage (i.e. the mean wage in the region or metropolitan statistical area, etc., as defined by the OEWS) is DOL’s H-2B wage methodology. The H-2B prevailing wage formulation should be included because H-2A workers performing duties in non-agricultural SOC codes will be doing work that would normally require an employer to hire an H-2B worker. Thus the same wage methodology must be utilized in order to prevent undercutting the wages of H-2B workers and U.S. workers similarly employed.

Paying workers for 100% of work hours at the highest wage rate for an applicable SOC code outside of the combined farmworker SOC codes is similar to DOL’s 2023 AEWR rule.{{62}} In that rule, if the job duties on the H-2A application (including the job order) did not fall within a single occupational classification, and the occupations involved were subject to different AEWRs, the applicable AEWR would be the occupation with the highest wage for the applicable occupational classifications, and the worker would be paid for 100% of their work hours at that wage. The 2023 AEWR was vastly superior to the AEWR methodology in the IFR; EPI supported that proposed and final rule, with a key recommendation being that when the OEWS was used to set an AEWR, DOL should use the highest of the local or statewide OEWS wages. Agribusiness interests and employers filed multiple lawsuits that ultimately led to the 2023 rule being vacated recently, but only after the current administration ceased to defend the rule in court.{{63}}

If OEWS data are utilized to set wages, they should be set at the 90^th percentile wage for the state

The statutory mandate to ensure that U.S. workers are adequately recruited and that the employment of H-2A workers does “not adversely affect the wages and working conditions of workers in the United States similarly employed,” can only be met if the wage that employers must offer to U.S. workers to test the labor market is high enough to attract them and to prevent downward pressure on wages and standards in agriculture. Setting the wage at the new AEWRs according to the OEWS, a data set that is not appropriate for agricultural workers, will be far too low to attract available U.S. workers to work on farms. While DOL should not use the OEWS, if it continues to do so, DOL should not set the AEWR at percentiles (like the 17^th) that will put downward pressure on the wages of farmworkers. DOL could instead more adequately test the labor market and protect wages standards in agriculture by setting the AEWR at the 90^th percentile wage.

The following is one example comparing the OEWS 90^th percentile wage to the 2025 AEWR: Take the Farmworkers and Laborers, Crop, Nursery, and Greenhouse (SOC 45-2092) occupation in the OEWS for 2024—which is the most common and relevant farmworker occupation in the OEWS for H-2A jobs—and compare it with the wage rates set in the 2025 AEWR, which DOL set with FLS data from 2024. The 2025 AEWR for California, which is based on FLS data from 2024 (making it the more appropriate comparison year for 2024 OEWS wages) was $19.97. The 2024 OEWS 90^th percentile wage in California for SOC 45-2092 was $21.97 in 2024,{{64}} about 10% percent more than the 2025 AEWR. The 2025 AEWR for Florida (based on 2024 FLS survey data) was $16.23, and the OEWS 90^th percentile wage for the occupation in 2024 was $17.81, just under 10% more than the FLS wage.

Since the OEWS already reports the 90th percentile wage, DOL would not have to do any complicated arithmetic when setting AEWRs. While still inadequate as compared to using FLS data, setting the AEWR at the 90^th percentile wage would help adjust for the fact that the OEWS only surveys non-farm employers that pay much lower wages to farmworkers and excludes directly-employed farmworkers. Setting the AEWR at the 90^th percentile wage, with a roughly 10% increase that results relative to the FLS data set of the same year in the main OEWS farmworker occupation in these two significant examples, would also help adjust for the fact that fringe benefits are not included in OEWS data—and help compensate for DOL’s ill-advised housing deductions—in either case making it a fairer wage vis-à-vis U.S. farmworkers, and going further to ensure that U.S. workers are adequately recruited and do not suffer adverse impacts. The 90^th percentile would also help protect the higher earners in farm occupations, rather than creating a de facto cap on H-2A earnings at the 50^th percentile (median) wage, which adversely impacts higher earners in the occupation. It must also be noted that 2024 OEWS wages are being used to set 2026 AEWRs in the IFR, despite being two years behind and not adjusted for inflation. If this recommendation is adopted, the 90^th percentile AEWRs should also be adjusted for inflation using the CBO’s projections in the Employment Cost Index, or by the annual average real increase in farmworker wages for the past five or ten years, if the OEWS wage data used are from years prior to the year for which they will be used to set the AEWR. (In other words the 2024 OEWS-based AEWRs should be adjusted for inflation to their projected real value in 2026, etc.)

Conclusion

There is no evidence to suggest that farmworkers overall have been overpaid or that the AEWR rates that H-2A workers have been paid are too high and unsustainable for farm operators to earn a profit. In fact, the evidence presented in this comment shows the opposite is true—that farmworkers are underpaid according to a number of metrics and their wages have far to go before they can reach levels that would make them comparable to workers employed outside of the agricultural industry. In addition, as USDA has pointed out, the modest increases in farm wages have been “offset” by productivity and output prices, so that “labor costs as a share of gross cash farm income have not shown an upward trend for the sector (as a whole) over the past 20 years.”{{65}} Farmers have virtually exponentially increased their use of the H-2A program under the previous AEWR methodology—in fact its use and popularity is at an all-time high—contradicting DOL’s claims that the program needs radical changes to be sustainable for farm operators. As a result, DOL has not shown an adequate justification for sharply cutting the wages of H-2A farmworkers—or for lowering wages and reducing opportunities for U.S. farmworkers, which will inevitably result if the IFR is allowed to stay in place. In addition, The Administrative Procedure Act requires DOL to provide more notice and an opportunity for the public to comment—and must devise additional analyses and estimates regarding impacted stakeholders—before it can make such a radical change to a program that will impact the entire agricultural industry.

We urge DOL to resist the pressure from agribusiness to intentionally degrade wages and standards in the agricultural industry. Instead, we urge DOL to rescind the IFR and focus its efforts on protecting labor, health, and safety standards and worker rights for farmworkers, regardless of their immigration status, by vigorously enforcing the labor and employment laws that are applicable to farm operators.

Daniel Costa
Director of Immigration Law and Policy Research
Economic Policy Institute

Endnotes 

{{1.}} As counted by the latest Census of Agriculture from the U.S. Department of Agriculture, 2022.

{{2.}} See Daniel Costa and Ben Zipperer, “Trump’s new H-2A wage rule will radically cut the wages of all farmworkers: New estimates show farmworkers stand to lose $4.4 to $5.4 billion annually under DOL’s updated Adverse Effect Wage Rate,” Working Economics blog (Economic Policy Institute), November 26, 2025.

{{3.}} Wenson Fung, Kimberly Prado, Amanda Gold, Andrew Padovani, Daniel Carroll, and Emily Finchum-Mason, Findings from the National Agricultural Workers Survey (NAWS) 2021–2022: A Demographic and Employment Profile of United States Crop Workers, Research Report no. 17, JBS International for the Employment and Training Administration, U.S. Department of Labor. September 2023.

{{4.}} See National Agricultural Statistics Service, “Agricultural (Farm) Labor,” for more background and to access Farm Labor Reports, U.S. Department of Agriculture.

{{5.}} Federal Policy Watch, “USDA ends the Agricultural (Farm) Labor Survey, the U.S.’s only survey of agricultural employers,” Economic Policy Institute, September 3, 2025.

{{6.}} Economic Policy Institute, State of Working America Data Library, “Hourly wage, average – Average real hourly wage (2024$),” 2025.

{{7.}} Economic Research Service, “Wages of Hired Farmworkers” in “Farm Labor,” U.S. Department of Agriculture, Updated November 18, 2025.

{{8.}} Wenson Fung, Kimberly Prado, Amanda Gold, Andrew Padovani, Daniel Carroll, and Emily Finchum-Mason, Findings from the National Agricultural Workers Survey (NAWS) 2021–2022: A Demographic and Employment Profile of United States Crop Workers, Research Report no. 17, JBS International for the Employment and Training Administration, U.S. Department of Labor. September 2023.

{{9.}} Veronica Nigh, “AEWR Methodology Change a Blow to Growers,” Market Intel, American Farm Bureau, March 30, 2023; American Hort, “Why You Can Expect Steep H-2A Wage Increases in 2022,” Greenhouse Grower, December 11, 2021.

{{10.}} Employment and Training Administration, Adverse Effect Wage Rate Methodology for the Temporary Employment of H-2A Nonimmigrants in Non-Range Occupations in the United States, U.S. Department of Labor, Interim Final Rule, 90 Fed. Reg. 47914, at 47923 (October 2, 2025).

{{11.}} Comments of Craig Regelbrugge in American Hort, “Why You Can Expect Steep H-2A Wage Increases in 2022,” Greenhouse Grower, December 11, 2021.

{{12.}} EPI analysis of Adverse Effect Wage Rates for 2021 and 2022 for the listed states; AEWRs are from the Employment and Training Administration, U.S. Department of Labor. All values have been adjusted to constant 2022 dollars using the Consumer Price Index (CPI-U). See also discussion and tables in Daniel Costa, “Testimony prepared for the U.S. Senate Committee on the Judiciary for a hearing on ‘From Farm to Table, Immigrant Workers Get the Job Done,’” Economic Policy Institute, May 31, 2023.

{{13.}} U.S. Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers: Food in U.S. City Average [CPIUFDSL], retrieved from FRED, Federal Reserve Bank of St. Louis, last accessed November 26, 2025.

{{14.}} Economic Research Service, “Wages of Hired Farmworkers” in “Farm Labor,” U.S. Department of Agriculture, Updated November 18, 2025.

{{15.}} 5 U.S.C. § 553(b)(B)

{{16.}} Sorenson Commc’ns Inc. v. FCC, 755 F.3d 702, 706 (D.C. Cir. 2014).

{{17.}} Mack Trucks, Inc. v. EPA, 682 F.3d 87, 93 (D.C. Cir. 2012).

{{18.}} Wenson Fung, Kimberly Prado, Amanda Gold, Andrew Padovani, Daniel Carroll, and Emily Finchum-Mason, Findings from the National Agricultural Workers Survey (NAWS) 2021–2022: A Demographic and Employment Profile of United States Crop Workers, Research Report no. 17, JBS International for the Employment and Training Administration, U.S. Department of Labor. September 2023.

{{19.}} Jake Traylor, Myah Ward and Samuel Benson, “‘I really feel for her’: Brooke Rollins’ impossible Trump administration mandate,” Politico, July 10, 2025; Marcia Brown, “Ag secretary says able-bodied Medicaid recipients should replace immigrant farm workforce,” Politico, July 8, 2025.

{{20.}} Joseph Gedeon, “US agriculture secretary says Medicaid recipients can replace deported farm workers,” The Guardian, July 9, 2025.

{{21.}} See National Agricultural Statistics Service, “NASS discontinues select data collection programs and reports,” United States Department of Agriculture, August 28, 2025; for additional background see Federal Policy Watch, “USDA ends the Agricultural (Farm) Labor Survey, the U.S.’s only survey of agricultural employers,” Economic Policy Institute, September 2, 2025.

{{22.}} See Rural Migration News, “California: FLC Employment Down and Wages Up in 2020,” U.C. Davis, July 16, 2021. According to the latest data available from DOL’s Quarterly Census of Employment and Wages, in 2024, directly hired crop farmworkers in California earned $905 per week, as compared to crop farmworkers employed by farm labor contractors (FLCs) who earned $649, or 72% of what directly-employed crop farmworkers earned. Nationwide in 2024, FLC employees earned 76% of what directly-employed crop farmworkers earned: $862 vs $655. See industry codes 111 (Crop production) and 115115 (Farm labor contractors and crew leaders).

{{23.}} See just one of many examples of reporting on this phenomenon: Felicia Mello and Wendy Fry, “State inspectors are supposed to visit all farmworker housing to ensure its safety. Sometimes they used FaceTime instead,” July 1, 2024.

{{24.}} Office of Foreign Labor Certification, Performance Data, Employment and Training Administration, U.S. Department of Labor [fiscal year 2024 data file for H-2A], last accessed November 25, 2025.

{{25.}} Wenson Fung, Kimberly Prado, Amanda Gold, Andrew Padovani, Daniel Carroll, and Emily Finchum-Mason, Findings from the National Agricultural Workers Survey (NAWS) 2021–2022: A Demographic and Employment Profile of United States Crop Workers, Research Report no. 17, JBS International for the Employment and Training Administration, U.S. Department of Labor. September 2023.

{{26.}} Zachariah Rutledge, Marcelo Castillo, Timothy J. Richards, Philip Martin, “H-2A Adverse Effect Wage Rates and U.S. farm wages,” American Journal of Agricultural Economics, first published June 9, 2025, https://doi.org/10.1111/ajae.12557.

{{27.}} For the full methodology, see the appendix in Daniel Costa and Ben Zipperer, “Trump’s new H-2A wage rule will radically cut the wages of all farmworkers: New estimates show farmworkers stand to lose $4.4 to $5.4 billion annually under DOL’s updated Adverse Effect Wage Rate,” Working Economics blog (Economic Policy Institute), November 26, 2025.

{{28.}} Given that U.S. workers typically do not experience nominal wage reductions, employers may implement the new lower pay rates for U.S. workers through wage freezes that are gradually eroded by inflation. At the same time, the high degree of churn and seasonality of farmworker jobs and the presence of a large contractor workforce may allow employers the opportunity to reduce U.S. wages more rapidly than would be the case in other sectors.

{{29.}} See discussion in Daniel Costa, The H-2B temporary foreign worker program: For labor shortages or cheap, temporary labor? Economic Policy Institute, January 19, 2016.

{{30.}} 90 Fed. Reg. 47941.

{{31.}} 90 Fed. Reg. 47955.

{{32.}} 7 U.S.C. § 2204

{{33.}} USDA, Farm Employment Estimates, 1910 Census: Volume 5, Agriculture (1913).

{{34.}} See Adverse Effect Wage Rate Methodology for the Temporary Employment of H-2A Nonimmigrants in Non-Range Occupations in the United States, 86 Fed. Reg. at 68178; Temporary Agricultural Employment of H-2A Aliens in the United States, Final Rule, 75 Fed. Reg. at 6898.

{{35.}} The most recent edition of the National Agricultural Workers Survey showed that in 2021-22, 78% of non-H-2A crop farmworkers worked directly for a farm employer (see page 25).

{{36.}} See Rural Migration News, “California: FLC Employment Down and Wages Up in 2020,” U.C. Davis, July 16, 2021. According to the latest data available from DOL’s Quarterly Census of Employment and Wages, in 2024, directly hired crop farmworkers in California earned $905 per week, as compared to crop farmworkers employed by farm labor contractors (FLCs) who earned $649, or 72% of what directly-employed crop farmworkers earned. Nationwide in 2024, FLC employees earned 76% of what directly-employed crop farmworkers earned: $862 vs $655. See industry codes 111 (Crop production) and 115115 (Farm labor contractors and crew leaders).

{{37.}} A number of studies show a wage penalty for subcontracted/outsourced workers. For example, see Arindrajit Dube and Ethan Kaplan, “Does Outsourcing Reduce Wages in the Low-Wage Service Occupations? Evidence from Janitors and Guards,” Cornell University ILR Review. January 1, 2010); Deborah Goldschmidt and Johannes Schmieder, “The Rise of Domestic Outsourcing and the Evolution of the German Wage Structure,” The Quarterly Journal of Economics, Oxford University Press, vol. 132(3), 2017, pages 1165-1217; Andres Drenik, Simon Jäger, Pascuel Plotkin, and Benjamin Schoefer “Paying Outsourced Labor: Direct Evidence from Linked Temp Agency-Worker-Client Data,” Econometrics Laboratory, University of California, Berkeley, September 2020.

{{38.}} Daniel Costa, Philip Martin, and Zachariah Rutledge, Federal Labor Standards Enforcement in Agriculture: Data Reveal the Biggest Violators and Raise New Questions About How to Improve and Target Efforts to Protect Farmworkers, Economic Policy Institute, December 2020.

{{39.}} Congressional Budget Office, data supplement for CBO’s September 2025 report, CBO’s Current View of the Economy From 2025 to 2028, available at https://www.cbo.gov/system/files/2025-09/51135-2025-09-Economic-Projections.xlsx

{{40.}} See Figure A in Daniel Costa and Philip Martin, Coronavirus and farmworkers: Farm employment, safety issues, and the H-2A guestworker program, Economic Policy Institute, March 24, 2020.

{{41.}} Temporary Agricultural Employment of H-2A Aliens in the United States, 74 Fed. Reg. 45905, 45911 (proposed Sept. 4, 2009).

{{42.}} Immigration and Nationality Act (INA) §212(p)(4).

{{43.}} See CATA v Solis, p. 36-37, AILA Infonet Doc No. 10100169. (Posted 10/01/10).

{{44.}} Immigration and Nationality Act (INA) §212(p)(4).

{{45.}} Daniel Costa and Ron Hira, H-1B visas and prevailing wage levels: A majority of H-1B employers—including major U.S. tech firms—use the program to pay migrant workers well below market wages, Economic Policy Institute, May 4, 2020.

{{46.}} Daniel Costa and Ron Hira, H-1B visas and prevailing wage levels: A majority of H-1B employers—including major U.S. tech firms—use the program to pay migrant workers well below market wages, Economic Policy Institute, May 4, 2020.

{{47.}} 75 Fed. Reg. 61580.

{{48.}} 75 Fed. Reg. 61580, see n.2.

{{49.}} 75 Fed. Reg. 61580.

{{50.}} 75 Fed. Reg. 61580.

{{51.}} Congressional Budget Office, data supplement for CBO’s September 2025 report, CBO’s Current View of the Economy From 2025 to 2028, available at https://www.cbo.gov/system/files/2025-09/51135-2025-09-Economic-Projections.xlsx

{{52.}} 90 Fed. Reg. 47963.

{{53.}} See Figure B and discussion in Daniel Costa and Ron Hira, “EPI comment on DOL’s RFI regarding Schedule A modernization,” Economic Policy Institute, Public Comments, May 13, 2024. Submitted online via https://www.federalregister.gov/documents/2024/02/15/2024-03187/labor-certification-for-permanent-employment-of-foreign-workers-in-the-united-states-modernizing

{{54.}} See Wage and Hour Division, “Agriculture” [data tables], U.S. Department of Labor, accessed November 2025, and discussion of previous years in Daniel Costa and Philip Martin, Record-low number of federal wage and hour investigations of farms in 2022: Congress must increase funding for labor standards enforcement to protect farmworkers, Economic Policy Institute, August 22, 2023.

{{55.}} Jake Barnes, Janice Fine, Daniel J. Galvin, Jenn Round, Hana Shepherd, To Help U.S. Workers, We Need Labor Standards Enforcement, Not Mass Deportations, Data Brief, Workplace Justice Lab, Rutgers University, May 2025.

{{56.}} Daniel Costa and Philip Martin, Record-low number of federal wage and hour investigations of farms in 2022: Congress must increase funding for labor standards enforcement to protect farmworkers, Economic Policy Institute, August 22, 2023.

{{57.}} See Adverse Effect Wage Rate Methodology for the Temporary Employment of H-2A Nonimmigrants in Non-Range Occupations in the United States, 86 Fed. Reg. at 68178; Temporary Agricultural Employment of H-2A Aliens in the United States; Final Rule, 75 Fed. Reg. at 6898.

{{58.}} Daniel Costa and Ron Hira, “EPI comments on DOL Request for Information on determining prevailing wage levels for H-1B visas and permanent labor certifications for green cards,” Economic Policy Institute, June 1, 2021, public comment submitted for Request for Information on Data Sources and Methods for Determining Prevailing Wage Levels for the Temporary and Permanent Employment of Certain Immigrants and Non-Immigrants in the United States, Request for Information, DOL Docket No. ETA-2021-0003, RIN: 1205-AC00. Regarding the OEWS and agricultural wages, see Daniel Costa, “EPI comments on DOL’s proposed changes to the Adverse Effect Wage Rate methodology for H-2A visas for temporary migrant farmworkers,” Economic Policy Institute, January 31, 2022, public comment submitted for Adverse Effect Wage Rate Methodology for the Temporary Employment of H-2A Nonimmigrants in Non-Range Occupations in the United States, RIN: 1205-AC05, DOL Docket No. ETA-ETA-2021-0006.

{{59.}} Immigration and Nationality Act (INA) §212(p)(4).

{{60.}} Congressional Budget Office, data supplement for CBO’s September 2025 report, CBO’s Current View of the Economy From 2025 to 2028, available at https://www.cbo.gov/system/files/2025-09/51135-2025-09-Economic-Projections.xlsx

{{61.}} Employment and Training Administration, Adverse Effect Wage Rate Methodology for the Temporary Employment of H-2A Nonimmigrants in Non-Range Occupations in the United States, U.S. Department of Labor, 20 CFR Part 655, DOL Docket No. ETA-2019-0007, RIN 1205-AB89 (November 5, 2020).

{{62.}} Employment and Training Administration, Adverse Effect Wage Rate Methodology for the Temporary Employment of H-2A Nonimmigrants in Non-Range Occupations in the United States, U.S. Department of Labor, final rule, 20 CFR Part 655, DOL Docket No. ETA-2021-0006, RIN 1205-AC05 (February 28, 2023).

{{63.}} Judgment, Teche Vermilion Sugar Cane Growers Ass’n Inc. v. Su, No. 6:23-cv-00831-RRS-CBW (W.D.La. Aug. 21, 2025), ECF No. 87.

{{64.}} OEWS data for 2024: https://data.bls.gov/oes/#/area/0600000

{{65.}} Economic Research Service, “Labor Cost Share of Total Gross Revenues,” in “Farm Labor,” U.S. Department of Agriculture, Updated November 18, 2025.

Business and Foreign Workers Division
Office of Policy and Strategy, USCIS
U.S. Department of Homeland Security
5900 Capital Gateway Drive
Camp Springs, MD 20746

RE: Department of Homeland Security, Weighted Selection Process for Registrants and Petitioners Seeking To File Cap-Subject H–1B Petitions, Notice of proposed rulemaking, CIS Docket No. 2820-25, DHS Docket No. USCIS-2025-0040, RIN: 1615-AD01

The Economic Policy Institute (EPI) is a nonprofit, nonpartisan think tank established in 1986 to include the needs of low- and middle-income workers in economic policy discussions. EPI conducts research and analysis on the economic status of working America, proposes public policies that protect and improve the economic conditions of low- and middle-income workers—regardless of immigration status—and assesses policies with respect to how well they further those goals. EPI submits these comments to the U.S. Department of Homeland Security (DHS) and its subagency, U.S. Citizenship and Immigration Services (USCIS), in response to their Notice of Proposed Rulemaking (NPRM) regarding the visa allocation process for H-1B visas. The proposed rule takes the current equal weighting random allocation process —often referred to as the H-1B “lottery”— for visas when more petitions than the number of visas available are filed when the application window opens, and modifies it to allocate H-1B visas to employers based on a weighted selection process that would generally favor the allocation of H-1B visas to higher skilled and higher paid applicants.

EPI has researched, written, and commented extensively on the U.S. system for labor migration, including in particular the H-1B program and other temporary work visa programs. EPI published a lengthy piece of research detailing the need to improve the way the U.S. Department of Labor (DOL) sets the H-1B wage levels,{{1}} which we coauthored and have annexed to this comment as a separate PDF file. The report, however, did not address the flawed manner in which H-1B visas are allocated; a problem that goes hand-in-hand with H-1B prevailing wage levels that have been set artificially low for many years.

In 2016, President Donald Trump campaigned on reforming the H-1B program and immediately promised to do so after becoming president-elect. Yet virtually no substantive action was taken until just weeks before the 2020 election. At that time, the U.S. Department of Labor (DOL) and USCIS/DHS issued three rules, a DOL Interim Final Rule (IFR) updating the H-1B prevailing wage levels,{{2}} a USCIS IFR modifying the definition of H-1B “specialty occupation,”{{3}} and an NPRM, on the H-1B allocation process by lottery.{{4}} While DHS and DOL have the requisite legal authority to make these regulatory changes, the timing and process of their issuance made them susceptible to procedural legal challenges. On December 1, 2020, a federal court in California struck down both the DOL prevailing wage IFR and USCIS IFR.{{5}} During his 2020 campaign, President Biden’s immigration plan stated he would “reform temporary visas to establish a wage-based allocation process and establish enforcement mechanisms to ensure they are aligned with the labor market and not used to undermine wages,”{{6}} but the Biden administration never took any steps to propose an updated allocation scheme for H-1B visas to implement that campaign promise.

EPI generally supports the main substance of this NPRM and believes it improves the current allocation process for H-1B visas, which is random and susceptible to companies that have learned how to “game the system” to unfairly obtain large numbers of H-1B visas at the expense of other companies seeking to hire H-1B workers. We do not believe that it is the best method for allocating visas because high shares of petitions will still be awarded to firms paying their H-1B workers at below-median wage rates, but it is reasonable and preferable to the status quo. If the NPRM or final rule issued pursuant to this NPRM is challenged in court based on DHS’s interpretation of the statute that establishes how H-1B visas are allocated, then DHS should consider alternate methods to achieve the same goal of allocating visas by wage levels. These comments will suggest one alternative way to do it.

This proposed rule will incentivize H-1B employers to pay their migrant worker employees at fairer wage rates that are commensurate with local U.S. wage standards and result in rewarding employers that recruit and hire higher-skilled workers and pay higher salaries with additional visas and workers. That in turn will improve the program by reducing the number of H-1B workers who are underpaid according to U.S. wage standards—but without reducing the overall number H-1B visas that are issued—and will also better protect the wages of similarly situated U.S. workers. The proposed rule will also increase the overall skill mix and quality of the pool of H-1B workers, thereby boosting the impact of the H-1B program on the U.S. economy. As a result, the proposed rule helps address a major critique EPI has long held about the program—that it is exploited by firms that use it to legally undercut U.S. wage standards—and which Members of Congress from both major parties have attempted to address through proposed bipartisan legislation to reform H-1B, which includes a preference allocation system for H-1B visas, one that is more detailed and includes additional factors based on other policy priorities, unlike the one in the proposed rule based on a weighting of wage levels).{{7}}

It must also be noted at the outset of these comments that actions taken both recently and in 2020 by federal agencies with respect to wages for migrant workers in temporary work visa programs have been inconsistent and confusing. While DOL took action with its 2020 proposal and IFR that—if it had not been struck down—would have raised wage rates for underpaid migrant workers in the H-1B, H-1B1, and E-3 visa programs, DOL almost simultaneously issued a new wage rule for the H-2A program that would have cut wages for the migrant farmworkers in that program.{{8}} DOL has now in 2025 again issued another rule for H-2A visas that will drastically cut the wages of farmworkers and lead to billions of dollars in wages being transferred from poor farmworkers to farm owners and operators, and lead to reduced opportunities for U.S. farmworkers, including the 30% of farmworkers who are U.S.-born citizens.{{9}} This is troubling and misguided, especially considering that DHS at the end of the first Trump administration had determined that farmworkers were part of the U.S.’s critical infrastructure workforce, and the Department of State has designated H-2A workers as “a national security priority”—because of their contribution to stabilizing the food supply chain during the Coronavirus pandemic.

Both DHS and DOL should issue regulations that lead to improved labor standards and higher wages for all work visa programs, and not treat workers differently based on their education levels, occupations, and nationalities. All temporary migrant workers deserve to be paid fairly for their labor and no work visa programs should operate essentially as employment law loopholes that permit employers to legally underpay migrant workers.

The first major section of these comments addresses the flaws in the current H-1B program, and the second section specifically addresses elements of the NPRM.

The H-1B program is an important avenue for attracting skilled, talented workers from abroad—but is deeply flawed and in desperate need of reform

The H-1B program provides temporary, nonimmigrant U.S. work visas for college-educated workers and fashion models from abroad. While no one can deny the importance of attracting skilled, talented workers to the United States, the reality is that some of the biggest beneficiaries of the H-1B program are outsourcing companies that have hijacked the system—using it to pay low wages, replace thousands of U.S. workers with much-lower-paid H-1B workers, and to send decent-paying technology jobs abroad.{{10}} Outsourcing companies, however, are not the only abusers of the system: The vast majority of employers who use H-1B visas are legally allowed to pay their H-1B workers at wage levels below the local median wage for the occupation.

The major structural, programmatic flaws in H-1B are the following:

U.S. employers do not have to recruit U.S. workers before hiring H-1B workers

Employers and corporate lobby groups claim that they use the H-1B primarily to bring in the “best and brightest” workers from abroad to fill labor shortages when they can’t find willing and available U.S. workers, especially in science, technology, engineering, and math fields (STEM), but the reality is that:

• Under current law, employers are not required to recruit and hire U.S. workers or prove they are experiencing a labor shortage before hiring H-1B workers.
• “H-1B-dependent” employers—those filling 15% or more of their U.S. jobs with H-1B workers—are required to recruit U.S. workers first, but they all get around the requirement by exploiting a cheap and easy loophole: they can hire an H-1B worker without recruiting U.S. workers if the H-1B worker holds a master’s degree or receives an annual salary of over $60,000.
  • For comparison, $60,000 per year is $56,810 less than the national average wage for all workers employed in computer occupations.{{11}} Analysis of the FY 2024 DOL Labor Condition Application disclosure data shows that employers exempt themselves from recruiting U.S. workers for effectively all of H-1B positions (over 99%).{{12}}

U.S. employers can legally underpay H-1B workers

For years, corporate lobbyists and other H-1B proponents have claimed that H-1B workers cannot be paid less than U.S. workers because employers must pay H-1B workers no less than the “prevailing wage.” That is true only as a tautology. The reality is:

• Employers have the option of paying the prevailing Level 1 “entry-level” wage or Level 2 wage, which are between 20-40% less than the local median wage (Level 3) that employers pay workers in the occupation in the local region.
• As DHS notes in Table 12 of this draft rule, the five-year average of cap-subject beneficiaries who were paid at the two lowest wage levels—both of which are set below the local median wage—was 83% for fiscal years 2020-2024.
• While the wage level is supposed to correspond to the H-1B worker’s education and experience, in practice the employer gets to choose the wage level and the government doesn’t verify whether the two reasonably correspond to each other.

H-1B workers are often exploited and some arrive to the United States in debt after paying hefty recruitment fees

H-1B workers sometimes pay hefty fees to labor recruiters, which means that many arrive virtually indentured to their employer, fearing retaliation and termination if they speak out about workplace abuses or unpaid wages. And widespread abuses have been documented—even human trafficking and severe financial bondage.{{13}}

H-1B workers do not have sufficient job mobility between employers

The H-1B visa itself is owned and controlled by the employer; an H-1B worker who is fired or laid off for any reason becomes deportable unless they can find new employment within 60 days. This arrangement results in a form of indentured servitude.{{14}} During waves of mass layoffs in the tech industry, numerous stories have been publicly reported about the precarious situations and impossible choices that thousands of H-1B workers are left to face.{{15}} Thus, H-1B workers have good reason to fear retaliation and deportation if they speak up about wage theft, workplace abuses, or other working conditions like substandard health and safety procedures on the job. While H-1B workers have the ability to switch jobs if they can find another employer willing to petition for a new visa for them (sometimes referred to as “portability”), and have 60 days to find a new employer if they are fired, these avenues are not straightforward enough and inadequate to mitigate the power that employers have over the right of their H-1B workers to remain employed in the United States.{{16}} These protections should be improved.

H-1B workers are not allowed to self-petition for lawful permanent residence

The ability of H-1B workers to become lawful permanent residents and remain in the United States is entirely at the whim of their employers. Even after working for an employer for six years in H-1B status, the employer has the power to decide if an H-1B worker can remain in the country—in many cases after an H-1B worker has established firm roots in the United States. That power keeps H-1B workers from complaining and asserting their employment rights. To remedy this wrong, H-1B workers should be allowed to petition on their own for permanent residence after a short provisional period—no longer than 18 months—and independent from their employer.

Outsourcing companies are using the H-1B program to underpay H-1B workers, replace U.S. workers, and send tech jobs abroad

As we have documented in the annexed report and numerous other commentaries and testimonies, roughly half of the top 30 employers of H-1B workers in most years are not innovative high-tech firms like Apple and Google.{{17}} Some of the biggest users of the H-1B visa are staffing firms that specialize in information technology (IT) and accounting and that pay H-1B workers the lowest wages legally allowed, and outsource their H-1B employees to third-party firms. Some of those firms also have a business model dependent on sending jobs offshore where labor costs are lower.

Typically in this scenario, H-1B workers do computer and engineering work at the office of a U.S. employer but are employed by an outsourcing company, some of which are based abroad or have major operations abroad.{{18}} The many reported cases of U.S. workers being laid off and replaced by H-1B workers have all been facilitated by this arrangement. In multiple incidents, the H-1B workers have been hired with annual wages of around $30,000 to $40,000 less than the workers they have replaced. Before they are laid off, the U.S. workers are often forced to train their own H-1B replacements as a condition of their severance packages; this is euphemistically known as “knowledge transfer.” Major, profitable U.S. employers like Disney and Toys “R” Us—as well as public employers and institutions like the University of California and regulated utilities like Southern California Edison and Northeast Utilities—have laid off thousands of U.S. workers who were forced to train their own replacements. Eventually, many of the outsourced jobs that are filled by H-1B workers get moved offshore.{{19}}

Contrary to the popular narrative proffered by corporations that support expanding and deregulating the H-1B visa program—the staffing firms that use H-1B visas are not using them to keep technology jobs in the United States—instead they are using them precisely to facilitate the offshoring of as many of those jobs as they can. That is in fact, the business model of those firms. News reports, including from Bloomberg and the New York Times, have shown that outsourcing companies “game the system” in order to obtain a high share of H-1B visas, which leaves fewer available for the firms that directly employ H-1B workers.{{20}}

Allowing outsourcing companies to hire H-1B workers lets employers utilize the immigration system to degrade labor standards for skilled workers—as a result, they should be barred from obtaining H-1B visas

The outsourcing/staffing model of employment generally may increase the incidence of employment law violations by separating the main beneficiary of the labor provided by H-1B workers—the third-party firm that hires the outsourcing firm, i.e. the “lead” employer—from the H-1B workers who perform the work. Firms that rely on outsourced H-1B workers are a textbook (if extreme) example of what former DOL Wage and Hour administrator David Weil calls a “fissured” workplace, where the relationship between the worker and the lead employer is fissured, or broken, via the use of a temp agency or subcontractor{{21}} (in this case the H-1B outsourcing firm). Research shows that fissuring leads to a wage penalty for workers who are subcontracted, employed as temps, and work for staffing firms,{{22}} in part because the subcontractor keeps a percentage of the wages earned by the workers. It is also common knowledge that employers use this model to avoid paying for benefits like health care, retirement funds, and to avoid liability for labor violations. Because the staffing and outsourcing model contributes to the fissuring of the labor market, it should not be allowed as part of the U.S. immigration system—not in H-1B or in any other temporary or permanent immigration programs.

Analysis of the NPRM, “Weighted Selection Process for Registrants and Petitioners Seeking to File Cap-Subject H-1B Petitions”: Updating the H-1B lottery

We now turn to the NPRM, which proposes to update the random lottery allocation system for cap-subject H-1B petitions. The H-1B statute at 8 USC §1184(g)(3) requires that H-1B visas or statuses “be issued … in the order in which petitions are filed for such visas or status.” However, the practical realities of the H-1B annual numerical limit or “cap” and the way that USCIS receives petitions for H-1B visas, renders this impossible to implement in practice—leaving USCIS little choice other than to propose a rational alternative that is consistent with the broader goals and intent of the H-1B statute.

There is no feasible way for USCIS to meet the statutory requirement of allocating H-1B visas “in the order in which petitions are filed.”

At present, when demand for H-1B visas immediately exceeds the annual limit of 65,000 for cap-subject petitions and annual limit of 20,000 visas reserved for foreign graduates of U.S. universities who have obtained at least a master’s degree—USCIS allocates the visas by a random lottery where each petition has an equal chance of being approved, regardless of occupation, region, or that salary that will be paid to the H-1B worker. This process is utilized because, since fiscal year 2014, USCIS has received far more H-1B petitions that are subject to the annual cap in the first five days of the eighteen-month application window, than the 85,000 available slots for that fiscal year. Since so many petitions are submitted to USCIS nearly simultaneously, it is impossible for USCIS to determine the order in which the petitions were filed, a necessary prerequisite to adequately comply with the H-1B statute’s requirement that H-1B visas or statuses be allocated to employers “in the order in which [those] petitions [were] filed for such visas or status.” Therefore, USCIS allocates them at random via an electronic lottery, which appears to be a choice of convenience and not a well-reasoned response to a phenomenon unanticipated by the statute. The process has been in place since FY 2008.

However, considering the ambiguity of 8 USC §1184(g)(3) and the fact that the letter of the statute cannot be adhered to in practical terms, other interpretations about how to allocate H-1B visas can be equally reasonable so long as they are consistent with the intent of the H-1B statute.

The prevailing wage and its enforcement is the most important protection for labor standards in the H-1B program

DHS should measure the merits of any allocation scheme based on how well it advances the administrative efforts to meet the H-1B program’s intent, “to help employers who cannot otherwise obtain needed business skills and abilities from the U.S. workforce.”{{23}} As we’ve described above, and elsewhere, one of the most effective ways for the H-1B program to meet this intent is to employ a labor market test that includes good faith recruitment from the U.S. domestic supply and a requirement that employers hire qualified applicants before an H-1B application is approved. Absent a labor market test, under current law, DHS and other agencies involved in H-1B governance, DOL, the State Department, and the Department of Justice (DOJ), should craft rules to move the program closer to fulfilling its intent. 

The current allocation scheme, based on a random lottery, undermines the government’s efforts to fulfill the program’s intent. Replacing it with a better scheme, as proposed by the NPRM, would improve program outcomes: better addressing labor shortages and increasing the overall skills of the H-1B worker population.

As DHS drafts its final rule, the agency should consider and rank alternate allocation schemes based on how well their outcomes meet the program’s purpose. Allocation schemes that do a better job at filling pressing labor shortages should be ranked higher. Since there is no direct way to measure the severity of labor shortages, proxy measures must be used. The best proxy for this purpose is the migrant worker’s wage premium compared to comparable U.S. workers. The larger the wage premium, the more likely it is that the migrant worker brings specialized skills that cannot otherwise be obtained from the U.S. workforce. Migrant workers earning larger premiums are more likely to complement, rather than compete with, U.S. workers.

The prevailing wage is the most important worker protection in the H-1B program and its effective administration is essential. The H-1B program laws and rules specify that the prevailing wage for each position is calculated using three attributes: (1) occupational classification; (2) worksite geography; and (3) level. The employer selects these three variables based on the position description they are trying to fill, not the actual worker’s skills. In virtually all Labor Condition Application (LCA) filings, employers use the Office of Foreign Labor Certification (OFLC) Occupational Employment and Wage Statistics (OEWS) data or a private wage survey to determine the position’s prevailing wage, rather than requesting that one be provided by the National Prevailing Wage Center, as employers are permitted to do.

Allowing employers to interpret the key factors that determine the prevailing wage introduces errors. First, employers interpret the occupation and level differently, even in cases when they position is the same. Further, granting employers substantial front-end discretion over choices when they have significant conflicts of interest invites widespread non-compliance, which can only be remedied through strong back-end enforcement. But the government’s back-end enforcement has been nonexistent. DHS’ worksite visits and Requests for Evidence may have improved compliance with (2) worksite geography. However, no government agency ever ensures that the employer’s choice of (1) occupational classification and (3) level, accurately reflects the position being filled, or the H-1B worker’s actual activities in the position. Any employer that misclassifies the occupation or level, or both, significantly undermines program integrity, regardless of whether the misclassification is intentional or inadvertent. Public disclosure data indicate that some employers are likely exploiting these vulnerabilities on a mass scale, stealing wages from H-1B and U.S. workers alike.

Examples from existing H-1B data demonstrate the failure of the government’s prevailing wage regulations in achieving their raison d’être, which is protecting workers, labor standards, and the integrity of the labor market.

Take this first example which comes from one of Microsoft’s H-1B employees, which can be found at DOL LCA Case Number I-200-23087-882196, and which was selected and approved by USCIS for an H-1B visa in the FY 2024 lottery.{{24}}

Table 1

Microsoft, one of the top ten H-1B employers, placed a 35-year-old worker with a doctorate degree into a position it classified at Wage Level 1. Based on their age, the H-1B visa recipient likely has at least 7 years of experience in addition to holding a doctoral degree. Yet, they are filling an entry-level position, one that, according to DOL’s prevailing wage guidance, would be appropriate for an “internship” or a “worker in training.”{{25}} This appears to be an example of wage-level misclassification that can only be remedied through tighter rules and stronger enforcement.

The second example is for one of Deloitte’s H-1B positions, which can be found at DOL LCA Case Number I-200-23258-349652, which was certified by DOL in FY 2023.{{26}}

Table 2

Deloitte Consulting, another one of the top ten H-1B employers, classified its Senior Consultant job in Philadelphia as an entry-level position, one that, according to DOL’s prevailing wage guidance, would be appropriate for an “internship” or a “worker in training.” Classifying a Senior Consultant at Wage Level I directly conflicts with DOL guidance that states that job titles with “‘senior’ (e.g., senior programmer)” should be classified at Wage Level III. Yet, the DOL certified the LCA despite the employer’s apparent wage-level misclassification.

The Deloitte case also highlights problems with the wage surveys used to source prevailing wages. In this case, the corresponding prevailing wage for Standard Occupational Code (SOC) 15-1299.08 (Computer Systems Engineers/Architects) is extremely low by any benchmark. The National Association of Colleges and Employers (NACE), a professional association of university-based career services officers and business campus recruiters, conducts regular wage surveys of recent bachelor’s degree graduates across the country. For the class of 2024, the average starting salary for computer and information sciences majors was $88,907.{{27}} The DOL H-1B prevailing wage of $61,838 is $27,000 less, offering Deloitte a 30% discount over the market rate for recent graduates.

This demonstrates how lax DOL oversight and guidance on employers’ occupational code choices can lead to market distortions. Had Deloitte selected SOC 15-1252, Software Developers, which has a similar occupational profile, the prevailing wage rate it would have been required to pay was 30% higher.

Given these operational realities, DOL and DHS should make it a priority to implement a comprehensive back-end compliance system that includes random audits, to validate that the occupation and prevailing wage level accurately match the H-1B worker’s actual activities in the position. Given DOL’s expertise in labor standards enforcement and occupational duties, and the Wage and Hour Division’s (WHD) primary role in enforcing the promises made by employers on LCAs, DOL should take the lead on such compliance efforts, with DHS possibly partnering in support of DOL. Any enforcement of prevailing wage levels, including random audits, will require additional funding and staffing for DOL. As a result, the administration should make a request to Congress for new funds to hire additional WHD investigators. (A recent report shows that the number of WHD investigators is at 611, an all-time low,{{28}} likely due in part to the administration’s funding and staffing cuts at DOL.)

Accurately identifying prevailing wages is also critical to ensuring the effectiveness of the allocation scheme. The government has recently announced significant efforts, such as the forthcoming DOL proposed rule to update prevailing wage levels, as well as Project Firewall, an enforcement initiative, to improve program integrity. While we believe such initiatives may be a positive step, they remain only aspirational—and may be difficult to implement given significant DOL funding and staffing cuts, and we worry about DOL following through, given DOL’s actions on other fronts that we are critical of—thus our analysis is based on the current state of program implementation.

A successful H-1B allocation scheme depends on accurately identifying and labeling prevailing wage levels and occupations

The key factor for the allocation scheme is determining the foreign worker’s wage premium, which is calculated as the difference between the H-1B worker’s wage and that of a similarly situated U.S. worker. Identifying the H-1B wage is straightforward since the proposed rule requires employers to submit the proffered wage in their electronic registration, rather than just the wage level selected at the LCA level. The imprecision of the employer’s choice of both occupation and level makes benchmarking against similar U.S. workers problematic since the agency cannot ensure they are, in fact, similar.

The proposed rule requires employers to map their proffered wage to a wage level based on the SOC and geography. This step eliminates the most problematic element in the prevailing wage process, i.e. the employer’s interpretation of the position’s level. However, the employer’s interpretation of the occupation and the possibility of its misclassification remain problematic. The interpretation of occupations is non-standard, and different firms would likely map the same exact position to various occupations. For example, firms may interchange a relatively low wage six-digit level occupation, such as 15-1211 Computer Systems Analysts, which at the national level has a Level III wage of $103,790, with the higher wage of 15-1252 Software Developers, which has a Level III wage of $133,080 at the national level.{{29}} An employer paying an H-1B worker $104,000 would be Wage Level III if they select the position of Computer Systems Analyst, but Level I if they identified the position as Software Developer.

The agency can mitigate the adverse effects of occupational misclassification on the proposed allocation scheme by having employers use a four-digit, instead of a six-digit, SOC to identify the wage level for registration purposes. Employers would select the six-digit occupation with the highest median wage within its four-digit SOC family, and then map their proffered wage to the corresponding wage level. For example, applications with any computer occupation (15-12XX) would map their wage levels to 15-1221, Computer and Information Research Scientists. Correcting occupational misclassification this way is analogous to the proposed rule’s handling of multiple worksite locations to, “prevent gaming of the weighted selection process…”{{30}}

Using a wage level prioritization allocation for H-1B visas is reasonable and consistent with the H-1B statute, and it should be the preferred method for allocation

The program statute states that the visa is open to any “specialty occupation” and that prevailing wages should be adjusted based on “the occupational classification in the area of employment.”{{31}} Congress wrote this language in recognition that the wage structures of occupations vary, e.g., accountants are typically paid lower wages than software developers, and that the cost of living varies across geographies, e.g., the California Bay Area has a much higher cost of living than Cleveland, Ohio. The allocation scheme should favor registrations that offer the highest wage premium—as compared to the highest wage amount—measured after controlling for occupation and geography.

USCIS’s proposed rule in 2020 and final rule in 2021 would have achieved this by allocating H-1B petitions first to employers who file petitions that pay Level 4 wages—the highest H-1B wage level—and then to petitions with the lower wage levels in descending order (Level 3, Level 2, and then Level 1).{{32}} Since higher wages are a valid proxy for higher skills in this context,{{33}} the proposed allocation system by wage levels would have resulted in the highest-skilled and best paid applicants with in an occupation being selected for H-1B petitions from the available annual pool of petitions. In fact, this formulation continues to be our preferred allocation scheme for H-1B petitions, although we would modify it to include the requirements from the current NPRM that employers list the proffered wage level on their registration filing that would then be mapped to the appropriate wage level, and when a position is located in multiple geographic locations, using the lowest wage level among the locations as the proffered wage. Had it gone into effect, the rule would have resulted in the selected H-1B workers being paid at higher wage levels, and those higher wages would have helped safeguard U.S. wage standards in major H-1B occupations like information technology and other computer occupations. This is essential given that workers in those occupations have seen virtually no real wage growth since the late 1990s.{{34}} Wage levels are an appropriate proxy for skill since they account for wage variations by geographic location (higher versus lower cost areas) and occupation.

The statutory language at 8 USC §1184(g)(3) is ambiguous and silent as to how visas should be allocated if they cannot be issued in the order that they were filed, and it offers no additional insight into what Congress meant by “filed.” The filing of an H-1B petition is the most reasonable explanation of what “filed” means, but since allocating H-1B visas in the exact order in which they were filed is rendered impracticable by virtue hundreds of thousands of petitions being submitted in one day or over the course of a few days, creating an allocation scheme based on wage levels is more reasonable than creating a random lottery. In addition, a wage level-based allocation scheme is reasonable because it is consistent with the intent of the H-1B visa statute, which is to provide “American businesses” with “highly skilled, specially trained personnel to fill increasingly sophisticated jobs for which domestic personnel cannot be found”{{35}} (emphasis added). Since employers are not required to test the labor market for available U.S. workers before hiring H-1B workers (as discussed in section I), prioritizing higher-skilled, higher-paid H-1B workers also ensures that the employers facing a true shortage of talent—as indicated by the higher wage levels they are willing to pay—have a better chance at obtaining an H-1B visa, which also furthers the goals set out in the statute.

The proposed weighted lottery is reasonable and an improvement from the status quo but will not achieve an ideal outcome

With all of that being said, including our preferred proposal for an allocation scheme discussed in the preceding section, we nevertheless generally support DHS’s proposed weighted allocation scheme because it is reasonable and a measurable improvement over the current scheme in meeting the H-1B program’s intent. It will shift the total number of H-1B petitions that are selected where employers will be required to pay wage rates that are higher than the local median wage for the occupation (i.e., Level 3 and Level 4 wages).

Under the current random allocation scheme, DHS shows in Table 13 of the NPRM that petitions at every wage level have a 29.59% probability of being selected. However, given that so many more petitions have wages promising to pay Level 1 and Level 2 wages, the random lottery results in an outcome where 83% of H-1B beneficiaries selected are at Level 1 and Level 2, as shown in Table 12, with only 17% selected at Level 3 or 4. DHS notes that moving to a weighted lottery would result in the probability of the wage levels being selected shifting towards an increasing the likelihood that petitions at Level 3 and Level 4 are selected: “15.29 percent [probability] for level [1], 30.58 percent for level [2], 45.87 percent for level [3], and 61.16 percent for level [4].”{{36}}

Assigning greater weight to petitions at Level 3 and Level 4 will bring implementation of the H-1B program closer to the intent of the original statute, while still retaining a high degree of randomness and permitting significant numbers of petitions at Level 1 and Level 2 to be selected. An allocation process that uses wage levels, rather than a prioritization scheme that uses individual salary levels, will also likely result in H-1B petitions being allocated among a broad mix of occupations and regions, which we believe is a preferred outcome—while also prioritizing petitions for the most highly-skilled workers in each of the occupations.

However, we believe DHS should consider and model other alternatives to H-1B petition allocation that they believe are reasonable, lawful, and help align the H-1B program with the intent and goals of the statute. Other allocation methodologies have also been proposed publicly by advocates; we would welcome discussion, modeling, and analysis of those proposals by DHS.

But given the information that we have available to us now, as noted in the preceding section, we believe that the wage level prioritization in DHS’s proposed rule in 2020 and final rule in 2021 would be preferable. By first allocating H-1B petitions to employers who file petitions that pay Level 4 wages and then to petitions with the lower wage levels in descending order, the result would be that the highest-skilled and best paid applicants within an occupation would be selected for H-1B petitions.

Proposals for a prioritization scheme based solely on compensation levels will favor a small number of occupations and regions, and should be rejected

Some advocates have called for an H-1B allocation proposal that ranks petitions by actual salary level—rather than a wage level that accounts for skill, occupation, and geography—with the latest being published in September 2025 by the Institute for Policy.{{37}} The author of the proposal, Jeremy Neufeld, argues that DHS’s weighted lottery will result in IT outsourcing firms gaining 8% more H-1B visas, that F-1 visa graduates would receive 7% fewer visas, and that the H-1B median salary would increase by just 3%.

Given our understanding of Neufeld’s proposal and modeling, his analysis does not exactly match DHS’s current proposal, calling into question his results. Neufeld appears to have utilized the wage levels selected by employers at the LCA level—rather than what DHS proposes—which is to take the “proffered” wage; i.e. the actual salary that the employer intends to pay the beneficiary—and use that to determine the appropriate wage level listed on the registration that will be weighted, according to the OEWS wage levels for the occupation and region. We know from our own reviews of H-1B LCA and petition data that in many cases the actual salary proffered by employers would correspond to a higher wage level according to OEWS wage levels by occupation and region. (In other words, an employer may select Level 2 but pay a wage that actually corresponds to Level 3 or 4.) Why this occurs reveals how the administrative process is flawed, but the fact remains that any modeling of DHS’s weighted lottery would require mapping proffered wages to wage levels to achieve a reliable result.

We believe that Neufeld’s proposal based on actual salary levels would have certain consequences, not all of which are accounted for in his September 2025 publication or an earlier publication that discusses multiple proposals for an H-1B allocation scheme, including one based solely on “compensation ranking.”{{38}} In that report, Neufeld concedes that a compensation-based ranking of petitions would result in more H-1B petitions being awarded to employers in higher-cost regions of the United States. Those regions would mostly include the urban areas on both coasts of the United States, where the cost of living is higher.

The goal of the H-1B program is to fill labor shortages. Occupational shortages/surpluses are not measured by absolute wages, and a high absolute wage for a specific occupation is not a reliable indicator of a labor shortage. Instead, as a 2001 National Academies of Sciences, Engineering, and Medicine study explains, shortages are observable: “When demand exceeds supply in a particular occupation, compensation tends to rise relative to compensation in other occupations that require similar education, effort, and working conditions” (emphasis added).{{39}}

In his analysis, Neufeld does not state explicitly that a larger share of H-1B petitions would go to certain occupations. We believe those are most likely to be computer and engineering occupations, which will crowd out petitions for H-1B workers who would be employed in occupations like teachers, attorneys, accountants, and doctors (especially doctors employed in rural areas). In other words, a compensation-based ranking would mostly benefit technology companies like Google, Microsoft, Amazon, and Meta, that employ H-1B workers in computer occupations who reside on the coasts of the United States.

Ample evidence shows that computer occupations are not experiencing a labor shortage, so prioritizing their allocation would undermine rather than advance the H-1B program’s goals. Wage growth for computer occupations has been stagnant, technology firms have been laying off skilled software employees by the tens of thousands, and recent U.S. computer science graduates are facing the worst job market in a generation, with record levels of unemployment and underemployment, just as U.S. computer science students earn degrees in their highest numbers.{{40}} The latter fact is especially salient since the vast majority of H-1B approvals, 83% according to Table 12 in the NPRM, are for Level 1 and 2 positions, the very jobs that the large surplus of computer scientists in the U.S. should fill. Neufeld’s proposed scheme would prioritize computer occupations—the very job market experiencing a labor surplus rather than a shortage.

Neufeld proposes accounting for the geographical outcome by “adjusting for regional price parity can address geographic heterogeneity without significantly reducing the economic benefits of compensation-based ranking,” and further suggests that DHS make age adjustments, because compensation-based ranking “may not account for the full future potential and lifetime contributions of younger workers who start at lower salaries but have high growth potential.” The age adjustment proposal is not expounded on further, so we are not sure how it would operate in practice.

We have two reactions to this. First, we believe that an allocation scheme solely based on compensation would be clearly inconsistent with the H-1B statute on its face, and thus require Congressional action (as opposed to a weighted or wage level lottery that can be implemented by DHS regulation). The H-1B statute at 8 U.S.C. § 1182(n)(1)(A)(II) clearly states that the H-1B prevailing wage should take into consideration “the occupational classification in the area of employment,” unless it is based on a wage that is already being paid to an employer’s similarly situated U.S. (non-H-1B) employee. Using wage levels that reflect occupation and region are clearly consistent with the statute, and thus more likely to be upheld if challenged in court. A compensation-based ranking scheme reflects neither, and while Neufeld attempts to account for the “area of employment” language in the statute with a suggestion of “adjusting for regional price parity,” he does not explain how that would work in practice—and in any case, it would likely insert an additional and unnecessary layer of complexity to the H-1B registration and allocation process.

Second, we believe that an H-1B program that permits a broader range of occupations is preferable, rather than one that mostly awards H-1B petitions to tech companies. Employers in various industries need a viable pathway to hire skilled talent from abroad and should thus not be closed off from the U.S.’s main visa program that could allow them to do so. We believe that all occupations and contributions of workers have value—and that the H-1B program was designed to permit employers to hire the most skilled and talented workers within a broad range of occupations and industries—not simply as a “computer visa” that almost exclusively benefits tech and information technology companies.

Early career foreign graduates of U.S. universities should have a pathway to employment in the United States that leads directly to a green card

Numerous other commenters, including Neufeld, raise the concern about wage-level-based allocation schemes crowding out younger and early career migrant workers who are just starting their careers. We agree that skilled and talented younger and early career workers, including many of those who graduate from top U.S. universities, deserve a pathway to employment in the United States. However, the H-1B program was created to help employers fill labor shortages with skilled workers, not as an early career development program for foreign students that leaves them in an indentured status for years, if not decades.

There are better proposals that would allow employers to recruit and hire foreign graduates of U.S. universities, including the Keep STEM Talent Act, which would put foreign students on a direct path to a green card if they have a job offer from a U.S. employer that pays the local median wage.{{41}} Nevertheless, early-career workers are not excluded from the H-1B program and would have a legitimate opportunity for an H-1B visa under the weighted allocation, even if they were paid a Level 1 or Level 2 wage. Many early career graduates who are presently paid at Level 1 and Level 2 wages, especially those with advanced degrees, should be offered Level 3 and Level 4 wages, which would make them even more likely to be selected through a weighted allocation scheme. And employers who are currently underpaying their H-1B employees may also change their behavior and offer higher wages to increase their chances in the weighted lottery.

It should also be noted that advocates for more H-1B petitions being approved at below-median wage levels ignore current employment realities, wherein recent college graduates in computer occupations are experiencing unemployment rates that are “more than double the unemployment rate among recent biology and art history graduates, which is just 3 percent,” as the NY Times recently reported. The Times cited statistics from the Federal Reserve Bank of New York—noting that “[a]mong college graduates ages 22 to 27, computer science and computer engineering majors are facing some of the highest unemployment rates, 6.1 percent and 7.5 percent respectively”{{42}}—and pointed to examples of skilled graduates applying to hundreds of jobs with little luck. Entry-level H-1B jobs at wage levels 1 and 2 are exactly the types of opportunities that should be available first to U.S. workers, including both U.S.-born citizens and permanent immigrants with green cards. Yet, the H-1B program undermines their opportunities by allowing employers to underpay temporary migrant workers with a precarious immigration status that employers can exert an extraordinary level of control over.

The H-1B random lottery benefits outsourcing companies that pay low wages and game the system, making it more difficult for start-up and direct-hire firms to hire H-1B workers

The current random lottery allocation may give each petition equal odds, but it does not give each firm equal odds. The main beneficiaries of the current random lottery allocation process have been H-1B employers that are staffing firms, which are more likely to pay H-1B workers at the lowest wage rates.{{43}} The H-1B staffing firms use an outsourcing model to send their H-1B employers to third-party worksites, and earn their profits by undercutting local wage rates for college-educated workers. These companies, as Bloomberg and the New York Times reported, “have obtained many thousands of the visas — which are limited to 85,000 a year — by learning to game the H-1B system without breaking the rules.”{{44}} The “system” the Times is referring to here is the H-1B random lottery.

Real-world scenarios illustrate how the random lottery has favored outsourcing firms over those seeking truly skilled workers. The outsourcing firms have most of their workforce in low-cost countries such as India, and employ hundreds of thousands of workers. If an outsourcing firm seeks 1,000 approved H-1B petitions in any fiscal year, it will submit 3,000 petitions on behalf of its workers located in India. Since the odds have been roughly one-in-three, the random lottery rewards the outsourcing firm with the 1,000 approved petitions it sought. Since many of the workers the outsourcing firms seek to hire have relatively lower skills—as evidenced by being assigned wage rates that are almost exclusively at Level 1 and Level 2—they are largely interchangeable workers, and it matters little to the outsourcing firms which specific one thousand workers are selected. Compare this to a start-up firm seeking to hire a specific engineer with a truly special skill set that it is willing to pay a Level 4 wage to obtain; the start-up firm has only a 33% percent chance of winning the lottery. The outsourcing companies, on the other hand, flood the lottery with multiple applications to obtain thousands of visas per year, which crowds out start-up firms and employers with legitimate needs that employ workers directly and pay H-1B workers at higher wage levels.

It’s important to emphasize that the DHS rule that moved to a beneficiary-centric registration process to reduce lottery abuse perpetrated primarily by small IT staffing companies did nothing to eliminate the abuse described above by outsourcing firms. DHS must enforce the requirement that employers have a bona fide job for the prospective H-1B worker and begin rejecting and revoking petitions in cases where employers maintain large numbers of “travel-ready” and “visa-ready” workers for speculative positions.{{45}}

USCIS should consider alternate approaches in case of a legal challenge.

Some commenters and critics of the proposed H-1B allocation process may contend that the statutory language at 8 USC §1184(g)(3) does not authorize DHS to update the H-1B allocation process by wage level as detailed in the proposed rule, because DHS would no longer be issuing H-1B visas in the order in which the petitions were filed. While we disagree with this assessment as discussed herein, DHS should nevertheless explore alternative methodologies for wage-based allocation that it can propose in a new rulemaking if the proposed rule is the subject of a successful statutory challenge in federal court.

One simple new methodology, for example, could consist of having staggered filing deadlines for petitions by wage levels. 8 USC §1184(g)(3) is silent as to whether there can only be one filing period or whether there can be multiple. Therefore, USCIS could have a first filing period, where only petitions with jobs paying Level 4 are considered. Once all the Level 4 petitions are submitted and approved, then a second filing period at a later date could be set to receive only petitions with jobs paying Level 3 wages. After those are collected and approved, if there are any visas remaining under the H-1B cap, then a filing period for Level 2 wages would be next, and finally a filing period for Level 1. With a process like this, the cap-subject H-1B petitions in a given fiscal year would not all be submitted at once, thereby allowing USCIS to adjudicate and allocate petitions “in the order in which” they were filed, as the statute requires. If there end up being more petitions than available H-1B slots during a filing period for a particular wage level, USCIS could conduct a “mini-lottery” in order to randomly allocate the petitions within that wage level.

Fixing the H-1B program requires improving the H-1B prevailing wage methodology

As we have discussed in this comment, a reasonable and fair H-1B prevailing wage methodology that truly reflects market rates for H-1B occupations is essential to reforming the H-1B program and must exist in tandem with any allocation process that can adequately safeguard wages and working conditions. At present, the H-1B prevailing wage methodology is neither reasonable nor fair.

Section 4 of President Trump’s recent proclamation directs the Secretary of Labor to initiate a rulemaking process to revise the H-1B prevailing wage levels.{{46}} We hope to see DOL’s proposal soon. The current methodology sets H-1B wages based on DOL survey data by occupation and local area, setting them at specified percentile levels in the distribution of surveyed wages in the OEWS, which have ben chosen by DOL. The current wage levels are set at arbitrarily low levels (i.e. percentiles), leading to the vast majority of H-1B workers being paid at wage rates that are below the local median wage for the occupations they fill (as discussed at length in this comment). DOL in 2020 finalized a rule to amend the H-1B prevailing wage levels, but it was blocked in federal court on procedural grounds, and the Biden administration DOL considered proposing its own updated H-1B methodology soon thereafter, even soliciting comments from the public on it, but the Biden DOL ultimately never introduced its own proposed rule. 

DOL has the requisite legal authority to attempt again to modify the H-1B prevailing wage levels to appropriate rates that protect U.S. wage standards and prevent adverse effects caused by the H-1B program. For far too long, the H-1B wage levels have been set at an artificially low level that undercuts U.S. wage standards—and we have called on both Republican and Democratic administrations to fix the problem using their executive authority. It is reasonable for DOL to do so now, and we call on DOL to update the prevailing wage levels so that Level 1 is no lower than the local median wage for the occupation, i.e. the current Level 3 wage.

Fixing the H-1B program requires increased and improved labor standards enforcement and adequate funding and staffing at worker protection agencies like DOL

As we have already noted, adequate reform of the H-1B program that improves wages and working conditions for all workers requires robust labor standards enforcement, in particular adequate oversight from the Wage and Hour Division (WHD) at DOL. Unfortunately, the current outlook for labor standards enforcement is bleak.

Federal budgets for the past decade at least have heavily prioritized immigration enforcement over labor standards enforcement, with nearly 14 times as much being appropriated for immigration enforcement ($30.2 billion) as compared to the amount appropriated for labor standards and worker protection agencies ($2.2 billion) in 2023.{{47}} The 2025 budget bill passed by Republican legislators through reconciliation has dwarfed this disparity, giving $170 billion to the administration to carry out its immigration enforcement activities, while failing to appropriate even one additional cent to worker protection agencies. This, at a time when worker protection agencies are already underfunded and understaffed.

Figure A shows that, in inflation-adjusted 2023 dollars, WHD—the primary agency responsible for enforcing the wage promises made by employers in H-1B LCA filings—had a budget in 2006 of $250 million, and in 2023, $260 million—an increase of just $10 million over nearly two decades. As Figure A also shows, this trend has been consistent with appropriations for two other key worker protection agencies, the Occupational Safety and Health Administration (OSHA) and the National Labor Relations Board (NLRB). At both OSHA and the NLRB, inflation-adjusted appropriations were significantly lower in 2023 compared with 2006.

Figure A

In addition to funding levels that have barely kept up with inflation at WHD—the primary agency tasked with protecting labor standards in the H-1B program—the number of WHD investigators that the agency employs is at an all-time low. Those investigators are also primarily responsible for ensuring that federal wage and hour laws are obeyed by employers across all 50 states and U.S. territories, and protecting the roughly 170 million workers in the U.S. labor market. Figure B shows that there were only 733 WHD investigators at the end of 2023 to enforce all federal wage and hour laws, 79 fewer than in 1973, the first year for which data are available, and 499 fewer than the peak year of 1978 when there were 1,232 WHD investigators. By May 2025, just four months into the Trump administration, the number of WHD investigators had dropped to 611, a new historic low. While the number of WHD investigators is now half of what it was at its peak in 1978, the number of workers those investigators have a mandate to protect has tripled, and the number of establishments subject to WHD enforcement has quadrupled.{{48}}

Figure B

Having already cut at least half a billion dollars from DOL funding, requiring the agency to close regional offices that enforce wage and hour laws,{{49}} the administration is seeking even further decreases in labor standards enforcement funding and staffing, with a reported goal of cutting 30% of funding from DOL.{{50}} The administration has fired or forced out leaders and career staff at worker protection agencies and cut budgets almost indiscriminately, severely hampering the ability of federal agencies to protect wages and working conditions. And there is now a likely pause in labor and employment law enforcement because of the government shutdown.

If the administration is serious about creating new and improved rules for the H-1B program and enforcing them through new initiatives like Project Firewall, then they must allow DOL to play a lead role and have deconfliction measures in place with DHS to prioritize protecting worker interests over immigration enforcement goals. The administration must also call on Congress to drastically increase budgets for key worker protection agencies, reinstate staff at DOL that has been fired or laid off, and ramp up hiring of new staff. In addition, DHS should offer temporary immigration status protections coupled with work authorization to protect migrant workers who report their employers’ violations of labor and employment laws from retaliation, which will also encourage them to come forward and assist labor agencies in holding H-1B employers accountable when they break the law.

Conclusion

For years, migrant worker advocates, unions, academics, and both Democratic and Republican lawmakers have pointed out the need to change employer incentives by shifting away from the H-1B random lottery towards a true prioritization process in which visas are issued to employers seeking to hire and retain skilled workers by paying them fair wages that reflect market rates. We have urged the Administration and the Congress to explore alternatives to the lottery system that would directly prioritize wages and skills, and thus we support this regulatory effort to implement this change via a weighted lottery.

The H-1B visa program is the largest temporary work visa program in the United States and an important pathway into the U.S. labor market for skilled migrants from around the world—but it is a pathway that has serious deficiencies when it comes to the labor and employment rights of migrant workers and preserving U.S. labor standards. By issuing this proposed rule, DHS has taken an important first step towards fixing a system that has rewarded low-road employers with a business model that hinges on underpaying migrant workers. But as these comments suggest, even more should be done to improve the regulations that should act as safeguards to protect H-1B workers and similarly situated U.S. workers. H-1B workers should be paid fairly, have equal rights, and have an opportunity to become lawful permanent residents within a reasonable period of time. The administration should also take further action on other visas and in other areas to lift wage standards and improve working conditions for all workers, regardless of immigration status.

Regards,

Daniel Costa, Esq.
Director of Immigration Law and Policy Research
Economic Policy Institute

Ron Hira, Ph.D., P.E.
Associate Professor
Department of Political Science
Howard University

{{1.}} Daniel Costa and Ron Hira, H-1B visas and prevailing wage levels: A majority of H-1B employers—including major U.S. tech firms—use the program to pay migrant workers well below market wages, Economic Policy Institute, May 4, 2020.

{{2.}} See, Department of Labor, Employment and Training Administration, Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States, Interim Final Rule DOL Docket No. ETA-2020-0006, RIN: 1205-AC00, October 8, 2020; see also Daniel Costa, “EPI comments on DOL wage level methodology for H-1B visas and permanent labor certifications for green cards,” Economic Policy Institute (public comments), November 9, 2020.

{{3.}} U.S. Citizenship and Immigration Services, Department of Homeland Security, Strengthening the H-1B Nonimmigrant Visa Classification Program, CIS Docket No. 2658-20, DHS Docket No. USCIS-2020-0018, RIN: 1615-AC13, October 8, 2020.

{{4.}} U.S. Citizenship and Immigration Services, Department of Homeland Security, Modification of Registration Requirement for Petitioners Seeking To File Cap-Subject H-1B Petitions, CIS No. 2674-20; DHS Docket No. USCIS-2020-0019, RIN 1615-AC61, 85 Fed.Reg. 69236 (November 2, 2025)/

{{5.}} Michelle Hackman, “Federal Judge Strikes Down Trump’s H-1B Visa Rules on Highly Skilled Foreign Workers,” Wall Street Journal, December 1, 2020.

{{6.}} Presidential Candidate Joe Biden, immigration plan; previously available at https://joebiden.com/immigration/ (archived and on file with authors).

{{7.}} See, Sec. 104. H-1B Visa Allocation in S. 2928, H-1B and L-1 Visa Reform Act, 119th Congress (2025-2026) and H.R. 6993, H-1B and L-1 Visa Reform Act, 116th Congress (2019-2020).

{{8.}} Dave Jamieson, “Trump is hoping to deliver a parting gift to the agriculture lobby: an effective wage cut for farmworkers,” Huffington Post, November 9, 2020.

{{9.}} Employment and Training Administration, Adverse Effect Wage Rate Methodology for the Temporary Employment of H-2A Nonimmigrants in Non-Range Occupations in the United States, Interim Final Rule, U.S. Department of Labor, 90 Fed. Reg. 19365 (October 2, 2025). See discussion in Lauren Kaori Gurley, “Trump administration says immigration enforcement threatens higher food prices,” Washington Post, October 11, 2025; David Dayen, “Trump Labor Department Says His Immigration Raids Are Causing a Food Crisis,” The American Prospect, October 8, 2025.

{{10.}} Eric Fan, Zachary Mider, Denise Lu, and Marie Patino, “How Thousands of Middlemen are Gaming the H-1B Program,” The Big Take, Bloomberg, July 31, 2024.

{{11.}} U.S. Bureau of Labor Statistics, “15-0000 Computer and Mathematical Occupations (Major Group),”Occupational Employment and Wage Statistics, May 2024, U.S. Department of Labor.

{{12.}} Authors’ analysis of the LCA Programs disclosure data files for fiscal year 2024, Office of Foreign Labor Certification, Performance Data, Employment and Training Administration, U.S. Department of Labor.

{{13.}} See, for example, “Techsploitation,” Reveal News, The Center for Investigative Reporting, and Farah Stockman, “Teacher Trafficking: The Strange Saga of Filipino Workers, American Schools, and H-1B Visas,” Boston Globe, June 12, 2013.

{{14.}} Christopher Lapinig, “How U.S. Immigration Law Enables Modern Slavery,” The Atlantic, June 7, 2017.

{{15.}} See for example, Erika Werner, “High-skilled visa holders at risk of deportation amid tech layoffs,” Washington Post, February 24, 2023.

{{16.}} For a discussion about H-1B portability in practice, see Daniel Costa, “Is portability a panacea?

Changing employers in US temporary migration programmes,” chapter 8 in Christiane Kuptsch and Fabiola Mieres (eds.), Temporary labour migration: Towards social justice? edited volume, International Labour Organization, February 2025.

{{17.}} See for example, Daniel Costa and Ron Hira, H-1B visas and prevailing wage levels: A majority of H-1B employers—including major U.S. tech firms—use the program to pay migrant workers well below market wages, Economic Policy Institute, May 4, 2020; Daniel Costa and Ron Hira, “Tech and outsourcing companies continue to exploit the H-1B visa program at a time of mass layoffs: The top 30 H-1B employers hired 34,000 new H-1B workers in 2022 and laid off at least 85,000 workers in 2022 and early 2023,” Working Economics blog (Economic Policy Institute), April 11, 2023.

{{18.}} See for example, Senator Richard Durbin, “How American Jobs are Outsourced,” YouTube.com video, April 16, 2016.

{{19.}} See for example, Stef Kight, “U.S. companies are forcing workers to train their own foreign replacements,” Axios, December 29, 2019; Julia Preston, “Pink Slips at Disney. But First, Training Foreign Replacements,” New York Times, June 3, 2015; Julia Preston, “Toys ‘R’ Us Brings Temporary Foreign Workers to U.S. to Move Jobs Overseas,” New York Times, September 29, 2015; Michael Hiltzik, “How the University of California Exploited a Visa Loophole to Move Tech Jobs to India,” Los Angeles Times, January 6, 2017; Patrick Thibodeau, “Southern California Edison IT Workers ‘Beyond Furious’ over H-1B Replacements,” Computerworld, February 5, 2015.

{{20.}} See for example, Eric Fan, Zachary Mider, Denise Lu, and Marie Patino, “How Thousands of Middlemen are Gaming the H-1B Program,” The Big Take, Bloomberg, July 31, 2024; Julia Preston, “Large Companies Game H-1B Visa Program, Costing the U.S. Jobs,” New York Times, November 10, 2015.

{{21.}} David Weil, The Fissured Workplace: How Work Became So Bad for So Many and What Can Be Done to Improve It, Harvard, 2014.

{{22.}} A number of studies show a wage penalty for subcontracted/outsourced workers. For example, see Arindrajit Dube and Ethan Kaplan, “Does Outsourcing Reduce Wages in the Low-Wage Service Occupations? Evidence from Janitors and Guards,” Cornell University ILR Review. January 1, 2010); Deborah Goldschmidt and Johannes Schmieder, “The Rise of Domestic Outsourcing and the Evolution of the German Wage Structure,” The Quarterly Journal of Economics, Oxford University Press, vol. 132(3), 2017, pages 1165-1217; Andres Drenik, Simon Jäger, Pascuel Plotkin, and Benjamin Schoefer “Paying Outsourced Labor: Direct Evidence from Linked Temp Agency-Worker-Client Data,” Econometrics Laboratory, University of California, Berkeley, September 2020.

{{23.}} Wage and Hour Division, “H-1B Program,” U.S. Department of Labor, n.d. (last visited October 23, 2025).

{{24.}} The source for this table is USCIS Form I-129 petition data obtained by Eric Fan, a reporter with Bloomberg; see BloombergGraphics / 2024-h1b-immigration-data at GitHub, and the source for LCA data is LCA Programs disclosure data files for fiscal year 2024, Office of Foreign Labor Certification, Performance Data, Employment and Training Administration, U.S. Department of Labor.

{{25.}} See DOL prevailing wage guidance at Employment and Training Administration, “Prevailing Wage Determination Policy Guidance: Nonagricultural Immigration Programs,” Revised November 2009, U.S. Department of Labor.

{{26.}} Source for LCA data is LCA Programs disclosure data files for fiscal year 2023, Office of Foreign Labor Certification, Performance Data, Employment and Training Administration, U.S. Department of Labor.

{{27.}} Kevin Gray, “Average Starting Salary for Class of 2024 Shows Mild Gain,” National Association of Colleges and Employers, August 26, 2025.

{{28.}} Jake Barnes, Janice Fine, Daniel J. Galvin, Jenn Round, Hana Shepherd, To Help U.S. Workers, We Need Labor Standards Enforcement, Not Mass Deportations, Data Brief, Workplace Justice Lab, Rutgers University, May 2025.

{{29.}} Occupational Employment and Wage Statistics, 15-1211 Computer Systems Analysts and 15-1252 Software Developers, Industry: Cross-industry, Private, Federal, State, and Local Government, May 2024, U.S. Bureau of Labor Statistics, U.S. Department of Labor.

{{30.}} U.S. Department of Homeland Security, Weighted Selection Process for Registrants and Petitioners Seeking To File Cap-Subject H-1B Petitions, Notice of Proposed Rulemaking, 90 Fed. Reg. 45992-3 (September 24, 2025); see in particular this passage: “If the H-1B beneficiary would work in multiple locations, or in multiple positions if the registrant is an agent, the registrant would select the box for the lowest equivalent wage level among the corresponding wage levels for each of those locations or each of those positions and would list the location corresponding to that lowest equivalent wage level as the area of intended employment.”

{{31.}} S.358 – Immigration Act of 1990, U.S. Public Law 101-649.

{{32.}} U.S. Department of Homeland Security, Modification of Registration Requirement for Petitioners Seeking To File Cap-Subject H-1B Petitions, Notice of Proposed Rulemaking, 85 Fed. Reg. 69236 (November 2, 2020); Modification of Registration Requirement for Petitioners Seeking To File Cap-Subject H-1B Petitions, Final Rule, 86 Fed. Reg. 1676 (January 8, 2021).

{{33.}} Daniel Costa and Ron Hira, H-1B visas and prevailing wage levels: A majority of H-1B employers—including major U.S. tech firms—use the program to pay migrant workers well below market wages, Economic Policy Institute, May 4, 2020.

{{34.}} See Analysis of Bureau of Labor Statistics data by Hal Salzman and Khudodod Khudododov, “It Ain’t Pretty: Wage growth has been low or stagnant for many occupations. Coding skills offer little reprieve,” Figure published in Rachel Rosenthal, “Tech Companies Want You to Believe America Has a Skills Gap,” Bloomberg Opinion, August 4, 2020; Hal Salzman, Daniel Kuehn, and B. Lindsay Lowell, Guestworkers in the high-skill U.S. labor market: An analysis of supply, employment, and wage trends, Economic Policy Institute, April 24, 2013; Ron Hira, “Is There Really a STEM Workforce Shortage,” Issues in Science and Technology, Col XXXVIII, No. 4, Summer 2022.

{{35.}} 85 Fed. Reg. 69238, citing H.R. Rep. 101–723(I) (1990), as reprinted in 1990 U.S.C.C.A.N. 6710, 6721 (stating ‘‘The U.S. labor market is now faced with two problems that immigration policy can help to correct. The first is the need of American business for highly skilled, specially trained personnel to fill increasingly sophisticated jobs for which domestic personnel cannot be found and the need for other workers to meet specific labor shortages’’).

{{36.}} U.S. Department of Homeland Security, Weighted Selection Process for Registrants and Petitioners Seeking To File Cap-Subject H-1B Petitions, Notice of Proposed Rulemaking, 90 Fed. Reg. 46006 (September 24, 2025).

{{37.}} Jeremy Neufeld, The “Wage Level” Mirage: How DHS’s H-1B proposal could help outsourcers and hurt US-trained talent, Institute for Policy, September 24, 2025.

{{38.}} Jeremy Neufeld, Talent Recruitment Roulette: Replacing the H-1B Lottery: We could almost double the economic value of the H-1B program without changing the number of visas, Institute for Policy, January 17, 2025.

{{39.}} National Research Council, Building a Workforce for the Information Economy, The National Academies Press (Washington, DC).

{{40.}} For an examination of occupational shortages, see Ron Hira, “Is There Really a STEM Workforce Shortage,” Issues in Science and Technology, Col XXXVIII, No. 4, Summer 2022. For technology layoffs, see Layoffs.fyi, a website that tracks layoffs. For the state of the computer job market for recent graduates see, Natasha Singer, “Goodbye, $165,000 Tech Jobs. Student Coders Seek Work at Chipotle.” NY Times, August 10, 2025. For trends in computer science bachelor’s degrees, see National Center for Education Statistics, Table 322.10, Bachelor’s degrees conferred by postsecondary institutions, by field of study: Selected academic years, 1970-71 through 2021-2, 2023 Digest of Education Statistics, U.S. Department of Education. The vast majority, of computer science bachelor’s degrees, more than 90%, are earned by U.S. citizens and lawful permanent residents.

{{41.}} S.1233 – Keep STEM Talent Act of 2025, 119th Congress (2025-2026).

{{42.}} Natasha Singer, “Goodbye, $165,000 Tech Jobs. Student Coders Seek Work at Chipotle.” NY Times, August 10, 2025.

{{43.}} See for example; Eric Fan, Zachary Mider, Denise Lu, and Marie Patino, “How Thousands of Middlemen are Gaming the H-1B Program,” The Big Take, Bloomberg, July 31, 2024; Daniel Costa and Ron Hira, H-1B visas and prevailing wage levels: A majority of H-1B employers—including major U.S. tech firms—use the program to pay migrant workers well below market wages, Economic Policy Institute, May 4, 2020; Ron Hira, Congressional Testimony before the U.S. Senate Subcommittee on Immigration and the National Interest, hearing on “The Impact of High-Skilled Immigration on U.S. Workers,” Economic Policy Institute, February 25, 2016.

{{44.}} Eric Fan, Zachary Mider, Denise Lu, and Marie Patino, “How Thousands of Middlemen are Gaming the H-1B Program,” The Big Take, Bloomberg, July 31, 2024; Julia Preston, “Large Companies Game H-1B Visa Program, Costing the U.S. Jobs,” New York Times, November 10, 2015.

{{45.}} For more details about visa-ready H-1B abuse by outsourcing firms, see Ronil Hira’s testimony before the U.S. Senate Committee on the Budget, “Unlocking America’s Potential: How Immigration Fuels Economic Growth and Our Competitive Advantage,” September 13, 2023.

{{46.}} The White House, Restriction on Entry of Certain Nonimmigrant Workers, Presidential Proclamation, September 19, 2025.

{{47.}} Daniel Costa, Josh Bivens, Ben Zipperer, and Monique Morrissey, The U.S. benefits from immigration but policy reforms needed to maximize gains: Recommendations and a review of key issues to ensure fair wages and labor standards for all workers, Economic Policy Institute, October 4, 2024.

{{48.}} Jake Barnes, Janice Fine, Daniel J. Galvin, Jenn Round, Hana Shepherd, To Help U.S. Workers, We Need Labor Standards Enforcement, Not Mass Deportations, Data Brief, Workplace Justice Lab, Rutgers University, May 2025.

{{49.}} Rebecca Rainey, “DOGE’s $455 Million in Labor Savings Carry Costs for US Workers,” Bloomberg Law, April 2, 2025.

{{50.}} Adam Cancryn and Jennifer Scholtes, “Trump sends a scorched-earth budget plan. GOP lawmakers hate it already.” Politico, May 2, 2025.

This report is a joint project of the Economic Policy Institute and The Century Foundation.

Introduction

The first six months of the second Trump administration have been characterized by a haphazard yet comprehensive evisceration of basic government institutions. From the mass firing of federal workers to the effective shuttering of entire agencies, Trump and his billionaire allies have pillaged public-serving institutions while giving themselves cover by claiming to promote “efficiency” (Gangitano 2025; Shao and Wu 2025; Rubin 2025).

Some of the most critical targets of these attacks have been independent agencies. Unlike executive agencies, which are overseen by the White House and accountable to the president through a cabinet secretary that is part of the president’s administration, independent agencies are established by Congress to serve a specific public purpose. While housed within the executive branch, they are not subject to day-to-day control by the White House. These agencies are supposed to perform essential watchdog functions—protecting individuals like workers, consumers, and retirees from being abused by better-resourced and more powerful corporate actors. The United States Government Manual lists over 55 such permanent independent agencies in the federal government, including well-known entities like the Federal Reserve Board and the Equal Employment Opportunity Commission, as well as lesser-known agencies like the Merit Systems Protection Board (Federal Register 2025).

These agencies have been among the earliest targets of Trump’s governmental dismantling. First, he has taken the historically unprecedented (and clearly unlawful) step of firing dozens of board members and commissioners before the expiration of their terms in office—not for any allegations of misconduct, but solely due to political disagreement or assertions of presidential prerogative (EPI 2025a; EPI 2025b; Peck 2025; EPI 2025c; Goldstein and Steel 2025). He has also issued multiple executive orders asserting new levers of control over independent agencies—giving the White House unprecedented control over these agencies’ regulations, enforcement decisions, and day-to-day operations (The White House 2025a, 2025b). More recently, President Trump has gone as far as publicly attacking and then firing Lisa Cook, a member of the Federal Reserve Board of Governors, a move that could have long-lasting economic implications (Rugaber and Weisser 2025). The Federal Reserve is perhaps the most well-known independent agency among the public; its mandates include promoting full employment, stable prices, and moderate long-term interest rates, among others.

Many of these changes have largely flown under the public radar screen, but the implications for the U.S. public are significant. While many government agencies have enforcement authority that can serve as a check on corporate power, independent agencies are unique in their ability to hold powerful actors accountable, regardless of political influence. The structure of independent agencies also promotes stability and prioritizes expert decision-making on topics of critical national importance. From the Federal Reserve’s decisions about interest rates to the Consumer Product Safety Commission’s evaluation of car seat safety, the work of independent agencies impacts working families’ lives every day. The public deserves to know that these agencies are working as Congress intended: to serve the people of the United States. The Trump administration’s actions are threatening the effectiveness of these agencies and putting people’s lives and well-being at risk.

This report will explore the structures and protections that characterize independent agencies and the multifaceted attacks that these agencies have experienced in recent months. We will then examine several case studies of key independent agencies that protect workers and consumers: the National Labor Relations Board, the Equal Employment Opportunity Commission, the Consumer Product Safety Commission, and the National Credit Union Administration. We will explore why and how Congress designed them to be independent, the important role their independence has played in protecting the U.S. public, and how their functions will be compromised if brought under the direct control of the Trump White House.

As these case studies will show, the devastation of independent agencies by the Trump administration creates tremendous potential for abuses of power that could let wealthy corporations pad their profits at the expense of ordinary people’s lives and livelihoods. The systematic attack on independent agencies deserves more attention and opposition from Congress, both to defend its prerogative to create public watchdogs within the executive branch and to protect the people these important agencies were designed to serve.

The characteristics of independent agencies

The history of independent agencies dates back to the 1880s when Congress created the Interstate Commerce Commission to regulate railroad rates.  Businesses were so reliant on the railroads that Congress decided it was important to minimize the potential for disruption by insulating the regulatory system from the vagaries of the political process (Inskeep 2025).  Many additional independent agencies were created by Congress during the New Deal.  It is commonly thought that these New Deal agencies were created to be independent because Congress wanted their decisionmaking to benefit from specialized expertise and—for several of these agencies—because they were tasked with performing adjudicative functions and, thus, were structured more like courts to preserve the integrity of the deliberative process and promote collaborative and consensus-based decisionmaking (Corrigan and Revesz 2017, 639).

Unlike executive departments—which are run by a single cabinet secretary who is a part of the president’s administration, tasked with advancing the president’s agenda in how they execute their statutory functions, and can be removed by the president at will—the design of independent agencies reflects a judgment made by Congress that they could not perform their essential functions properly if they were subject to presidential pressure. For example, early legislative proposals to house the Federal Communications Commission within the Department of Commerce were rejected out of fear that concentrating power over such important means of communication (at that time, the radio system) in the hands of a politically accountable cabinet secretary would create too much potential for political manipulation (Stella 2025).

While no two independent agencies look exactly alike, the common thread among these agencies is some level of independence from direct presidential control. Congress uses a variety of tools to insulate independent agencies from White House influence. Most importantly, these agencies generally have some ability to make policy decisions in service of the agency’s mission independent of substantive influence from the president.

Independent regulatory authority

One of the most important protections that most independent agencies have from White House influence is their historical ability to use their regulatory authority independently. For decades, traditional executive branch agencies have been required to submit all regulatory actions to the Office of Management and Budget’s Office of Information and Regulatory Analysis (OIRA) for substantive review and input (including interagency review by other executive agencies) and cannot move forward with regulatory actions without OIRA approval. There is abundant evidence that this process causes excessive delays and can hamstring the regulatory effectiveness of executive departments by reducing transparency and opening the door for political manipulation (Copeland 2013; Goodwin 2020). But, until recent executive orders by President Trump, independent agencies have been largely exempt from this review (Dudley 2025; OMB 2025). This exemption has helped to limit the influence of political actors—who are not experts in the substance of the agency’s work—on the regulatory process and has allowed independent agencies to act more nimbly to protect the public from imminent threats.

Independent enforcement and litigating authority

Since the 1960s, the Department of Justice (DOJ) has had centralized authority to engage in litigation on behalf of the United States government.{{1}} Thus, while some traditional executive agencies continue to have a significant degree of freedom to pursue enforcement actions under the statutes they administer (DOL n.d.), many do not necessarily have final say about which cases they bring in court or which arguments they make, as such decisions are ultimately controlled by DOJ. However, Congress has given most independent agencies some level of independent litigating authority (though the extent of such control varies from agency to agency).{{2}} This authority is essential to the watchdog functions of these agencies. It allows them to control their own enforcement agenda because they can independently initiate and litigate enforcement actions in court. It also ensures that agency leaders’ expertise about laws they administer is respected, because they control which legal arguments the agency makes. Finally, this authority preserves agencies’ ability to protect the public by promoting consistent and evenhanded interpretation of the law and ensuring that the meaning of the law is being dictated by experts, not politics.

Removal protections

To ensure that these agencies can truly exercise their regulatory and enforcement powers independent of White House influence, Congress has made a judgment that independent agency leadership should be protected from removal by the president in the absence of misconduct.{{3}} Removal protections are a key component of agency independence because they ensure that agency leaders cannot be fired based on policy disagreements with the president or the leadership of other executive agencies. These protections also play a valuable role in ensuring that agency enforcement of the law is not influenced by partisanship or political favoritism. It is essential that watchdog agencies have the ability to evenhandedly enforce the law against anyone who threatens the public’s interests, regardless of whether the subject of the agency’s enforcement is a presidential friend or donor.

Multimember structure

Most (but not all) independent agencies are designed to be governed by a multimember group of commissioners or board members. These boards are designed with staggered terms that are usually longer than a single presidential administration.{{4}} Congress has explicitly required that some agencies have bipartisan balance, while other agencies have developed to be bipartisan as a matter of practice even if not required by law (Datla and Revesz 2013).{{5}} Some agency leaders are required by Congress to have particular backgrounds or expertise as well.{{6}} These requirements are intended to foster expertise and continuity and to limit the influence of partisanship in agency operations. Longer terms allow agency leaders to gain expertise, while limiting the influence of any particular president over agency leadership (as typically a board will not entirely turn over during a single presidential administration). Staggered terms also provide stability in agency operations and enforcement of the law, facilitating institutional memory and preventing dramatic shifts when there are changes in the presidential administration. Bipartisanship and background requirements promote expert decision-making and ensure that agency decisions benefit from a variety of perspectives.

Independent control over congressional testimony, legislative proposals, and budget submissions

Finally, independent agencies benefit from being able to speak with their own voice. For example, in communicating with Congress, traditional executive agencies must coordinate with the White House and get approval of testimony and other formal communications. By contrast—while the details vary from agency to agency—many independent agencies communicate directly with Congress in providing information and responding to congressional oversight. Independent agencies often submit their own legislative proposals and comment on proposed legislation when requested by Congress without coordinating with the White House or other executive branch agencies.{{7}} In addition, while independent agencies’ budget requests are included as part of the president’s budget request to Congress, many independent agencies control the content of those submissions, including descriptions of agency priorities and how funds will be allocated.{{8}} These unfiltered channels of communication facilitate a relationship of trust between independent agencies and Congress, allowing Congress to objectively and carefully monitor whether these agencies are effectively performing their critical watchdog functions. Finally, while many federal agencies are tasked with conducting independent research and producing independent data, independent agencies have the ability to control their own research agendas and produce reliable findings and data that are trusted by outside parties and insulated from political influence.

The Trump administration’s broad attacks on agency independence

In the first few months of his administration, President Trump has taken dramatic steps to exert control over agencies that were intentionally designed by Congress to be insulated from the immediate control of the White House. Most notably, he has fired numerous independent agency heads and board/commission members without cause and has issued several executive orders seeking to fundamentally upend the relationship between independent agencies and the White House.

Firing independent agency leaders

As explained above, most independent agency leaders (at least those on multimember boards and commissions) are protected from removal unless they commit misconduct. Since the start of his administration, President Trump has fired numerous independent agency leaders, either citing no reason at all or explicitly citing policy disagreement, rather than misconduct, as the rationale for the dismissal (Cantor and Sobran 2025).{{9}} Many of these communications emphasized the administration’s view that statutory “for-cause” removal restrictions do not preclude President Trump from firing independent agency commissioners because such protections are an unconstitutional restriction on the president’s executive authority under Article II of the Constitution.{{10}}

These firings are blatantly unlawful. In Humphrey’s Executor v. United States 90 years ago, the Supreme Court established that it is consistent with the Constitution for Congress to establish independent agencies and commissions whose leaders can only be removed by the president for cause.{{11}} Humphrey’s Executor rejected the president’s claim of authority—despite statutory removal protections—to terminate without cause a member of the Federal Trade Commission (FTC). The Court distinguished a prior decision affirming the president’s authority to terminate a postmaster from office by looking to Congress’s purpose in creating the FTC and the functions commissioners perform. The Court explained that the FTC was “created by Congress to carry into effect legislative policies embodied in the statute in accordance with the legislative standard therein prescribed, and to perform other specified duties as a legislative or as a judicial aid,” in contrast to the postmaster, whose duties were restricted to “performance of executive functions” and who was “charged with no duty at all related to either the legislative or judicial power.” The Court concluded that in light of these duties, the FTC “cannot in any proper sense be characterized as an arm or an eye of the executive” because “its duties are performed without executive leave, and, in the contemplation of the statute, must be free from executive control.” The same constitutional principles have been applied to uphold removal protections at other agencies performing “quasi-legislative” or “quasi-judicial” functions, not executive functions—insulating them from removal does not intrude on the president’s constitutional authority to “take care that the laws be faithfully executed” because they are largely not performing purely executive functions.{{12}}

Several fired members of independent agencies and commissions have now filed lawsuits challenging their removals as inconsistent with both their agencies’ authorizing statutes and the Supreme Court’s decision in Humphrey’s Executor (Newhouse 2025). The administration’s response to these lawsuits has made clear that President Trump’s goal is for the Supreme Court to revisit Humphrey’s Executor and ultimately rule that the president has unconstrained authority to fire all agency leaders in the executive branch, including those at independent agencies.{{13}}

Unfortunately, the Supreme Court has strongly signaled that these removal protections may be deemed unconstitutional in the future, at least for agencies that exercise any level of “executive” authority.{{14}} While it is unclear how broadly the Court’s ruling will sweep, eliminating these removal protections would jeopardize all facets of agency independence, as agency leaders would be reluctant to engage in regulatory or enforcement actions—or even day-to-day agency decision-making—without coordinating with the White House for fear of termination.

Implementing new levers of control over day-to-day agency operations

At the same time their leadership was being removed from office, these agencies were also targeted by a wave of new executive orders that undermine their independence in dramatic and unprecedented ways. The first such order, issued on February 18, was entitled “Ensuring Accountability for All Agencies” (The White House 2025a). The order purports to “improve the administration of the executive branch” and “increase regulatory officials’ accountability to the American people” by asserting unprecedented new presidential powers to control the day-to-day operations of independent agencies. These new powers would include:

• giving the director of the Office of Management and Budget (OMB) the authority to control expenditure of the agency’s funds, including defunding “particular activities, functions, projects or objects”;
• requiring all “agency heads” (including, it would seem, each individual member of bipartisan boards, whether Republican or Democrat) to employ a “White House Liaison” as a senior staffer in their offices;
• requiring independent agency chairpersons to “regularly consult with and coordinate policies and priorities with the directors of OMB, the White House Domestic Policy Council and the White House National Economic Council”; and
• giving the director of the OMB the authority to establish and evaluate the “performance standards and management objectives” for independent agency heads.

This level of White House micromanagement undermines the basic structure and function of independent agencies. Congress designed these watchdog agencies to be independent so that they could make decisions—whether about how to prioritize agency objectives, how to most effectively enforce the law, or how to best allocate resources—free from political influence. Independent agencies are often tasked with making decisions that will serve the long-term public interest but may be politically unpopular in the short term. The Federal Reserve provides the most obvious example: It is charged with setting interest rates at a level that will balance the need for maximum employment with the need for stable prices. It is widely acknowledged that allowing an elected official like the president direct control over the Federal Reserve would result in excessive pressure for interest rate reductions that would provide the president with a short-term economic boost, but that would cause long-term inflationary pressure that is detrimental to the economy (Wessel 2025).

Independent agencies are also charged with evenhandedly enforcing the law without favoritism. Giving the White House the ability to pick and choose which prosecutions to fund or which agency objectives to prioritize is fundamentally incompatible with those goals, rendering independent agencies virtually indistinguishable from nonindependent ones, contrary to the clear intentions of Congress.

Usurping independent agency rulemaking authority

President Trump has also used executive orders to undermine independent agencies’ use of their rulemaking powers. These new orders seek to impose a variety of unprecedented constraints on agencies’ ability to use their independent regulatory authority:

• Independent agencies are instructed to review all regulations in their jurisdiction and seek to repeal those deemed inconsistent with “Administration policy.” This substantive review and repeal process must be conducted “in coordination with their DOGE Team Leads and the Director of the Office of Management and Budget” (The White House 2025b).
• Independent agencies must now “consult with their DOGE Team Leads and the Administrator of OIRA” before considering any potential new regulations.{{15}}
• Independent agencies are now required to submit all new regulatory actions to OMB for substantive review before publication (The White House 2025a);
• Independent agencies must seek to immediately repeal any regulation that could be deemed in tension with newer Supreme Court precedents.{{16}}

While policies differ from agency to agency, most independent agencies have historically had independent authority to consider and promulgate new regulations or repeal existing regulations based on their expert judgment, not directives from the White House (or mysterious White House-adjacent entities like DOGE). And they have controlled their own decisions about how to best comply with the Administrative Procedure Act to ensure that their regulatory efforts can survive judicial review. Such independent control of the regulatory process is a critical tool to ensure that watchdog agencies can prioritize protecting the public and serving their statutory missions over politics. In the few months since President Trump issued these orders, the Environmental Protection Agency, for example, has already published a proposed rule to repeal greenhouse gas emissions standards for fossil fuel-powered power plants, citing multiple executive orders by President Trump as the reason for its review of the standard.

Attacks on the independence of agency enforcement

The February 19 order also directly impacts independent agency enforcement of the law, including by:

• giving the president and the U.S. attorney general the ability to override the agency’s own interpretation of the law(s) it administers; and
• directing agency heads to consult with the director of the Office of Management and Budget and then “direct the termination of all . . . enforcement proceedings that do not comply with the Constitution, laws, or Administration policy (emphasis added).”

At most independent agencies, any requirement to coordinate enforcement actions with OMB or to terminate enforcement actions deemed inconsistent with “Administration policy” represents a tectonic shift in enforcement practices. Even traditional executive agencies often retain significant discretion about how they enforce the law and have the authority to initiate and direct their own enforcement actions (DOL 2025). Independent agencies, of course, have traditionally had far greater autonomous control of their enforcement activity. Indeed, these agencies are structured with insulation from political forces precisely so that they can fairly and evenhandedly enforce the law.

Giving the White House control over the enforcement process could effectively nullify important laws protecting the public if the president chooses to override or undermine enforcement efforts. Such interference would be deeply problematic even at traditional executive departments—it is even more untenable at agencies specifically designed by Congress to be insulated from political influence. The potential for political favoritism to influence the enforcement process allows these agencies to be used as tools for corruption and abuse of power, rather than forces for public good.

Case studies

In recent weeks, significant attention has rightly been given to the egregious firing of Lisa Cook, a member of the Federal Reserve Board of Governors, and the implications it will have on our economy in both the short and long term. The following case studies highlight four other independent bodies, illustrating the potential consequences for working families when the autonomy of these agencies are compromised. Each of these agencies plays an essential watchdog role in protecting the public from being abused or cheated by more powerful corporate actors. It is clear that greater presidential interference in their operations could undermine their ability to serve the public.

The National Labor Relations Board

Congress established the National Labor Relations Board (NLRB) in 1935 following decades of strife between management and labor. In the years prior to the Board’s creation, violent labor disputes were common and workers seeking to join unions and improve working conditions faced brutal repression by corporations, private militias, and police (Andrias 2024). Presidents deployed troops to crack down on labor protests and courts frequently stepped in to suppress labor activity (Taft and Ross 1969).{{17}}

In response to this crisis of labor unrest, Congress passed the National Labor Relations Act of 1935 (NLRA). The NLRA empowered workers, giving them a legal right to form and join unions and to bargain collectively for better wages and working conditions. It also protected workers from retaliation for joining together and speaking up about unfair treatment. In service of these goals, the Act established the NLRB to serve as a neutral adjudicator of labor disputes.

While housed within the executive branch, the Board was created to be “an independent quasi-judicial body” that would adjudicate labor disputes as a court.{{18}} The NLRB was designed with many of the classic characteristics of independent agencies. For example, board members are protected from removal by the president except for cause,{{19}} and serve staggered terms of five years—longer than a single presidential administration.{{20}}

The Board hears cases involving both allegations that an employer or union has committed an unfair labor practice (such as threatening a worker for discussing working conditions with colleagues or refusing to bargain with the workers’ union) and cases involving objections that arise during a union election. In hearing these cases, the NLRB acts very much like any other court. Board members are charged with adjudicating each case on its merits free from influence by personal interests{{21}} or the political process.{{22}} The Board’s decision-making procedure must provide parties with due process.{{23}} The NLRB follows its own precedents and Board decisions can be overturned by federal courts of appeals if the agency fails to act consistently with precedent (unless a majority of the Board votes to revisit or overturn precedent in a case).{{24}} The Board keeps its deliberations confidential and communications with parties or outside entities about pending cases are considered a violation of government and judicial ethics rules.{{25}}

In addition to these core adjudicative functions, the NLRB also occasionally engages in rulemaking, either to establish agency procedures or to articulate general principles of substantive law.{{26}} The Board has historically acted independently in these functions and not been subject to substantive regulatory review by the White House.

Throughout its 90-year history, the NLRB has played an essential role in safeguarding the well-being of working people across the country. Because the NLRA protects both the right to form and join a union and the right to engage in employment-related collective action by workers, it is a vital tool to address a myriad of concerns that workers face in the modern economy, including sexual and racial harassment, employee misclassification, and the impact of new technology, among others. In recent years, the NLRB has been extremely effective in serving its statutory goals. In fiscal year 2024, for example, the agency recovered $56.5 million in backpay and other compensation for workers whose rights were violated and secured reinstatement offers for more than 1200 workers who were unfairly terminated from their jobs for trying to unionize or speak out about their working conditions.

The agency has been able to fulfill its mission successfully because it can enforce the law comprehensively and evenhandedly. Independence is a necessary foundation for its success. The NLRB enforces the law—against both employers and unions—without regard for whether the employer or union in question might be a close ally of the president or a supporter of the president’s political party.

How the independence of the agency has been compromised

Since President Trump took office, the historically independent functioning of the NLRB has been severely compromised. On January 28, President Trump fired Gwynne Wilcox, a NLRB member serving in her second term on the Board, whose term was not scheduled to expire until 2028. The removal of Member Wilcox from office was the first time in history that an NLRB member was removed from office by the president. Her departure left the Board without a quorum to hear cases. If the Supreme Court ultimately affirms the president’s ability to terminate NLRB members without cause, the integrity of the Board’s adjudicative process will be severely compromised, as board members will be forced to make decisions with the looming threat of termination hanging over their deliberations. For the same reasons that the framers of the Constitution protected federal judges from termination without cause, Congress should similarly be able to protect board members who adjudicate cases so they can do their jobs fairly.

President Trump’s executive orders also significantly implicate the operations of the NLRB. To be sure, the new executive orders do not expressly give the White House authority to decide or override the outcome of individual cases before independent agencies like the NLRB. However, the unprecedented level of control that the White House is now asserting over agencies could certainly be used that way. Many of the levers of control in these orders—like the ability to fund or defund particular agency actions, the requirement that all board members employ a “White House liaison,” or the unprecedented declaration that independent agencies cannot take legal positions inconsistent with the White House—would potentially allow Trump to directly dictate the outcome of cases before the Board and the substance of federal labor law. This is hardly a farfetched concern. A recent Trump executive order attempts to do just that: It directly instructs the Board to address an unsettled issue of labor law—namely, whether student athletes are considered “employees” or not—in the context of an order that makes clear what Trump’s preferred resolution of this issue would be (The White House 2025e). Such presidential interference into the day-to-day decision-making of the NLRB is completely unprecedented and undermines the fairness and impartiality of the agency’s adjudicative process.

Workers rely on the NLRB to protect critical workplace rights. A worker who has been fired for talking to coworkers about unsafe working conditions or whose employer refuses to bargain with the workers’ chosen union needs somewhere to turn to put a stop to such unfair labor practices. Without any assurance that they will get a fair hearing at the NLRB in the future, workers will be forced to resort to other strategies to make their voices heard and neither workers nor employers will have a path to resolve their disputes and move forward.

The Equal Employment Opportunity Commission

Following mass protests against Jim Crow segregation and a decades-long Civil Rights Movement, Congress established the Equal Employment Opportunity Commission (EEOC) in Title VII of the Civil Rights Act of 1964 (Aiken, Salmon, and Hanges 2013). Title VII represents one of the cornerstones of our national promise of equal opportunity, protecting workers from discrimination on the job based on their race, color, national origin, religion, sex (including sexual orientation and gender identity), age, disability, pregnancy, or genetic information (Couch, Hersch, and Shinall 2025).{{27}} If a worker experiences employment discrimination—such as unfair treatment in hiring, firing, promotions, job assignments, or on-the-job harassment—the EEOC is where they can turn to for help.

To fulfill this vital mission, the EEOC performs three main functions. First, for workers in the private sector, it oversees a thorough process to consider each charge of discrimination (EEOC 2025c). The EEOC will investigate charges; facilitate mediation and conciliation; and—if the agency finds cause to believe that discrimination has occurred, and conciliation fails—can opt to file a lawsuit to enforce the statute.{{28}} While the EEOC commissioners do not directly adjudicate these cases, they must vote on whether the agency will go to court and pursue certain types of significant cases, especially those presenting novel or unsettled legal issues likely to generate public controversy (EEOC 2021).

Second, for complaints where a federal government agency is the employer, the EEOC performs a judicial role. Federal employees who file a discrimination complaint have the right to request a hearing with an administrative judge from the EEOC. If the complainant or the employing agency does not agree with the administrative judge’s decision, they can appeal to the EEOC, which hears and votes on the case as a panel of judges (EEOC 2025e).

Finally, the EEOC issues regulations, guidelines, and formal enforcement guidance, which must be approved by a majority of commissioners (EEOC 2025f, 2025g). The EEOC also issues resource documents, which do not require Commission approval (EEOC 2025h).

From the agency’s inception, Congress took steps to ensure the EEOC’s bipartisan and independent nature. No more than three of the Commission’s five members can be of the same political party and commissioners serve staggered terms of five years—longer than a single presidential administration.{{29}} While Congress did not specifically provide “for-cause” removal protection for commissioners, the EEOC’s structural components qualify it as an independent agency whose commissioners are protected by Supreme Court precedent in Humphrey’s Executor. Additionally, the statute contains a “holdover cause” enabling sitting commissioners to serve until their successors are appointed and qualified, with limits on the maximum length of the holdover period.{{30}} Such holdover provisions are common in independent agencies; they provide continuity and preserve institutional knowledge, while avoiding the uncertainties associated with transitions in presidential administrations and the often lengthy Senate confirmation process.

The EEOC has been extremely effective in accomplishing its mission and its work yields a high return on investment. In 2024, using a $455 million budget, the EEOC secured almost $700 million in monetary relief for about 21,000 victims of employment discrimination and educated more than 268,000 individuals nationwide about employment discrimination and their workplace rights (EEOC 2025a). In the last few years, the Commission has undertaken a number of important initiatives through both rulemaking and litigation, including implementing the Pregnant Workers Fairness Act’s protections to ensure that pregnant workers receive reasonable accommodations in the workplace; educating the public about the implications of artificial intelligence for workplace civil rights; issuing long-awaited guidance on workplace harassment; and historically advancing employment discrimination protections for the LGBTQ+ community (EEOC 2024, 2025a).{{31}}

How the independence of the agency has been compromised

On January 27, President Trump fired EEOC Chair Charlotte Burrows and Vice Chair Jocelyn Samuels before their terms were set to expire in 2028 and 2026, respectively. Their unprecedented removals left the EEOC without a three-member quorum and unable to vote on litigation recommendations or issue federal sector decisions, regulations, enforcement guidance, and other critical rulings. {{32}}

The impact of Trump’s encroachment on the EEOC’s independence has already been felt. For example, the Commission recently dropped lawsuits it had filed on behalf of transgender workers. While agreeing that these workers are protected under civil rights laws, Commission Chair Andrea Lucas explained to Congress that she dropped the cases because her agency is not independent and must comply with President Trump’s orders targeting transgender and nonbinary people (Senate HELP 2025). In June, the EEOC also moved to drop a racial discrimination lawsuit relying on a well-established legal theory regarding the lawfulness of facially neutral policies that have a disproportionately negative impact on disadvantaged groups, again citing an executive order from President Trump (Olson and Savage 2025). According to former EEOC General Counsel David Lopez, dropping these lawsuits constitutes an “unprecedented abdication of [the agency’s] enforcement responsibilities” (Lopez 2025). By abandoning individual lawsuits in response to presidential directives that are contrary to well-established federal laws, the EEOC has effectively empowered the White House to define the contours of civil rights law, contrary to the will of Congress in establishing the EEOC.

Acting Chair Lucas has also undermined the agency’s decision-making process in response to presidential orders. Following Trump’s March 6 executive order, “Addressing Risks from Perkins Coie LLP,” which directs the acting chair of the EEOC to investigate the practices of large law firms, Lucas demanded information from 20 prominent law firms about diversity fellowships and other programs (The White House 2025c; EEOC 2025b). In a letter to Acting Chair Lucas, eight former EEOC members explained that this demand for information exceeds Lucas’s authority as chair. No single member of the Commission has the authority to unilaterally change the EEOC’s long-standing position—reflected in the agency’s majority-approved strategic enforcement plan—regarding employers’ diversity, equity, and inclusion efforts.{{33}} Such policy shifts have historically required a vote by the full Commission, consistent with the intent of Congress that the EEOC—like many other independent agencies—should engage in collaborative and deliberative decision-making.

The EEOC plays a critical role in ensuring that all workers in the U.S. can receive fair treatment and have an equal opportunity to succeed at work. To fully execute its mission, the EEOC must be able to interpret and enforce our civil rights laws free from political influence and presidential whims. The removal of EEOC commissioners who disagree with the president’s agenda, along with recent intrusions into the agency’s prosecutorial independence and deliberative process, is inconsistent with both the independent nature of the agency and the will of Congress, threatening the fundamental protections that everyone should enjoy in the workplace.

Consumer Product Safety Commission

Every day, hundreds of millions of consumers across the U.S. purchase new products that, if not properly designed and built, could inadvertently harm them and their families. In worst case scenarios, companies will recall faulty items from shelves, like when Samsung recalled a version of its Galaxy phone because it could overheat and catch fire; or when Infantino recalled an infant carrier due to faulty buckles that posed a fall hazard; or when Midea recalled specific window AC units because they led to mold growth and respiratory issues (CPSC 2016, 2020, 2025d). These, of course, are the very scenarios companies and consumers hope to never experience. Today, thanks in large part to the Consumer Product Safety Commission, consumers can purchase goods with a certain degree of confidence that what they are bringing into their homes won’t pose a risk to their health and safety. And when things do go wrong, consumers know that systems and processes are in place to remove dangerous goods from our stores.

Congress established the Consumer Product Safety Commission (CPSC) as an independent agency in 1972, charged with protecting consumers from unreasonable risks of injuries (Carpenter 2018). The creation of the CPSC was the result of work under a bipartisan presidential commission examining the mechanisms available at the time to protect consumers. The Commission ultimately recommended Congress pass legislation to create the CPSC. Importantly, during hearings, Congress considered whether to place the CPSC within the then Department of Health, Education and Welfare, but ultimately decided to create an independent agency to insulate the agency’s work from political pressure (Page 1974). Congress empowered the CPSC with authorities to achieve four main objectives: first, conduct research into the injuries and illnesses associated with the use of consumer products; second, facilitate the development of and adherence to safety standards—both through formal rulemaking and engaging industries to adopt voluntary standards; third, aid consumers as they seek to understand and compare the safety risks of various products; and finally, protect consumers from unreasonable risks associated with the goods they purchase.{{34}}

Today, the CPSC’s efforts cover an extremely broad set of consumer products—from children’s toys, to household appliances, cribs, and mattresses.{{35}} Importantly, the CPSC authority covers products made both domestically and abroad.{{36}} Beyond advancing research and standard-setting, the CPSC has numerous enforcement tools at its disposal, including conducting compliance inspections at factories, warehouses, or establishments where products are made or held. The CPSC also has the authority to obtain samples of products imported into the U.S. When the CPSC determines that a product that is already on the market poses a substantial hazard to consumers, it seeks remedial actions either by engaging companies directly to negotiate a corrective action agreement or pursuing administrative actions that culminate in a vote by the Commission and mandate for specific corrective actions. While recalling products is perhaps the most widely recognized corrective action of the CPSC, there are several actions that CPSC and companies can undertake, including: notifying the public of the hazard; modifying the product so that it is in compliance with safety standards; and providing refunds to consumers, among other actions.{{37}}

The CPSC has many of the classic characteristics of independent agencies.{{38}} It is led and overseen by five commissioners, one of which is designated as the chair. Commissioners are appointed by the president and approved by the Senate, serving seven-year terms. By statute, they can only be removed from office for “neglect of duty or malfeasance in office.” Congress has also stipulated that no more than three members of the Commission could be from the same political party.

How the independence of the agency has been undermined

Last year, consumers spent more than $6.2 trillion on consumer goods, many of which are regulated by the CPSC. Most products purchased every day are safe for consumers to use in large part thanks to the ongoing efforts by the CPSC to develop and update standards as new or improved products enter the market. Nonetheless, in this year alone, CPSC has issued numerous recalls, including in once instance bike helmets which failed to protect individuals and could result in head injury (CPSC 2025a). The purpose and independence of the CPSC is as crucial as ever to consumers’ health and safety. Alarmingly though, Trump has sought to politicize this little-known agency that plays an outsized role in the day-to-day lives of everyone in the U.S.

In May, Trump fired three members of the Commission who were nominated by President Biden and had not yet served their full terms: Mary Boyle, Alexander Hoehn-Saric, and Richard Trumka Jr. (Quinn 2025). While a federal district court and the Fourth Circuit Court of Appeals both found the firings unlawful and temporarily reinstated the commissioners, the Supreme Court stayed the district court’s order and they were removed from office again (Quinn 2025; Howe 2025). The activities that unfolded at the Commission during the initial period that these three Commissioners were gone highlight the potential damage of politicizing this independent agency. On May 13, 2025, the remaining two commissioners voted to stop the Federal Register from publishing a proposed regulation establishing safety standards for Lithium-Ion batteries in micro mobility products, such as e-bikes and e-scooters (CPSC 2025c). The Commission had previously approved the adoption and publication of this proposed rule in April in response to its finding that over 220 people were injured or killed by such batteries between 2019 and 2023 (CPSC 2025b). While the district court’s reinstatement of the fired commissioners enabled them to (at least temporarily) correct the actions taken in their absence, the danger to consumers of a politicized CPSC was clear.

Now that the three commissioners have been removed again, the risk to consumers returns. For example, the chair of the Commission serves as the principal executive of the CPSC and has the authority to appoint, upon approval of the Commission, a number of positions with the CPSC, including an executive director; general counsel; and assistant executive directors of compliance and administrative litigation, health sciences, and engineering, among others. Now that the three commissioners have been removed again, the chair (with the approval of the remaining member) could potentially take significant personnel actions, such as replacing industry experts with political operatives.

When Congress created the CPSC it sought to create an independent agency that established and enforced safety standards that were driven by the independent expertise of the agency and without influence from conflicts of interest or political swings of power. Yet the Trump administration’s recent efforts to undermine the CPSC and politicize its actions not only runs counter to the intent of Congress but also puts the health and safety of U.S. families at risk.

National Credit Union Administration

For more than 115 years, credit unions have provided vital financial services to individuals, businesses, and communities across the United States (NCUA 2023). As nonprofit financial institutions that are membership-based, credit unions have long provided services—including low-interest car loans and mortgages—to individuals and communities that may be underserved by corporate banks. Today, more than 143 million people in the U.S. are members of a credit union (NCUA 2025c). This includes, for example: the Teachers Credit Union, which was founded more than 70 years ago by educators in New York; credit unions that serve rural areas like the Guadalupe Credit Union in Santa Fe, New Mexico; and credit unions like the State Employees Credit Union, which provides services to state employees in North Carolina, among others.{{39}}

The first credit unions in the United States were established in the early 1900s and continued to grow in numbers as states—beginning with Massachusetts—passed laws to certify and regulate them (NCUA 2023). In 1934, following the financial crisis of the Great Depression, Congress passed the Federal Credit Union Act (FCUA), which created a uniform federal standard and process for certifying and regulating credit unions.{{40}} Originally, Congress charged the Farm Credit Administration—an independent agency—to implement the FCUA (NCUA 1989). In the years following, the federal credit union system moved to a variety of federal agencies, including the Federal Deposit Insurance Corporation (FDIC). By 1970, Congress created a stand-alone independent agency—the National Credit Union Administration (NCUA)—headed by a single administrator. And then in just a few short years, Congress again amended the Act in 1978 to establish the structure that remains in place today (NCUA 2023). Most notably, Congress replaced the single administrator of the NCUA with a three-member board, capping a long series of actions to ensure the federal oversight of credit unions in the United States was entrusted to an independent agency and sufficiently insulated from swings in the political views of the executive branch. The NCUA’s independence allows it to make unbiased decisions based on sound financial principles to best serve the communities that credit unions support (ACU 2025).

Today, the NCUA charters and regulates credit unions, ensuring that members’ hard-earned money remains safe and that they can access the financial resources they need to pursue dreams like higher education and home ownership. By the beginning of 2025, there were more than 143 million members of federally insured credit unions across the United States. Combined, these members have nearly $2.4 trillion dollars invested in their credit unions (NCUA 2025c). The NCUA plays a vital role in ensuring that credit unions are stable institutions and that members’ deposits are adequately protected, most notably through the management of the National Credit Union Share Insurance Fund. Like the FDIC, this fund insures members’ deposits up to $250,000 (NCUA 2025b). The NCUA also enforces a range of regulations that aim to maintain the strength and stability of the credit union system. This includes, for example, regulations regarding the investment and deposit activities, capital adequacy, and mergers of credit unions, among other activities

Since 1979, a three-member board has led and managed the activities of the NCUA. The board is structured similarly to other independent agencies. Under the FCUA, board members are appointed by the president and approved by the Senate to serve a six-year term.{{41}} The statute states that “[n]ot more than two members of the board shall be members of the same political party.”{{42}} Importantly, when Congress restructured the NCUA so that it was led by the board, it removed all references in the statute to the leadership “serving at the pleasure of the President.”{{43}} While many day-to-day functions of the agency, including examination and supervision of credit unions, are executed by agency staff, the board approves and carries out crucial functions of the agency. Specifically, the board sets policies and procedures for the agency; directs and approves its regulatory actions, including proposed and final rules; and serves as a final appeals board for agency actions against credit unions. Under the statute and regulations, the board meets every month and must have a quorum of a majority of board members to hold meetings.{{44}}

How the agency’s independence has been undermined

In April, President Trump took unprecedented actions that undermined the NCUA’s overall independence and ability to function. Specifically, Trump fired two Democratic members of the board—Todd Harper and Tanya Otsuka—leaving a single board member. Harper and Otsuka have sued President Trump over their firing claiming that the actions violated both the Federal Credit Union Act as well as the Constitution.{{45}} While a district court found they were unlawfully terminated, a court of appeals stayed the district court’s order and they remain unable to perform their duties. While this litigation is pending there is significant confusion and uncertainty about how the NCUA board can or will function.

As discussed above, the FCUA states that there must be a majority of board members to have a quorum and meet. Crucially, the statute does not explicitly contemplate a situation in which there are vacancies on the board, let alone only one member left. Indeed, the statute has holdover protections to ensure there aren’t vacancies on the board, allowing members to serve beyond their six-year term until a replacement member is approved.

The actions taken by Trump in the short term will likely hamper the ability of the NCUA to carry out important functions, including an annual rolling review of one-third of its regulations. This year the NCUA has identified 36 regulations which will be reviewed by the agency (NCUA 2025a). Additionally, fired board member Harper recently highlighted that there are a number of individual credit unions whose ratings by the NCUA indicate that the board should be engaging more closely in the review and potential regulatory actions against these entities, which combined hold $112 billions in assets (Mullen 2025). Without a full board in place to take necessary actions, these credit unions and their members may be at financial risk.

Conversely, if the single remaining board member attempts to move forward with typical board actions on his own, this would directly undermine the intent of Congress and the statute, i.e., ensuring that the agency and board are not influenced entirely by a single political party. These actions would also most likely be subject to legal challenges, creating additional uncertainty in the credit union market.{{46}} Similarly, if courts eventually allow the firings of the Democratic board members to stand, this would be a significant departure from Congress’ clearly expressed intent to move the management of the NCUA away from a structure that is under the direct influence of the president.

Trump’s executive orders intruding on agency independence also pose challenges for the NCUA. For example, the new requirement that agencies submit proposed and final regulations to OMB for White House review and approval is particularly challenging for the NCUA, which reviews one-third of its regulations every year and issued 12 new proposed or final regulations in 2024 alone.{{47}} At a minimum, extensive involvement by the White House will inevitably delay the regulatory process. More alarming is the prospect that the White House will demand substantive changes to regulations (whether new proposals or regulations already on the books) that undermine the NCUA’s independence or do not reflect the best judgments of its expert leaders, putting the communities that rely on affected credit unions at risk.

For the 143 million people who have their savings in a credit union, the uncertainty at the NCUA board at best may cause greater financial stress and uncertainty. For some, the administration’s actions may call into question the ability of the federal government to fairly and adequately regulate the financial institutions people have entrusted their savings with or secured loans from. Over time, undue political influence over the NCUA—either through changes in the board structure or overt influence of its regulatory process—could create instability in the credit union system and subsequently motivate members to move out of the system entirely, undermining the financial security of the many unique communities that credit unions serve.

Conclusion

For more than 100 years, the United States has relied on independent agencies to provide essential protections to workers, consumers, retirees, and the general public. Congress carefully and intentionally designed these agencies—like the Federal Reserve and the Environmental Protection Agency—to ensure they could fully realize their missions without being directly affected by political influence, presidential favoritism, or interest group politics. While the laws these agencies administer have been modified periodically through the years, Congress has not wavered from its commitment to preserve their independence. These agencies can serve the public effectively because they prioritize expertise, promote stable and consistent enforcement of the law, and make policy choices that elevate long-term public good over short-term political gain.

Preserving independence is about more than good governance: It’s about protecting the public. These agencies ensure that workers are able to join together with their co-workers to form a union and bargain for better wages and working conditions, apply for a job knowing that they are protected from discrimination, put their earnings in a local credit union, and purchase household goods without fear of them being unsafe.

Since taking office, President Trump has waged an unprecedented assault on independent agencies, in some cases firing board members and commissioners despite explicit legal prohibitions, politicizing agencies’ rulemaking processes, and—in many instances—bringing the functions of these agencies to all but a halt. These actions not only have immediate consequences for workers and the public—they also create tremendous potential for abuses of power over time that could let wealthy corporations pad their profits at the expense of ordinary people’s lives and livelihoods. The systematic attack on independent agencies deserves more attention and opposition from Congress, both to defend its prerogative to create public watchdogs within the executive branch and to protect the people these important agencies were designed to serve.

Acknowledgements

The authors thank Patrick Oakford for his invaluable contributions and insight in the production of this report and gratefully acknowledge Century Foundation Intern Zoe Wang for her essential research assistance.

Notes

{{1.}} 28 U.S.C. § 516 (2017).

{{2.}} Sometimes agencies only have independent authority to litigate in certain subject matter areas, while others have independent authority to litigate only until a matter gets to the Supreme Court (at which point the agency is represented by the solicitor general). Rarely, an agency will have independent litigating authority that encompasses even Supreme Court litigation—with the primary modern example being the Federal Trade Commission.

{{3.}} The precise statutory language establishing such removal protections can vary but typically says that appointed officials can only be removed for “inefficiency, neglect of duty, and malfeasance in office” or some similar standard and sometimes requires elements of due process before a removal can take place, such as notice and opportunity for a hearing.

{{4.}} See Table 4 in Selin and Lewis (2018).

{{5.}} The National Labor Relations Act, for example, does not contain any requirement that the National Labor Relations Board be comprised of bipartisan members, but historically a bipartisan balance has been maintained.

{{6.}} For example, the director of the Federal Housing Finance Agency must have extensive understanding of financial management, capital markets, mortgage securities, and housing finance. For further information, see Table 7 in Selin and Lewis (2018).

{{7.}} See Table 12 in Selin and Lewis (2018).

{{8.}} See Table 12 in Selin and Lewis (2018).

{{9.}} For example, Merit Systems Protection Board Chair Cathy Harris’s termination message cited no reason for her dismissal (Harris v. Bessent, D.C. Cir. R. 2025); Equal Employment Opportunity Commissioner Jocelyn Samuels’s termination message criticized her for “enacting or enforcing the Biden administration’s radical Title VII guidance” (Samuels v. Trump, D.D.C. 2025); and National Labor Relations Board Member Gwynne Wilcox termination message cited, among other things, “improperly cabin[ing] employers’ rights to speak on the subject of unionization” and supporting the Board’s joint-employer rule (Bruenig 2025).

{{10.}} Harris v. Bessent; Samuels v. Trump; Bruenig (2025).

{{11.}} 295 U.S. 602 (1935).

{{12.}} While the Supreme Court subsequently narrowed the scope of Humphrey’s Executor’s reach to exclude independent agencies headed by only one official rather than a multimember body (see Seila Law LLC v. Consumer Financial Protection Bureau, 591 U.S. 2020) the Court subsequently reaffirmed that Humphrey’s Executor remains good law. See Collins v. Yellen, 594 U.S. (2021) explaining that Seila Law “did not revisit our prior decisions allowing certain limitations on the President’s removal.”).

{{13.}} See Acting Solicitor General Harris’s February 2025 letter to Senator Dick Durbin (Harris 2025), indicating the Department of Justice’s intention to argue that Humphrey’s Executor should be overruled.

{{14.}} Wilcox v. Trump (D.D.C. 2025).

{{15.}} Wilcox v. Trump.

{{16.}} See The White House (2025d). The order strongly implies that any regulation whose legality was previously upheld under the deferential Chevron standard of judicial review applied by the federal courts before the Supreme Court’s recent decision in Loper Bright Enterprises v. Raimondo (U.S. 2024) should be considered for immediate repeal. (This directive is of dubious legality, as it instructs agencies not to use the notice-and-comment process required by the Administrative Procedure Act to repeal a substantive regulation. It also stands in significant tension with the Supreme Court’s explicit direction in Loper Bright that prior cases upholding agency action under the Chevron standard remain good law).

{{17.}} See Starbucks Corp. v. McKinney, 602 U.S. 339, 355 (2024) (Jackson, J., concurring) (describing federal courts’ “ignominious history”); see also Boys Markets, Inc. v. Retail Clerks, 398 U.S. 235, 250 (1970).

{{18.}} See Roosevelt (1935) noting these functions “should not be confused.”

{{19.}} Roosevelt (1935). The Act thus adopted the same independent agency model that the Supreme Court had endorsed for the Federal Trade Commission in Humphrey’s Executor, a decision handed down less than two months before Congress established the Board. See Free Enter. Fund v. Public Co. Accounting Oversight Bd. (2010), 561 U.S. 477, 547 (Breyer, J., dissenting); Dish Network Corp. v. NLRB (2020). 953 F.3d 370, 375 n.2 (5th Cir. 2020).

{{20.}} See 29 U.S.C. § 153(a).

{{21.}} See ExxonMobil Rsch. & Eng’g Co., Inc. v. NLRB, No. 23-60495, 2025 WL 782692 (5th Cir. Mar. 12, 2025), which upholds the agency’s vacatur of a prior decision where an NLRB member participated in the case in violation of federal ethics rules regarding financial conflicts of interest.

{{22.}} See Pillsbury Co. v. Federal Trade Comm’n, 354 F.2d 952 (5th Cir. 1966), which overturned an administrative decision of the Federal Trade Commission that was subject to undue congressional influence.

{{23.}} See Berkshire Emps. Ass’n of Berkshire Knitting Mills v. NLRB 121 F.2d 235 (3d Cir. 1941).

{{24.}} See NLRB v. CNN America (2017).

{{25.}} See OIG-NLRB (2012), which finds that a member’s chief counsel improperly disclosed deliberative information about pending matters to parties outside the Board.

{{26.}} 29 U.S.C. § 156.

{{27.}} See Bostock v. Clayton Cty., 590 U.S. 644 (2020).

{{28.}} See EEOC (2025d). Otherwise, the agency will issue the charging party a “right to sue” letter, enabling them to sue on their own behalf in federal court.

{{29.}} Civil Rights Act of 1964, Pub. L. No. 88-352, 78 Stat. 241 (1964).

{{30.}} 42 U.S.C. § 2000e-4(e).

{{31.}} See Macy v. Department of Justice, EEOC Appeal No. 0120120821, 2012 WL 1435995 (EEOC Apr. 20, 2012) and Lawrence v. Office of Personnel Management, EEOC Appeal No. 0120162065 (May 30, 2024).

{{32.}} The five-member commission is now comprised of only two members: Republican Chair Andrea Lucas and Democratic Commissioner Kalpana Kotagal. EEOC’s general counsel, Karla Gilbride, was also fired that same day. Former Commissioner Samuels has since filed a lawsuit.

{{33.}} The EEOC initiates most investigation in response to complaints filed by employees. Commissioners can file their own charge, but it would not be made public and would require the commissioner to provide evidence of discrimination under penalty of perjury. This is to prevent the Commission from seeking to intimidate employers through public pressure.

{{34.}} 15 U.S. Code § 2051; see Carpenter (2018) for a discussion of rulemaking authority. 

{{35.}} Congress excluded from the agency’s scope of coverage products that are regulated by other federal agencies, such as motor vehicles, tobacco products, food, and drugs.

{{36.}} See Carpenter (2018).

{{37.}} See Carpenter (2018). 

{{38.}} 15 USC § 2053.

{{39.}} For more information on these credit unions, see TFCU (2025), GCU (2025), and SECU (2025).

{{40.}} Pub. Law. No. 76-466.

{{41.}} 12 U.S. Code §1752a.

{{42.}} 12 U.S. Code §1752a(b)1.

{{43.}} See Harper v. Bessent.

{{44.}} 12 U.S. Code §1752a(d); 12 CFR 791.5.

{{45.}} See Harper v. Bessent.

{{46.}} The FCUA does not include a numerical requirement to establish a quorum but instead simply states that “a majority of the Board shall constitute a quorum.” See 12 U.S. Code §1752a (d).

{{47.}} See: 89 FR 104865; 89 FR 79380; 89 FR 79397; 89 FR 67890; 89 FR 65242; 89 FR 64538; 89 FR 60549; 89 FR 60329; 89 FR 45602; 89 FR 31117; 89 FR 17710; 89 FR 1441.

References

Aiken, Juliet, Elizabeth Salmon, and Paul Hanges. 2013. “The Origins and Legacy of the Civil Rights Act of 1964.” Journal of Business and Psychology 28, no. 4: 383–399. 

America’s Credit Unions (ACU). 2025. “Re: Importance of an Independent National Credit Union Administration.” Letter to the United States DOGE Service, January 27, 2025.

Andrias, Kate. 2024. “Constitutional Clash: Labor, Capital, and Democracy.” Columbia Public Law Research Paper no. 5165411, March 2025.

Bruenig, Matt. 2025. “Read the Trump Email Firing Member Wilcox and GC Abruzzo.” NLRB Edge, January 30, 2025.

Cantor, Gabriella, and Hannah Sobran. 2025. Tracking Trump’s Unprecedented—Often Illegal—Firings of Political Appointees and Watchdogs. Citizens for Responsibility and Ethics in Washington, March 31, 2025.

Carpenter, David H. 2018. The Consumer Product Safety Act: A Legal Analysis. Congressional Research Service, April 24, 2018.

Congressional Labor Caucus (CLC). 2025. “Bipartisan Group of 265 Lawmakers Urge Trump to Reinstate NLRB Member Wilcox, Protect Workers’ Rights” (press release). February 13, 2025.

Consumer Product Safety Commission (CPSC). 2016. “Samsung Recalls Galaxy Note7 Smartphones Due to Serious Fire and Burn Hazards” (web page). September 15, 2016.

Consumer Product Safety Commission (CPSC). 2020. “Infantino Recalls Infant Carriers Due to Fall Hazard” (web page). February 6, 2020.

Consumer Protection Safety Commission (CPSC). 2025a. “NQDTPBOR Helmets Recalled Due to Risk of Head Injury; Violation of Federal Regulations for Bicycle Helmets; Sold Exclusively on Amazon.com by TPBOR” (web page). January 23, 2025.

Consumer Product Safety Commission (CPSC). 2025b. Memorandum, Subject: Corrections to Draft Proposed Rule to Establish a Safety Standard for Lithium-Ion Batteries Used in Micromobility Products and Electrical Systems of Micromobility Products Containing Such Batteries. March 26, 2025.

Consumer Product Safety Commission (CPSC). 2025c. “Record of Commission Action: Withdrawal of Notice of Proposed Rulemaking to Establish a Safety Standard for Lithium-Ion Batteries Used in Micromobility Products and Electrical Systems of Micromobility Products Containing Such Batteries.” May 13, 2025.

Consumer Product Safety Commission (CPSC). 2025d. “Midea Recalls About 1.7 Million U and U+ Window Air Conditioners Due to Risk of Mold Exposure” (web page). June 5, 2025.

Copeland, Curtis W. 2013. Length of Rule Reviews by the Office of Information and Regulatory Affairs. Report prepared for the Administrative Conference of the United States, December 2013.  

Corrigan, Patrick M, and Richard L. Revesz. 2017. “The Genesis of Independent Agencies.” New York University Law Review 92, no. 3: 637–697. 

Couch, Kenneth, Joni Hersch, and Jennifer Bennett Shinall. 2015. “Fifty Years Later: The Legacy of the Civil Rights Act of 1964.” Journal of Policy Analysis and Management 34, no. 2: 424–456.

Datla, Kirti, and Richard L. Revesz. 2013. “Deconstructing Independent Agencies (and Executive Agencies).” Cornell Law Review 98, rev. 769. 

Department of Labor (DOL). 2025. “About the Office of the Solicitor” (web page). Accessed August 20, 2025.

Department of Labor (DOL). n.d. “What We Do” (web page). Accessed August 20, 2025.

Dudley, Susan E. 2025. “Starting This Week, Independent Regulatory Agencies Face White House Review of Their Regulations.” Forbes, April 23, 2025.

Economic Policy Institute (EPI). 2025a. “Firing NLRB Board Member Gwynne Wilcox.” Federal Policy Watch (Economic Policy Institute), January 27, 2025.

Economic Policy Institute (EPI). 2025b. “Firing MSPB Member Cathy Harris.” Federal Policy Watch (Economic Policy Institute), February 10, 2025.

Economic Policy Institute (EPI). 2025c. “Firing FLRA Chair Susan Tsui Grundmann.” Federal Policy Watch (Economic Policy Institute), February 11, 2025.

Equal Employment Opportunity Commission (EEOC). 2021. “Resolution Concerning the Commission’s Authority to Commence or Intervene in Litigation and the Commission’s Interest in Information Concerning Appeals.” Published January 13, 2021.

Equal Employment Opportunity Commission (EEOC). 2024. “EEOC Issues Final Regulation on Pregnant Workers Fairness Act” (press release). April 15, 2024.

Equal Employment Opportunity Commission (EEOC). 2025a. 2024 Annual Performance Report. January 17, 2025.

Equal Employment Opportunity Commission (EEOC). 2025b. “EEOC Acting Chair Andrea Lucas Sends Letters to 20 Law Firms Requesting Information About DEI-Related Employment Practices” (press release). March 17, 2025.

Equal Employment Opportunity Commission (EEOC). 2025c. “What Happens to Your EEOC Charge” (web page). Accessed August 20, 2025.

Equal Employment Opportunity Commission (EEOC). 2025d. “What You Can Expect After a Charge is Filed” (web page). Accessed August 20, 2025.

Equal Employment Opportunity Commission (EEOC). 2025e. “Overview of Federal Sector EEO Complaint Process” (web page). Accessed August 20, 2025.

Equal Employment Opportunity Commission (EEOC). 2025f. “Regulations and Guidelines” (web page). Accessed August 20, 2025.

Equal Employment Opportunity Commission (EEOC). 2025g. “EEOC Guidance” (web page). Accessed August 20, 2025.

Equal Employment Opportunity Commission (EEOC). 2025h. “EEOC Resource Documents” (web page). Accessed August 20, 2025.

Gambino, Lauren, and Michael Sainato. 2025. “White House Installs Trump Loyalist to Lead Independent Agency in Push to Reduce Foreign Aid.” The Guardian, March 4, 2025.

Gangitano, Alex. 2025. “Trump Signs Order to Dismantle 7 Federal Agencies Focused on Media, Libraries, Homelessness.” The Hill, March 15, 2025.

Goldstein, Matthew, and Emily Steel. 2025. “Trump Fired E.E.O.C. Commissioners in Late-Night Purge.” New York Times, January 28, 2025.

Goodwin, James. 2020. The Progressive Case Against OIRA. Center for Progressive Reform, August 2020.

Guadalupe Credit Union (GCU). 2025. “About Guadalupe Credit Union” (web page). Accessed August 22, 2025.

Haberman, Maggie, and Colby Smith. 2025. “Trump Has Draft of Letter to Fire Fed Chair. He Asked Republicans if He Should Send It.” New York Times, July 16, 2025.

Acting Solicitor General Harris. 2025. “Re: Restrictions on the Removal of Certain Principals Officers of the United States.” Letter to Senator Richard Durbin, February 12, 2025.

Howe, Amy. 2025. “Supreme Court Sides with Trump Administration in Battle over Ability to Remove Agency Commissioners.” SCOTUSblog, July 23, 2025.

Inskeep, Steve. 2025. “Why Independent Agencies Were Created To Be Independent.”  NPR, February 20, 2025.

Mullen, Caitin. 2025. “NCUA’s Harper: Firings Laying Groundwork for Fed Dismissals.” Banking Dive, May 2, 2025.

National Credit Union Administration (NCUA). 2023. “Historical Timeline” (web page). Last modified January 26, 2023.

National Credit Union Administration (NCUA). 2025a. “Regulatory Review” (web page). Last modified March 21, 2025.

National Credit Union Administration (NCUA). 2025b. “Share Insurance Coverage” (web page). Last modified May 20, 2025.

National Credit Union Administration (NCUA). 2025c. Quarterly Credit Union Data Summary 2025 Q1. March 2025.

National Credit Union Administration (NCUA). 1989. 1989 Annual Report.

Newhouse, Sean Michael. 2025. “Ousted Independent Agency Leaders Detail How They’re Fighting Their Firings.” Government Executive, April 23, 2025.

Office of the Federal Register, National Archives and Records Administration (Federal Register). 2025. The United States Government Manual 2025, January 13, 2025.

Office of Inspector General, National Labor Relations Board (OIG-NLRB). 2012. Report of Investigation –OIG-I-468. March 19, 2012.

Office of Management and Budget (OMB). 2025. Memorandum, Subject: Interim Guidance Implementing Section 3 of Executive Order 14215, Titled “Ensuring Accountability for All Agencies.” April 17, 2025.

Olson, Alexandra, and Claire Savage. 2025. “Sheetz Racial Discrimination Case Is on the Chopping Block as Trump Rewrites Civil Rights.” Associated Press, June 6, 2025.

Page, Joseph A. 1974. “Consumer Involvement and the Consumer Product Safety Act.” Hofstra Law Review 2, no. 2: 605–618. 

Peck, Emily. 2025. “Trump Fires Two Board Members from Credit Union Regulator, Raising Fears About the Fed’s Independence.” Axios, April 16, 2025.

Quinn, Melissa. 2025 “Trump asks Supreme Court to Let Him Fire Member of Consumer Product Safety Commission.” CBS News, July 2, 2025.

Roosevelt, Franklin D. 1935. “Statement on Signing the National Labor Relations Act.” July 5, 1935. Online by Gerhard Peters and John T. Woolley, The American Presidency Project.

Rubin, April. 2025. “Trump Administration Notifies Congress It Will Close USAID.” Axios, March 28, 2025.

Rugaber, Christopher, and Will Weissert. 2025. “Trump Says He’s Firing Fed Governor Lisa Cook, Opening New Front in Fight for Central Bank Control.” AP News, August 26, 2025.

Senate Committee on Health, Education, Labor and Pensions (Senate HELP). 2025. “Hearing on Nominations of Jonathan Berry to be Solicitor, Department of Labor, Andrew Rogers to be Administrator of the Wage and Hour Division, Department of Labor, Anthony D’Esposito to be Inspector General, Department of Labor and Andrea Lucas to be a Member, Equal Employment Opportunity Commission.” June 18, 2025.

Selin, Jennifer L., and David E. Lewis. 2018. Sourcebook of United States Executive Agencies. Administrative Conference of the United States, October 2018.

Shao, Elaine, and Ashley Wu. 2025. “The Federal Work Force Cuts So Far, Agency by Agency.” New York Times, May 12, 2025.

State Employees’ Credit Union (SECU). 2025. “About Us” (web page). Accessed August 22, 2025.

Stella, Shiva. 2025. “Public Knowledge Defends FCC Independence in First Circuit Amicus Brief.” Public Knowledge, April 25, 2025.

Taft, Philip, and Philip Ross. 1969. “American Labor Violence: Its Causes, Character, and Outcome.” Violence in America: Historical and Comparative Perspectives, National Commission on the Causes & Prevention of Violence.

Teachers Federal Credit Union (TFCU). 2025. “About Teachers Federal Credit Union” (web page). Accessed August 22, 2025.

Wessel, David. 2025. “Why is the Federal Reserve independent, and what does that mean in practice?” The Brookings Institution, May 23, 2025.

The White House. 2025a. “Ensuring Accountability for All Agencies.” Exec. Order No.14215, 90 Fed. Reg. 10447 (February 18, 2025).

The White House. 2025b. “Ensuring Lawful Governance and Implementing the President’s ‘Department of Government Efficiency’ Deregulatory Initiative.” Exec. Order No. 14219, 90 Fed. Reg. 10583 (February 19, 2025).

The White House. 2025c. “Addressing Risks from Perkins Coie LLP.” Exec. Order No. 14230, 90 Fed. Reg. 11781 (March 6, 2025).

The White House 2025d. Memorandum, Subject: Directing the Repeal of Unlawful Regulations. April 9, 2025.

The White House 2025e. “Saving College Sports.” Exec. Order No. 14322, 90 Fed. Reg. 35821 (July 24, 2025).