Director, Product Classification
U.S. Postal Service
475 L’Enfant Plaza S.W., Room 4446
Washington, DC 20260-5015
PCFederalRegister@usps.gov 

Re: Proposed Rule: Ballot Mail for Federal Elections

The Economic Policy Institute (EPI) is a nonprofit, nonpartisan think tank that for 40 years has centered working families in economic policy discussions. EPI is submitting these comments in response to the Postal Service’s proposed rule on Ballot Mail for Federal Elections,1 which would have a disparate impact on Americans who face barriers to voting in person, including workers with disabilities, working parents, and workers with long and unpredictable work shifts. For this and other reasons outlined below, we believe that the proposed rule should be abandoned permanently and in its entirety.

The proposed rule follows a March 31, 2026, executive order from President Trump2 that would require the Postal Service to set new standards for the design of ballot envelopes used by state and local jurisdictions to facilitate centralized tracking of ballots to and from individual voters, thus encroaching on the authority to regulate and administer elections that the Constitution assigns to Congress and the states. The proposed rule also directs the Postal Service to compile a national voter list from state voter rolls and to reject ballots addressed to voters who are not on the list or that do not conform to the new envelope standard.

Tellingly, the proposed rule does not instruct the Postal Service to notify voters whose ballots were not delivered so that voters can challenge these decisions and correct errors caused by typos and similar discrepancies, which are vastly more common than deliberate fraud. Discrepancies and gaps in government records are not purely random, but are more likely to affect people with uncommon or hyphenated names (including many foreign-born citizens), married women who changed their names, and elderly and low-income Americans, among others.3

The proposed rule would misuse government data for political purposes.

The proposed rule should be viewed in the larger context of actions taken by this administration to use government data for unauthorized purposes, including voter suppression.

In addition to directing the Postal Service to compile a list of registered voters and use it to restrict mail voting, other provisions of the president’s executive order direct the United States Citizenship and Immigration Services (USCIS) and the Social Security Administration (SSA) to compile lists of voting-age citizens in each state, even though there is no evidence that fraudulent voting by noncitizens is a problem in U.S. elections.4 However, purging voter lists of suspected noncitizens could be used to disenfranchise eligible voters.

A case pending before the U.S. Supreme Court that would weaken the National Voter Registration Act could enable voter purges of suspected noncitizens close to elections when voters have little time to challenge errors that are common in such purges.5 Since some groups are more likely to vote for particular parties, purges can be weaponized for partisan advantage, a problem that would be magnified if done on a national scale.

The executive order adds to previous efforts by this administration to use SSA and other sensitive personal data for purposes beyond their intended use. It also risks another data breach in violation of federal privacy laws similar to an earlier breach of SSA data by a DOGE operative.6

The proposed rule would discourage voting by mail and harm working families who are more likely to face barriers to in-person voting.

Importantly, the harm inflicted by the proposed rule would extend beyond eligible voters who are directly prevented from voting by mail because they do not appear on the Postal Service list of registered voters. By casting doubt on the integrity and impartiality of mail voting, the rule would increase the number of voters dissuaded from voting by mail who later find themselves unable to vote in person.

Thirteen states, along with Puerto Rico and the Virgin Islands, restrict absentee voting to voters who know they will be out of the county on election day, or, in some states, who face barriers related to age, health, disability, work schedules, or other conflicts, such as jury duty.7 In my personal capacity as a volunteer on a voter assistance hotline, I can attest that many, if not most, people who face barriers to in-person voting could not have predicted them in advance. Voters frequently fall sick, face long lines at the polls that threaten to make them late for work, or find themselves with last-minute childcare and transportation problems.

Even voters who face predictable barriers that are valid reasons for absentee voting in their state can find it difficult to determine whether they qualify since specifics are not spelled out or are buried in dense legal language. What counts as a disability? Is documentation required? What if an anticipated work shift, jury duty, or vacation does not happen?

As the Institute for Policy Studies has pointed out, working-class voters are more likely to face barriers to voting in person due to work and family obligations.8 The Shift Project at the Harvard Kennedy School has documented the large number of low-wage workers, disproportionately workers of color, who work long and unpredictable shifts with little input into their schedules.9 In-person voting hours vary by state, but typically span a 12- or 13-hour time period.10 For working parents transporting children to school, workers with long commutes, and workers who face mobility challenges, it can be difficult if not impossible to vote in person within the designated window, especially if lines at the polls are long. Though some white-collar workers face these challenges, low-wage workers are less likely to work from home, have predictable schedules, or be given flexibility by employers to vote.

The Postal Service should scrap the proposed rule.

The above-mentioned constitutional, voting rights, and logistical problems with the proposed rule have been described in lawsuits and in commentary from a wide range of stakeholders and perspectives, including Lawfare,11 the Cato Institute,12 and the American Postal Workers Union.13 Twenty-three states and the District of Columbia successfully sued to temporarily block the executive order on which the proposed rule is based.14 However, the administration has said they will challenge the ruling, and regardless the rule could still take effect after the upcoming November election (the focus of the temporary injunction).

EPI believes that the proposed rule should be abandoned permanently and in its entirety for the following reasons:

• It is an unlawful attempt by the executive branch to seize control of elections from states and Congress.15
• It would inflict reputational damage on the Postal Service by involving it in decisions about who can and cannot receive ballots and vote by mail.16
• It would impose financial and logistical burdens on the Postal Service, which is already stretched to its limit.17
• It could jeopardize the timely delivery of all mail ballots, including those that conform to the requirements of the rule.18
• In combination with other provisions of the executive order, it could facilitate systematic voter purges for partisan advantage.
• It would cast doubt on the integrity and impartiality of mail voting.
• It would dissuade eligible voters from voting by mail, many of whom will face barriers to voting in person.

The Postal Service is an independent agency that, by design, is not under the direct control of the president and therefore not subject to his executive order.19 It has impartially delivered mail ballots to voters since the Civil War, when states introduced absentee voting for soldiers, a right later extended to other absentee voters. Some states have also extended vote by mail to voters who face specific barriers to in-person voting, such as people with disabilities. Other states and the District of Columbia have gone much further, mailing ballots to all registered voters. This is by far the fairest solution, but until it is the law of the land, we should work to extend, not restrict or suppress, mail voting.

Respectfully submitted,

Monique Morrissey
Senior Economist

Endnotes 

1. “Ballot Mail for Federal Elections: A Proposed Rule by the Postal Service on 06/02/2026,” Federal Register Published Document: 2026-10968 (91FR 32915). https://www.federalregister.gov/documents/2026/06/02/2026-10968/ballot-mail-for-federal-elections

2. Donald J. Trump, “Ensuring citizenship verification and integrity in federal elections,” March 31, 2026. https://www.whitehouse.gov/presidential-actions/2026/03/ensuring-citizenship-verification-and-integrity-in-federal-elections/

3. Monique Morrissey and Daniel Costa, “Cleaning up administrative records or targeting immigrants?” https://www.epi.org/blog/cleaning-up-administrative-records-or-targeting-immigrants/ 

4. See, for example, Wren Orey, Theresa Cardinal Brown, Feyisayo Oyolola, and Theo Menon, “Four Things to Know about Noncitizen Voting,” Bipartisan Policy Center, February 20, 2026. https://bipartisanpolicy.org/article/four-things-to-know-about-noncitizen-voting; Michael Waldman, “Why the Myth of Noncitizen Voting Persists,” Brennan Center for Justice, August 21, 2024. https://www.brennancenter.org/our-work/analysis-opinion/why-myth-noncitizen-voting-persists. Stephen Richer, “Trump’s Claims About Noncitizens Voting Are False. We Can Prove It.” Cato Institute, February 5, 2026. https://www.cato.org/commentary/trumps-claims-about-noncitizens-voting-are-false-we-can-prove-it

5. Jim Saksa, “Supreme Court will hear Arizona case that could badly weaken key federal law protecting voter registration,” Democracy Docket, June 29, 2026. https://www.democracydocket.com/news-alerts/supreme-court-will-hear-arizona-case-that-could-badly-weaken-key-federal-law-protecting-voter-registration/

6. Stephen Fowler and Jude Joffe-Block, “The Trump administration admits even more ways DOGE accessed sensitive personal data,” Weekend Edition, National Public Radio, January 30, 2026. https://www.npr.org/2026/01/23/nx-s1-5684185/doge-data-social-security-privacy

7. National Council of State Legislatures, Table 2: Excuses to Vote Absentee, website accessed July 2, 2026. https://www.ncsl.org/elections-and-campaigns/table-2-excuses-to-vote-absentee

8. Sarah Anderson, “Attacks on Mail Voting are Attacks on the Working Class,” Institute for Policy Studies, April 6, 2026. https://ips-dc.org/attacks-on-mail-voting-are-attacks-on-the-working-class/

9. Daniel Schneider and Kristen Harknett, “It’s About Time: How Work Schedule Instability Matters for Workers, Families, and Racial Inequality,” October 16, 2019. https://shift.hks.harvard.edu/its-about-time-how-work-schedule-instability-matters-for-workers-families-and-racial-inequality/

10. Ballotpedia, “State Poll Opening and Closing Times (2026),” website accessed July 2, 2026. https://ballotpedia.org/State_Poll_Opening_and_Closing_Times_(2026)

11. Molly Roberts, “What’s up with Trump’s Mail-In Voting Executive Order?” Lawfare, Monday, June 29, 2026. https://www.lawfaremedia.org/article/what-s-up-with-trump-s-mail-in-voting-executive-order

12. Stephen Richer, “USPS Issues Proposed Mail Voting Rules Pursuant to Trump Executive Order,” Cato at Liberty blog, May 29, 2026. https://www.cato.org/blog/usps-issues-proposed-mail-voting-rules-pursuant-trump-executive-order

13. Jonathan Smith, APWU Comments on Proposed Rule: Ballot Mail for Federal Elections, June 29, 2026. https://apwu.org/wp-content/uploads/2026/06/APWU-Comments-VBM-Rulemaking.pdf

14. Dion Nissenbaum, “Federal judge blocks key pillars of Trump executive order restricting mail voting in 2026 election,” VoteBeat, June 25, 2026. https://www.votebeat.org/national/2026/06/25/trump-election-overhaul-mail-voting-executive-order-blocked-talwani-usps-dhs/

15. Molly Roberts, “What’s up with Trump’s Mail-In Voting Executive Order?” Lawfare, Monday, June 29, 2026. https://www.lawfaremedia.org/article/what-s-up-with-trump-s-mail-in-voting-executive-order

16. Smith, op. cit.

17. Ibid.

18. Ibid.

19. Ibid.

June 22, 2026

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

Re: Proposed Rule: Joint Employer Status Under the Fair Labor Standards Act, Family and Medical Leave Act, and Migrant and Seasonal Agricultural Worker Protection Act (RIN 1235-AA48)

Dear Mr. Navarrete,

We write to submit this comment on behalf of the Economic Policy Institute (EPI), responding to the Department of Labor’s proposed rule on Joint Employer Status Under the Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), and Migrant and Seasonal Agricultural Worker Protection Act (MSPA). 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.

EPI strongly opposes the Department of Labor’s (DOL’s) proposed rulemaking and urge the agency to withdraw this rule. If implemented, we conservatively estimate this rule would cost workers roughly $1 billion annually through increases in workplace fissuring and exposure to wage theft. Further, the FLSA’s joint employer definition is also used to apply protections under FMLA, MSPA, the Providing Urgent Maternal Protections (PUMP) for Nursing Mothers Act (now part of the FLSA), and the Equal Pay Act. Under the proposed rule, workers thus would not only be at risk of losing full protections to their right to earn the minimum wage over overtime pay, but also their right to unpaid but job-protected family and medical leave, pay discrimination protections, and the right to pump breastmilk while at work. Agricultural workers, already operating in notoriously underpaid and hazardous conditions, will also find it harder to enforce or get compensation for violations of their rights to the basic pay and housing requirements for agricultural workers under MSPA. Because of the broad impacts of structural racism and sexism on labor market outcomes, women and people of color are overrepresented in low-wage jobs overall, which are particularly vulnerable to fissuring and wage theft. As a result, women workers and workers of color are likely to be disproportionately harmed if this rule is finalized.

The proposed rule would undermine the original intent of the FLSA

At its most basic, the joint employer standard simply requires that when multiple employers co-determine or share control over a workers’ terms of employment (such as pay, schedules, and job duties), each of those employers is responsible for compliance with worker protection laws. Given the realities of the modern workplace, in which employees often find themselves subject to more than one employer, workers deserve a joint employment standard under the FLSA that guarantees these basic rights and protections.

As the American Civil Liberties Union (ACLU) has argued in their joint comments, also cosigned by EPI, the NPRM contravenes the statutory definition of “employ” under the FLSA, Supreme Court precedent. This rule also shares the same substantive defects as DOL’s 2020 Final Rule, which was largely invalidated by a federal district court in New York v. Scalia, 490 F. Supp. 3d 748 (S.D.N.Y. 2020).

EPI has conducted extensive research and policy analysis on the harms to workers from weakened labor standards and weakened enforcement of those standards. There is no question that this proposed rule would weaken labor standards. As with the first Trump administration’s attempt at weakening these regulations, this rule would dramatically narrow the set of circumstances whereby a firm can be found to be a joint employer under the FLSA. The FLSA is our nation’s fundamental worker protection statute, providing wage and hour protections to the vast majority of U.S. workers. The FLSA was drafted broadly, and its definition of an employer was intended to cover most workplaces and most workers. The intention was and should remain that companies that use staffing agencies, temporary workers, or subcontractors in their business operations are held accountable for complying with the FLSA’s basic provisions, including minimum wage, overtime, and child labor protections. The proposed rule will make it nearly impossible for many workers in those types of workplaces to enforce these rights. It would also take away the ability of workers to recover unpaid wages from firms who use undercapitalized contractors in their work.

We believe it is also important to acknowledge some of the most frequently referenced critiques of a broad, protective joint employer standard, from those who would like to see that standard weakened. One argument, already present in some of the comments that the Department has received on this rule, is that this weakened standard is necessary to provide regulatory clarity for franchisee employers in particular. The International Franchise Association, for example, says this proposed rule “protects the independence of franchise small businesses.”1 However, these arguments obscure the fact that it is already large corporate franchisors who stand to benefit the most from having this “independence” protected.

Franchisee operators already bear the full responsibility for violations of the FLSA that occur on their watch, even if those violations may have been more likely to occur because of requirements or pressure exerted on them in their business agreements with the large corporate franchisors. Nothing in the FLSA’s current joint employer standard automatically labels a franchisor-franchisee relationship as a joint employment scenario. On the contrary, the longstanding joint employer standard is not one-size-fits-all, and always requires looking at multiple factors to determine how much control each entity is actually exerting on a worker. We urge the Department not to adopt a proposed rule that would continue to allow large employers to conceal their real interest—minimizing their own liability for FLSA violations—as a goal that is aligned with the best interests of small business owners and franchise operators.

The Department’s flawed economic analysis overlooks that workers will lose pay if this rule is implemented

DOL continues its misguided evaluation of the likely impacts of the proposed joint employer standard in its economic impact analysis. DOL has a responsibility to consider all relevant data in advancing this regulatory standard, but it fails to do so. The NPRM states that “the Department does not expect that there would be significant transfer effects as a consequence of the proposed rule,” explaining that “nothing in the proposed rule would reduce the wages owed to employees under the FLSA or MSPA [emphasis added].”2 

However, even if the proposed rule would not change the wages due to a worker under the FLSA or MSPA, this does not mean that the proposal will not result in transfers between employers and employees. It would, in at least two ways.

First, this rule would incentivize workplace “fissuring,” i.e., employers increasing their reliance on contractors, subcontractors, temporary help agencies, and franchises rather than hiring employees directly—a practice that suppresses workers’ wages.  The Department dismisses the idea that the rule would incentivize fissuring by essentially simply asserting that such concerns are “largely inapplicable” to this rulemaking.3  We, however, conservatively estimate that in the long run, the increase in workplace fissuring as a result of the rule would result in a transfer of at least $772.0 million from workers to employers annually. This calculation is discussed in depth below.

Second, this rule would increase losses due to wage theft by employers. The Department acknowledges that this is an issue when it states that “some workers in vertically-tiered industries may, in some cases, have more or less difficulty collecting their owed wages,” 4 but, astonishingly, dismisses this concern by stating, without evidence, that “the magnitude of this effect is unlikely to be significant.”5  We conservatively estimate that an increase in losses due to wage theft as a result of the rule will result in a transfer of at least $225.6 million from workers to employers annually. This calculation is discussed in depth below.

Putting together these two estimates—more than $772.0 million lost by workers as a result of the rule due to an increase in workplace fissuring and more than $225.6 million in losses by workers as a result of wage theft—we estimate workers will lose roughly one billion dollars ($997.6 million) annually as a result of this rule if it is finalized.

Quantifying the transfers from workers to employers due to an increase in fissuring

According to data from the Bureau of Labor Statistics’ 2023 Contingent Worker Supplement (CWS), there are 862,000 workers who work for contract firms and 945,000 workers who work for temporary help agencies.6 However, the CWS undercounts these workers. This is due in part to the fact that workers self-report what kind of firm they work for and may erroneously report that they work for the company where they are doing their work instead of for the contract firm or temporary help agency that placed them at that site. Establishment surveys—where the firm, not the worker, does the reporting—get around this problem. High-quality establishment data on employment in contract firms do not exist to our knowledge, but there are excellent establishment data on employment in temporary help agencies from the Bureau of Labor Statistics’ Current Establishment Survey (CES). These data show that there were 2.50 million workers in temporary help agencies in 2025,7 well over double (2.64 times) what is reported in the latest CWS. Adjusting the number of contract workers by the same multiple (2.64) results in an adjusted estimate of the number of contract workers of 862,000 * 2.64 = 2.28 million.

It is important to note that we believe this estimate still undercounts contract workers, because the CWS includes only one very specific type of contract worker in its count of workers employed by contract firms—workers who are usually assigned to only one client and usually work at the client’s worksite. That excludes the many contract workers who work for multiple clients (e.g., janitorial workers or IT consultants) or offsite (e.g., call center workers or industrial laundry workers). We do not attempt to quantify this undercount.

Another important form of fissuring in the workplace is the increasing reliance on franchising models. Data from the U.S. Census Bureau’s 2017 Economic Census Franchise Statistics Report show that franchise employment in 2017 in key sectors where franchising is common was 9.59 million.8  Since 2017 is the latest year these data are available, we inflate the value by the growth rate in overall payroll employment between 2017 and 2025, 8.1%, from the Current Employment Statistics establishment survey of the Bureau of Labor Statistics.9  This results in an estimated level of franchise employment for 2025 of 10.36 million.

Putting this all together, we conservatively estimate that in 2025, there were a total of 15.14 million employees working in “fissured establishments”—working for temporary help agencies (2.50 million), working for contract firms (2.28 million), or working for franchises (10.36 million). It is important to note the degree to which this estimate of the fissured workplace is likely an undercount. David Weil estimated that in 2017, 18.9 percent of private-sector production and nonsupervisory workers—20.8 million workers in 2025—were in highly fissured industries, and that if additional fissured workers in occupations and in industries with mixed use of practices were included, that share could easily double.10

Because the rule would mean that employers would be able to avoid liability for FLSA violations for many workers in fissured establishments while still substantially controlling the wages and working conditions of those workers, companies will be incentivized to restructure and outsource parts of their business. Research shows that the wage losses associated with this kind of domestic outsourcing are substantial, on the order of 5% long-run earnings losses.11 Thus the rule will result in a substantial transfer away from workers whose firms decide, as a result of the rule, to outsource the work that they do.

CES data show that the average weekly earnings of production and nonsupervisory workers in temporary help services in 2025 was $932.12 A 5% penalty (noted above) for working in a fissured workplace implies that these workers would be earning $981 if they were directly hired, a difference of $49 per week. Combined with our estimate of 15.14 million employees working for fissured establishments, we find that every percent increase in fissuring as a result of the rule would, in the long run, lead to a wage loss of $386.0 million annually.13 That means that an increase in domestic outsourcing of just 2 percent as a result of the rule—an implausibly conservative increase considering employers would newly be able to avoid liability for FLSA violations while still substantially controlling the wages and working conditions of domestically outsourced workers—would lead to a transfer of $772.0 million annually from workers to employers. Further, it is important to note that using the broader estimate, described above, of 20.8 million private-sector production and nonsupervisory workers in the fissured workplace, that number would be $1.1 billion.

Quantifying the transfers from workers to employers due to an increase in wage theft

Wage theft—the practice of employers failing to pay workers the full wages to which they are legally entitled—is a widespread and deeply rooted problem that directly harms millions of U.S. workers each year. Employers refusing to pay promised wages, paying less than legally mandated minimums, failing to pay for all hours worked, or not paying overtime premiums deprives working people of billions of dollars annually. It also leaves hundreds of thousands of affected workers and their families in poverty.14 Wage theft does not just harm the workers and families who directly suffer exploitation; it also weakens the bargaining power of workers more broadly and puts downward pressure on hourly wages in affected industries and occupations. For many low-income families who suffer wage theft, the resulting loss of income forces them to rely more heavily on public assistance programs, unduly straining safety net programs and hamstringing efforts to reduce poverty.

In 2008, Bernhardt et al. surveyed front-line workers in low-wage industries in the cities of Chicago, Los Angeles, and New York and found that two-thirds (68 percent) of these workers experienced at least one pay-related violation in any given week.15 The researchers estimated that the average cost to these workers over a year was $2,634 out of a total earnings of $17,616—15.0 percent of their wages. This adds up to a total of nearly $3 billion annually stolen across all forms of wage theft among these workers in 2008. Generalizing these three-city, 2008 results to the nationwide 2025 workforce, we estimate that low-wage workers in the U.S. lost $52.5 billion to all forms of wage theft in 2025.16

It is worth noting that though the Bernhardt et al. study is somewhat dated, more recent studies show that labor violations remain so prevalent that it is likely that simply extrapolating from the Bernhardt et al. study, as we have, will generate conservative numbers.  For example, a 2024 study out of the Shift Project at Harvard Kennedy School found that nearly all (91%) hourly service sector workers in California experienced at least one labor violation in the prior year.17

The proposed rule would increase losses due to wage theft by employers in at least three ways. Each of these impacts will be particularly acute in industries in which there is high reliance on subcontracting, temporary work, and other alternative work arrangements, where there is already a disproportionate occurrence of wage theft.18

First, the proposal would severely limit the ability of millions of workers to get justice when they are victims of wage theft. By limiting workers’ ability to recover wages from firms that contractually have the right to act with respect to the terms and conditions of employment, DOL is depriving workers of long-held rights to recover unpaid wages from their employers.

Second, there will be a reduction in wage theft deterrence caused by the reduction, as a result of the rule, of workers’ ability to recover wages. This reduction in wage theft deterrence will likely lead to an increase in wage theft.

Third, by allowing firms that hire contractors to avoid legal liability for wages, the rule would give these firms greater incentive to award contracts to undercapitalized firms that are more likely to have low bids on the basis of not paying their workers what they are owed. And, absent the legal liability stemming from being a joint employer, if the contractor goes out of business, the lead business is not liable for the lost wages of the workers. In other words, this rule would increase the incentive for firms to seek out undercapitalized contractors who will provide lower bids to the companies that use them—bids that are able to be so low because the contractors plan to steal from their workers (by underpaying them or not paying them at all).19

As described above, an estimated $52.5 billion was lost by low-wage workers to all forms of wage theft in 2025. We use several sources of data to estimate how much of that $52.5 billion was lost by workers in fissured establishments. As noted above, we conservatively estimate that in 2025, there were a total of 15.14 million employees working in “fissured establishments”—working for temporary help agencies (2.50 million), working for contract firms (2.28 million), or working for franchises (10.36 million).

To determine how many of these 15.14 million workers are low-wage, we turn to CWS microdata, which allow us to calculate the share of workers in contract firms and temporary help services who are low wage workers.  Unfortunately, microdata from the most recent (2023) CWS survey have not yet been released, so we use microdata from the 2017 CWS survey. We find that the share of workers in contract firms or in temporary help services who are low-wage—defined as earning $12 per hour or less in 2017—is 36.3 percent. Given wage growth between 2017 and 2025, $12 in 2017 was roughly equivalent to $17 in 2025.20 

Franchise workers are not identified in the CWS, so we simply assume that the share of workers in franchise firms who are low-wage is the same as the share of workers who are low-wage in contract firms and temporary help services. Multiplying 36.3% by our estimate of 15.14 million total workers in fissured establishments, we estimate that there are 5.5 million low-wage workers in fissured establishments.

There were 25.6 million workers who made less than $17 an hour in 2025,21 which means that 21.5 percent (5.5 million/25.6 million) of low-wage workers are in fissured establishments. Assuming that the incidence of wage theft among low-wage workers is no higher in fissured establishments than in traditional establishments (an extremely conservative assumption), we can simply multiply this 21.5 percent by the total amount of wage theft from low-wage workers—$52.5 billion—to estimate the amount of wage theft in fissured establishments. This comes out to $11.28 billion.

Annual wage theft of $11.28 billion in fissured establishments means that every percent increase in losses due to wage theft would lead to an aggregate transfer from workers to employers of $112.8 million annually. This means that an increase in losses due to wage theft of just 2 percent as a result of the rule—an implausibly conservative increase considering many former joint employers would newly be able to avoid liability for FLSA violations—would lead to an aggregate transfer from workers to employers every year of $225.6 million. Further, it is important to note that using the broader estimate described above of 20.8 million private-sector production and nonsupervisory workers in the fissured workplace, that number would be $309.8 million.

Conclusion

DOL’s proposed rule undermines the original intent of our nation’s fundamental worker protection laws and, if implemented, its impact on working people will be negative and significant. The proposed rule would incentivize the further “fissuring” of the workplace, putting strong downward pressure on wages, and it would make it nearly impossible for millions of workers to get justice when they are the victims of wage theft. Conservatively, we estimate that, if implemented, this rule would cost workers just under $1.0 billion annually—more than $772.0 million due to wage suppression from an increase in workplace fissuring and more than $225.6 million from an increase in wage losses due to wage theft by employers. We urge DOL to abandon this flawed rulemaking and ensure a meaningful joint employer standard under the FLSA, our nation’s fundamental worker protection law.

Sincerely,

Heidi Shierholz, Ph.D.
President
Economic Policy Institute

Samantha Sanders
Director of Government Affairs & Advocacy
Economic Policy Institute

Endnotes

1. International Franchise Association (IFA). 2026. “IFA Praises Trump Administration Joint Employer Rule” (press release). April 22, 2016.

2. 91 Fed. Reg. 21909

3. 91 Fed. Reg. 21909

4. 91 Fed. Reg. 21909

5. 91 Fed. Reg. 21910

6. Bureau of Labor Statistics, “Table 5. Employed workers with alternative and traditional work arrangements on sole or main job by selected demographic characteristics, July 2023,” Contingent and Alternative Employment Arrangements, November 2024.

7. U.S. Bureau of Labor Statistics, All Employees, Temporary Help Services [TEMPHELPS], retrieved from FRED, Federal Reserve Bank of St. Louis. Accessed June 2026 at https://fred.stlouisfed.org/series/TEMPHELPS. 

8. U.S. Census Bureau, “Franchising in America: Key Data from the 2017 Economic Census,” September 2021.

9. U.S. Bureau of Labor Statistics, All Employees, Total Nonfarm [PAYEMS], retrieved from FRED, Federal Reserve Bank of St. Louis. Accessed June 2026 at https://fred.stlouisfed.org/series/PAYEMS.

10. David Weil, “Understanding the Present and Future of Work in the Fissured Workplace Context,” Working Paper, Brandeis University, May 2019.

11. Dorn, D., Schmieder, J. F., Spletzer, J. R. (2018). Domestic Outsourcing in the United States. Chief Evaluation Office, U.S. Department of Labor; Deborah Goldschmidt and Johannes F. Schmieder, “The Rise of Domestic Outsourcing and the Evolution of the German Wage Structure,” Quarterly Journal of Economics 132, no. 3 (August 2017): 1165–1217; Arindrajit Dube and Ethan Kaplan, “Does Outsourcing Reduce Wages in the Low-Wage Service Occupations? Evidence from Janitors and Guards,” ILR Review 63, no. 2 (January 2010): 287–306.

12. Bureau of Labor Statistics, Current Employment Statistics (BLS-CES). Table B-8, Average hourly and weekly earnings of production and nonsupervisory employees on private nonfarm payrolls by industry sector, seasonally adjusted. Various years. Accessed June 2026 at https://www.bls.gov/webapps/legacy/cesbtab8.htm.

13. $386.0 million = 15.14 million * $49 * 52 weeks in a year * 1%.

14. Margaret Poydock and Jiayi (Sonia) Zhang, More than $1.5 billion in stolen wages recovered for workers between 2021 and 2023, Economic Policy Institute, December 2024; David Cooper and Teresa Kroeger, Employers Steal Billions from Workers’ Paychecks Each Year: Survey Data Show Millions of Workers Are Paid Less Than the Minimum Wage, at Significant Cost to Taxpayers and State Economies, Economic Policy Institute, May 2017.

15. Annette Bernhardt et al., Broken Laws, Unprotected Workers: Violations of Employment and Labor Laws in America’s Cities, 2009, Center for Urban Economic Development, National Employment Law Project, and UCLA Institute for Research on Labor and Employment, 2009.

16. Generalizing the three-city, 2008 results to the nationwide 2025 workforce required several adjustments. The low-wage workforce in the Bernhardt et al. study represented 15.1% of all workers in those cities, and 68% of those workers experienced at least one pay-related violation in the prior week. This implies that at least 15.1%*68% = 10.3% of all workers experienced wage theft in a given week. Data from the BLS Current Employment Statistics (CES) survey shows there were158.5 million nonfarm payroll employees in 2025 nationwide. Applying the 10.3% estimate to that workforce yield 16.3 million workers, meaning that at least 16.3 million workers nationwide likely experienced wage theft in any given week in 2025. Bernhardt et al. found that workers who experienced wage theft lost, on average, 15% of their weekly earnings. Using the BLS Current Population Survey (CPS), we find that the lowest-paid 15.1% of workers who are 18 years old or older and worked at least five hours per week —a conservative proxy for the population surveyed in Bernhardt et al.—had median weekly earnings of $352 in 2025. Assuming 15% losses due to wage theft, the earnings of workers experiencing wage theft would have been $414 if wage theft hadn’t occurred, an average loss of $62. Multiplying the estimated16.3 million workers experiencing wage theft by the average loss of $62, we find that the total amount lost by low wage workers to wage theft in a given week is $1.01 billion. Annualized, this amounts to $52.5 billion in wages stolen from low-wage workers each year.

17. Daniel Schneider, Elizabeth Kuhlman, Kristen Harknett, and David Weil. 2024. Compliance and the Complaint Gap: Labor Standards Violations in the California Service Sector. The Shift Project at Harvard Kennedy School, May 2024.

18. Annette Bernhardt et al., Broken Laws, Unprotected Workers: Violations of Employment and Labor Laws in America’s Cities, 2009, Center for Urban Economic Development, National Employment Law Project, and UCLA Institute for Research on Labor and Employment, 2009.

19. This is an argument made by Judge Easterbrook in Reyes v. Remington Hybrid Seed Co. 495 F.3d 403 (7th Cir. 2007). In that decision, Easterbrook notes, “If Zarate [the labor broker in the case] had been solvent, Remington [the lead business in the case] would have to offer him enough that he could pay all the workers’ wages (including the minimum wage and any overtime premium), cover the costs of fringe benefits such as housing, and still be able to make a profit. But when a contractor has no business or personal wealth at risk, he may be tempted to stiff the workers (as Zarate did) and then treating the principal firm as a separate employer is essential to ensure that the workers’ rights are honored.”

20. $12 was 66.1% of the median wage in 2017, and 66.1% of the median wage in 2025 was $16.97.  Economic Policy Institute, State of Working America Data Library, “Hourly wage percentiles – Nominal hourly wage,” 2026.

21. Low-Wage Workforce Tracker, Economic Policy Institute, January 2026.

June 1, 2026

The Honorable Daniel Aronowitz
Assistant Secretary
Employee Benefits Security Administration
U.S. Department of Labor
200 Constitution Avenue NW
Washington, DC 20210

Re: Fiduciary Duties in Selecting Designated Investment Alternatives, RIN 1210-AC38

Dear Assistant Secretary Aronowitz:

I submit these comments on behalf of the Economic Policy Institute (EPI) on the Department of Labor’s (DOL) Notice of Proposed Rulemaking on Fiduciary Duties in Selecting Designated Investment Alternatives.

EPI is a nonprofit, nonpartisan think tank that has worked for 40 years to center working families in economic policy discussions.

EPI strongly opposes the Employee Benefits Security Administration’s (EBSA’s) proposed rule on Fiduciary Duties in Selecting Designated Investment Alternatives. The rule would gut protections for retirement savers in 401(k) and other participant-directed plans covered by the Employee Retirement Income Security Act of 1974 (ERISA). In addition to our comments here, EPI has signed onto a joint comment letter with other consumer, retiree, and worker advocacy organizations expressing concern that the rule would add complexity, raise fees, and return us to an era when retirement plan participants had little protection from poor investment choices. This letter will expand on that letter to critique some of the economic arguments made in support of the proposed rule.

This letter will focus on risk, questioning EBSA’s claim that loosening protections for retirement savers will maximize risk-adjusted returns by providing access to alternative investments.

• EBSA attempts to redefine fiduciaries’ duty of prudence in selecting investment options as “maximizing risk-adjusted returns net of fees” no matter the risk rather than balancing the goals of maximizing returns and minimizing risk. (Unless otherwise noted, quotations are from the proposed rule.)
• EBSA ignores the fact that retirement savers face a worse principal-agent problem than defined benefit pension funds, since investment options are chosen by plan fiduciaries but participants bear the risk of losses.
• EBSA ignores the fact that even if pension funds that invest in alternative assets earn an illiquidity and risk premium (a big “if”), and even if individual retirement savers retire at the time they planned to (another big “if), individual retirement savers with limited investment horizons face greater timing risk and should be more risk averse.
• EBSA assumes that any asset class that does not move in sync with stock and bond markets adds useful diversification even if it is a speculative asset with a zero expected real return that only adds volatility.
• EBSA’s case for asset class diversification rests on modern portfolio theory, which assumes investors are well-informed and risk-averse, which is not a realistic description of markets for alternative assets.
• EBSA focuses narrowly on asset class diversification, ignoring the fact that adding alternative assets can concentrate rather than spread risk if these assets cannot be indexed.

Plan fiduciaries must adhere to a duty of prudence and a duty of loyalty.

Under ERISA, fiduciaries may be sued by participants or the Department of Labor (DOL) for breach of these duties when selecting investment options for participant-directed plans. Fiduciaries are required to have or obtain the expertise and information to make substantively sound decisions—going through the motions or acting with good intentions is not enough.

With minor exceptions, such as limits on employer stock, ERISA does not specify what types of investments may be included in 401(k) and similar plans. Nevertheless, plan fiduciaries, using their good judgement and leery of lawsuits, have generally avoided alternative investments that cannot be marketed to small and unsophisticated (nonaccredited) investors in other contexts. Instead, fiduciaries have increasingly moved toward low-cost index funds and similar broadly diversified and publicly traded investments that are recognized as appropriate options for retirement savers.

Lawsuits on behalf of plan participants who suffer losses from fiduciaries’ failure to uphold their duties are a critical enforcement tool. According to AARP, “Courts have repeatedly recognized that these cases play a meaningful role in improving plan governance, reducing excessive fees, and protecting participants’ long-term retirement security, without burdening employers that comply with the law.”1

The stated purpose of the proposed rule is to expand access to alternative investments.

EBSA claims that the threat of lawsuits harms retirement savers by limiting investment options available to plan participants. EBSA claims that “regulatory burdens and litigation risk…interfere with the ability of American workers to achieve…the competitive returns and asset diversification necessary to secure a dignified and comfortable retirement.”

The proposed rule includes a list of alternative assets that President Trump earlier mentioned in an executive order, including private equity, private credit, digital assets (“crypto”), and commodities.

EBSA notes that under ERISA these assets are not explicitly prohibited from being included among investment options in participant-directed plans. However, EBSA warns that plan fiduciaries may be excluding more complex investment options “not necessarily in response to a prudent assessment of whether the features in those investments are best suited to the needs of plan participants and beneficiaries, but rather because of the risk of litigation if plan fiduciaries depart from more traditional investments in favor of more creative or novel options.” It provides no evidence for that assertion and does not rebut the valid presumption that this could be the framework operating as intended: fiduciaries have made prudent assessments, found these assets wanting, and decided against them— recognizing that doing otherwise would appropriately expose them to litigation risk.

EBSA reframes the goal as maximizing risk-adjusted returns” no matter the risk rather than balancing risk and return.

According to EBSA, ERISA gives fiduciaries “maximum discretion and flexibility” to determine which investment options “offer the opportunity for participants to maximize risk-adjusted returns on their retirement assets net of fees.”

However, the goal of ERISA, as the name makes clear, is retirement income security, not “maximizing risk-adjusted returns net of fees.” Under ERISA, fiduciaries are required to select a diversified menu of investment options that minimize the risk of large losses for retirement savers.2 Such losses can be caused by sharp downturns or by cumulative underperformance over many years. Retirement savers will face both types of risk if they invest directly or indirectly in the alternative assets listed in the proposed rule.

Leverage is the most obvious way to maximize risk-adjusted returns, but also the most obvious way to amplify the risk of large losses. Reputable financial advisors do not advise retirement savers to maximize risk and return through leverage, even in the case of early career workers who have more time to adjust their contributions to the plan if their risky strategy fails.

EBSA ignores the subject of leverage entirely in the proposed rule, as well as any discussion of the appropriate level of portfolio risk for retirement savers (except to claim that asset diversification reduces it). Implicitly, then, EBSA’s self-described “asset-neutral” approach is also neutral with respect to the amount of risk retirement savers should face, focusing only on maximizing returns for any level of risk. This is especially dangerous given the widespread but mistaken belief that investment returns will average out over long investment horizons.3

Encouraging risky investments harms not only unsophisticated retirement savers, but also taxpayers who subsidize accounts intended to help ordinary workers save for retirement.

Though certain risky investment options may benefit wealthy participants with a high risk tolerance, the tax advantage is intended to promote retirement savings, and retirement security, for ordinary workers, not amplify wealth inequality.

Regulatory agencies have repeatedly warned of alternative asset risks.

DOL and other regulators previously acknowledged the risks associated with private market investments, including opacity, lack of regulatory oversight, complexity, illiquidity and high fees. In a June 3, 2020, letter to private equity managers, DOL noted that private equity investments had longer time horizons, higher fees, no easily observed market value, and were subject to different regulatory requirements and oversight than publicly traded securities.4

The letter suggested that plan fiduciaries might want to limit private equity investments to a specified percentage of a fund, have the investments independently valued according to agreed-upon financial standards, and require additional disclosures to meet the plan’s ERISA obligations to report information about the current value of the plan’s investments. These suggestions were generally ignored in the proposed rule.

After the Securities and Exchange Commission (SEC) issued a risk alert on June 23, 2020,5 warning that private equity and hedge fund investors may have paid more in fees and expenses than they should have and may not have been informed of conflicts of interest,

DOL issued a supplemental statement on December 21, 2021,6 citing the SEC warning and stakeholder comments challenging the earlier letter’s uncritical acceptance of some industry talking points, notably the claim that private equity could “offer plan participants who have longer investment horizons an equities-based investment choice that may enhance retirement outcomes when compared to investment choices containing only publicly traded securities.” The DOL statement also noted that while some fiduciaries have experience evaluating private equity investments for defined benefit pensions, many fiduciaries of small individual account plans do not.

The DOL statement was rescinded in response to President Trump’s executive order of August 7, 2025,7 without addressing any of the issues raised about the advisability of including private market investments among 401(k) plan options.

DOL and other regulators have also previously been highly skeptical of crypto as an investment, let alone one offered to retirement savers. On May 11, 2021, the SEC issued a staff statement warning that Bitcoin and Bitcoin futures were highly speculative investments.8 On January 10, 2024, SEC Chair Gary Gensler went further, describing Bitcoin as “primarily a speculative, volatile asset that’s also used for illicit activity including ransomware, money laundering, sanction evasion, and terrorist financing.”9 The Federal Reserve and other bank regulatory agencies also issued multiple warnings about crypto assets.10

Citing the SEC warnings, DOL issued guidance on March 10, 2022, advising 401(k) plan fiduciaries to exercise “extreme care” before adding cryptocurrencies to plan options, noting that they were difficult to valuate, even by experts, and posed custodial and recordkeeping concerns.11

The Federal Reserve and other bank regulators rescinded their guidance on April 24, 2025, and DOL followed suit on May 28, 2025, without addressing any of the issues raised about crypto risks. Beginning in 2025, the SEC also adopted a more accommodating stance toward crypto, for example, asserting that meme coins were not subject to federal securities laws12 and dismissing an enforcement action against Coinbase.13

The SEC prevents firms from marketing private assets to small (“retail”) investors for good reasons.

Laws including the Investment Company Act and Investment Advisers Act, both enacted in 1940, give the SEC the authority to regulate securities marketed to retail investors.14 In addition to requiring consistent valuations and disclosures, these laws—and regulations and guidance based on them—limit the use of leverage and guard against potential conflicts of interest.15 The sale of private funds that do not meet these requirements is generally limited to sophisticated “accredited” investors or “qualified purchasers.”

These laws are intended to protect investors who are not equipped to assess the value or risk of private market investments. During the Biden administration, the SEC proposed rules that recognized that even accredited investors in private funds were not provided with sufficient information or protection from conflicts of interest.16 The rules were overturned by the Fifth Circuit Court of Appeals based on the assumption that investors in these funds were sophisticated and able to bear losses, not that they had adequate information and protection.17

Are risk, illiquidity, and complexity opportunities to earn higher returns?

EBSA acknowledges some of the obvious disadvantages of alternative investments, but frames these as opportunities to earn a premium for accepting these risks:

Alternative asset investments are often less liquid than the publicly traded stock and bond funds that are held by funds that plan fiduciaries often make available to plan participants. Illiquid investments generally offer an illiquidity premium to investors who are willing to hold their investment, for some time, without selling it for cash. Many retirement savers, particularly younger workers, have long investment time horizons until retirement and, therefore, fit the profile of an investor who can benefit from a liquidity premium.

EBSA elsewhere alludes to “obstacles that cause a relatively higher risk premium when compared to traditional investments, such as illiquidity or information asymmetry,” but suggests that an expanded market tailored to the needs of retirement savers could reduce liquidity and valuation risks:

As this market matures a new equilibrium should be reached where there is a larger pool of viable and vetted investments, expanded by alternative assets, for asset managers to o􀆯er to plan sponsors. The tradeoff for this increased market penetration is a reduction in illiquidity premium. As the risks associated with investment in alternative assets falls, so too does the risk premium investors in the assets will enjoy.

The idea that retirement savers could knowledgeably accept such tradeoffs ignores the fundamental problem that information asymmetry, complexity, and lack of regulatory oversight make reliable ex ante valuation of private market assets impossible.18 Expanding the market, whether or not it improves liquidity, does not address this fundamental problem.

Private market investments should be niche products for sophisticated investors.

The accurate valuation of public assets is made possible by the mandatory disclosure of relevant information and market signals from daily trading. A key feature of public markets is two-sided competition, wherein knowledgeable buyers and sellers eliminate biased prices so that even unskilled and uninformed investors can get a fair shake.19 These sources of information are generally unavailable to private market investors, who in most cases must also contend with complex structures, strategies, and incentives.

Private markets are characterized by asymmetric information, so outside investors cannot assume that investment opportunities are fairly priced. Institutional investors instead rely on private fund managers’ past performance, reputational risk, and performance incentives in deciding whether to enter into limited partnerships with fund managers, known as general partners. Institutional investors with clout can also demand access to information that may not be provided to all limited partners and would not be made available to retirement savers. However, general partners’ incentives are blunted and distorted by their ability to earn millions in fees, and often in related party transactions, even when funds underperform or sustain losses, a problem exacerbated by the favorable tax treatment of fund managers’ share of investment returns, known as carried interest. Past performance, meanwhile, has been found to be a weak predictor of future performance.

In a comment submitted about the proposed rule, former investment banker Jeffrey Hooke and business school professor Michael Imerman estimated that private market investments should earn a premium of 200-500 basis points over their public counterparts to compensate for illiquidity, leverage and opaque financial reporting. Far from earning such a premium, Hooke and Imerman estimate that over 95% of state pension plans investing in private assets fail to beat a 60-40 stock-bond benchmark over long periods.20 Even if some institutional investors with superior clout and expertise can expect higher risk-adjusted returns by investing in private market assets, the wide dispersion in fund performance suggests that other institutional investors are not assured of benefiting from these investments and that retirement savers would fare even worse.21

The expected real return on purely speculative assets is zero.

With private market investments, the challenge lies in gauging the expected risk and return of underlying assets. With most crypto and other speculative assets, there is no expectation of profit unless the buyer has better information than the seller. At best, these assets are “digital gold,” used as a store of value, a means of exchange, or a hedge against inflation, but with added risks associated with custody, safekeeping, and regulatory uncertainty.22

As the SEC acknowledged last year, some crypto assets can be compared to physical collectibles like rare tulip bulbs, baseball cards, and Beanie Babies because they are nonproductive investments.23 Under the Economic Recovery Tax Act of 1981, most physical collectibles are banned from tax-favored retirement plans because they “do not contribute to productive capital formation.”24 Though digital collectibles, unlike physical collectibles, are not currently banned from investment options offered to participants in tax-favored retirement plans, it is not clear why they should be exempted.25

Similar to much crypto, commodity futures are largely speculative and regulated by the Commodities Future Trading Commission (CFTC), though investors may be compensated for hedging the risk of producers or consumers. The New York Times recently described how the CFTC’s enforcement capacity has been hollowed out and the agency has become captive of crypto and prediction markets.26

A market for speculative assets exists for the same reason there are casinos, racecourses, and prediction markets: A subset of the population, rather than being risk averse, likes to gamble. However, gambling does not belong in tax-subsidized accounts intended to promote retirement income security.

Assessing the performance of private funds poses serious challenges.

The debate around whether investing in private market assets is worth the high fees, risk, and illiquidity is complicated by a lack of consistent disclosure requirements. As documented by Oxford University professor Ludovic Phalippou and others, private equity general partners, when marketing themselves to pension funds and other potential investors, cite irrelevant or misleading statistics, sometimes manipulating the timing of valuations or excluding funds that have been committed but not yet invested to inflate reported returns.27

Given the subjectivity of internal valuations and evidence that they are misleading and manipulated, limited partners’ return on investment can only be known once assets have been sold and the proceeds distributed. This happens too infrequently to be useful in making investment decisions, a problem exacerbated by the fact that private fund managers can prevent limited partners from fully exiting.28

Even after the return on investment is known to limited partners, it is difficult to know whether the return was sufficient to compensate for risk and illiquidity, since the degree of leverage and other risk factors is generally unknown to outside investors.

The available evidence does not show that alternative assets improve risk-adjusted returns. Because performance metrics reported by private equity and other alternative assets are unreliable, researchers have looked at whether institutional investor portfolios that include these investments have outperformed benchmarks composed of broad stock and bond indices. Many found that they did not, especially in the years since the 2008 financial crisis.29

For example, a 2022 report from the Center for Retirement Research at Boston College found that public pension funds that invested more in alternative investments did not have higher returns, though the investments may have served to dampen reported volatility.30 Similarly, researchers at the Canada Pension Plan Investment Board found that while private equity appeared to outperform stocks before the financial crisis, it did not do so on a risk-adjusted basis.31

A more positive study published by the Georgetown Center for Retirement Initiatives found that 401(k) participants would have seen slightly higher returns over a 20-year period if target date funds had included private equity and other alternative investments.32

However, even this industry-funded study showed that large-cap U.S. stocks outperformed private equity in the decade after 2011. The study relied on a proprietary database of pension fund returns that is subject to major revisions and may not include a representative sample of pension funds.

Perhaps the most telling indicator of private funds’ mediocre performance is the industry’s resistance to providing comparable metrics even to their own investors. In 2024, after the SEC attempted to standardize information about fees and performance provided to limited partners in private funds,33 the industry challenged the rule before the Fifth Circuit Court of Appeals, which sided with the industry on the basis that access to the funds was generally limited to “some of the most sophisticated and wealthiest investors.”34 Of course, this will no longer be true if private assets are marketed to retirement savers.

The proposed “safe harbor” does not protect retirement savers—or fiduciaries.

At the heart of the proposed rule is what EBSA describes as a process-based “safe harbor” that would shield fiduciaries who adhere to the process from liability even if the investment options they select for the plan are poor choices. EBSA lists six factors that fiduciaries should consider when selecting investment options: performance, fees, liquidity, valuation, benchmarking, and complexity.

In EBSA’s view, fiduciaries who follow the six-step process should be granted a “presumption of prudence” and given “the discretion and flexibility to determine when designated investment alternatives, including those that contain alternative investments, offer the opportunity for participants to maximize risk-adjusted returns on their retirement assets net of fees.”

This check-the-box process does not give fiduciaries the tools they need to assess opaque, complex, illiquid, and largely unregulated investments. The proposal also does not address disclosures to plan participants, who would be even less prepared to make informed decisions.

The types of alternative investments listed in the proposal, by their nature, cannot be reliably evaluated according to the criteria in the process-based rule, even assuming fiduciaries have the skill and experience to understand complex structures and incentives.

Without additional disclosure requirements and regulatory oversight, for example, it is impossible to reliably assess risk and liquidity in private assets in order to choose a comparable benchmark.

ERISA lawyers warn that the regulatory “safe harbor” may give fiduciaries a false sense of security without shielding them from lawsuits.35 The proposed rule assumes that courts will defer to the agency in granting a “presumption of prudence” to fiduciaries, even though no such presumption exists in the statute and the U.S. Supreme Court recently ruled in Loper Bright that courts should exercise independent judgement in interpreting laws rather than deferring to agency interpretations.

EBSA assumes that diversifying across asset classes reduces risk.

EBSA emphasizes that ERISA does not restrict plan fiduciaries from considering any type of asset class, suggesting that all types should be made available to retirement savers. This is akin to arguing that since USDA dietary guidelines do not explicitly ban junk food, it should be part of every diet.

EBSA cites modern portfolio theory to argue that “the optimal constrained portfolio will have lower risk-adjusted returns than that of an unconstrained portfolio.” Modern portfolio theory is a highly abstract model that relies on unrealistic assumptions, including perfect information and perfectly liquid markets, that clearly do not describe private markets.

Though markets for crypto and other speculative assets can be highly liquid and do not depend on access to information, modern portfolio theory also assumes that investors are risk averse, and risk-averse investors do not engage in pure speculation.

Modern portfolio theory can be a useful approximation of reality, for example, in support of passive investment in publicly traded securities. But it cannot preclude the existence of overpriced assets designed to lure naïve investors into private markets where information is asymmetric and the “smart money” has no way to capitalize on better information through short selling.

Diversification across asset classes does not necessarily reduce risk, especially if the asset that is added is itself not diversified.

Diversification across asset classes can be a valid reason to expand the range of available investment options to retirement savers. However, whether an asset class will improve risk-adjusted returns depends on net returns, volatility, and correlation with stocks and other portfolio assets.

Alternative investments are often touted for their supposed low volatility and low correlation with stocks. But as Morningstar and others have pointed out, this reflects infrequent valuations and should not be mistaken for low risk: “With low disclosure and transparency, frequent use of leverage, and valuations that are both lower in scale and frequency than public markets, [private investments] should be considered one of the riskiest asset classes in an investor’s portfolio, despite often being sold as having lower risk profiles.”36

Private assets tend to be correlated with their public counterparts: private equity with stocks, private credit with bonds, etc. Speculative assets such as crypto may be less correlated with traditional investments, but the volatility in returns is essentially noise— adding risk without a risk premium since investors in these assets are not risk averse. EBSA’s narrow focus on asset class diversification ignores the fact that adding alternative assets can concentrate rather than spread risk if the assets themselves are not diversified.

A major concern is that indexing is generally not possible with private assets. A target date fund composed of broad market indices is more diversified than one that includes a 15% private equity fund with holdings in 10 companies selected and overseen by the same general partners.

There are important differences between pension funds and individual retirement savers.

The proposed rule implements a section of President Trump’s August 7, 2025 Executive Order, “Democratizing Access to Alternative Assets for 401(k) Investors,” which argues that that since most defined benefit (DB) pension funds invest in alternatives, participants in 401(k) and other defined contribution (DC) plans are being disadvantaged.37

This ignores key differences between DB pensions and DC plans, notably the fact that fiduciaries who select DB pension investments are employed by the party that bears the risk (the plan sponsor). In contrast, DC plan sponsors and their fiduciary advisors choose the investment options but the risk of losses falls on retirement savers.

Illiquid investments can trip up retirement savers who need to tap their savings earlier than planned due to unanticipated health shocks, job loss, or caregiving responsibilities. Firms marketing target date and asset allocation funds with limited private asset “sleeves” assure retirement savers that between the more liquid assets in the fund and incoming contributions, cashing out early will not be a problem. However, this assumes a stable market—no panic selling—and that investors who cash out will not be saddled with high fees with little to show for it.

Less often noted than the illiquidity issue is the fact that timing (or “sequence-of-returns”) risk should make retirement savers more risk averse than pension funds and other institutional investors with indefinite investment horizons even if they do not cash out early.38 Whereas pension funds and university endowments continuously buy and sell assets on behalf of overlapping generations of beneficiaries, retirement savers are more sensitive to poor investment performance over limited investment horizons, especially once workers have built up savings and are approaching retirement.

Retirement savers will be defaulted to high-cost and risky investments.

EBSA suggests that both direct and investments in alternative assets should be permitted, raising the possibility that retirement savers—including those close to retirement—could put all their retirement savings in crypto and other risky assets. However, EBSA suggests that “a more likely scenario…is that these alternatives would be included as one part of a menu option,” citing as examples target date funds and asset allocation funds with annuity or private equity components similar to those the industry has begun marketing to retirement savers. Target date and balanced asset allocation funds can be “qualified default investment alternatives” (QDIAs) into which participants can be defaulted unless they opt out.

The idea that alternative investments could be embedded in target date and similar funds is not reassuring. Retirement savers who are defaulted into QDIAs are generally unsophisticated investors who will need to rely on their investments to cover living expenses in retirement and have been led to believe that these defaults are relatively safe. DOL’s website describes default investments as investments “that generally minimize the risk of large losses and provide long term growth.”39

If the proposed rule takes effect, many workers could unknowingly invest 15% or more of their retirement savings in assets that DOL has previously characterized as high-cost, complex, illiquid, and difficult to evaluate, reversing what has been a welcome shift to low-cost passive investments.

401(k) investment options have improved in recent years with the widespread adoption of target date and balanced funds composed of low-cost stock and bond indices and similar broadly diversified passive investments. This has enabled retirement savers to lower costs, automatically rebalance portfolio allocations, adjust portfolio risk as workers approach retirement, and maximize diversification across publicly listed securities.

The rule would harm not only retirement savers, but also the broader economy.

The aggregate value of largely unregulated private funds, including both private equity and private credit, now approaches that of regulated public funds.40 While it is highly concerning that unregulated private markets are growing at the expense of public ones, the solution is extending disclosure requirements and other investor protections to private markets, not increasing the size of unregulated markets that expose investors and other economic actors to exploitation and excessive risk.

Private equity has often been a destructive force in the economy. It has a reputation for loading companies up with debt, stripping them of assets, and often driving them into bankruptcy, leaving workers, suppliers, and other stakeholders high and dry.41 Businesses destroyed by private equity often operate in sectors like hospitals and newspapers where the damage to communities extends far beyond workers and suppliers.

Private equity’s fee structure incentivizes risk because general partners reap a share of gains when gambles pay off but are largely insulated from losses, which are borne by lenders and other investors. This is exacerbated by the preferential tax treatment of general partners’ share of earnings. Experts have also expressed alarm over the rapid expansion of unregulated private credit, which poses a threat to financial stability.

The proposed rule comes at an especially bad time. Agency understaffing, weakened enforcement, federal legislation, and a Supreme Court decision in Anderson v. Intel could exacerbate the potential effects of the rule.

Experts warn that deregulation could fuel a speculative bubble like the one in the roaring 1920s.42 When the bubble pops, everyone will pay, whether they were playing or not. As University of Chicago Law School Professor William Birdthistle, the former director of the SEC’s Division of Investment Management, warns:

The administration is…encouraging individual retirees to vouchsafe their life savings to exotic financial offerings like private equity. Private equity is, as the name suggests, notoriously opaque, which means retirees would know little about what they’re investing in. The White House and the private fund lobby argue that this policy will “democratize” access to alternative assets and promote “better returns.” But such a plan, which comes with neither the information nor the protections needed to defend investors from serious economic risks, is as compelling as a plan to “democratize” brain surgery. 43

The proposed rule is supported by a financial industry seeking new investors and plan sponsors hoping to reduce litigation risk, not retirement savers.

Whether or not alternative investments have performed well in the past, market saturation, higher interest rates, and other factors will likely reduce future returns. A shrinking client base has made it hard for private equity funds to exit their investments and return funds to clients. Investors in private credit funds have also become skittish due to concerns about lending standards and valuations, prompting some firms to restrict redemptions.44

A survey conducted on behalf of AARP found that “Americans have little interest in adding private market investments and cryptocurrency to workplace retirement accounts.”45 As institutional and wealthy investors try to o􀆯load underperforming funds, retirement savers will be given access to the dregs even as overall quality declines. Retirement savers will be “buying a pig in a poke”—assuming they are even aware they are buying a pig.

We need to better regulate alternative investments, not to loosen regulations protecting retirement savers.

Financial regulations, including disclosure requirements and fiduciary rules, serve multiple purposes. They protect investors, prevent systemic risks such as bank runs, and disclose information needed for financial markets to direct capital to productive uses, rather than activities that do not promote economic growth but simply transfer wealth to insiders from those with less information like most retirement savers and small investors.

Without reliable and comparable information, it is difficult for even sophisticated investors to know whether alternative investments are worth their high cost. We need better regulations to help all investors make informed decisions and guard against conflicts of interest; to fix incentives that encourage value-destroying business practices by private equity and other underregulated financial industries; and to curtail abuse of tax-favored plans by wealthy investors, who have an incentive to load 401(k) accounts up with assets that are difficult to value in order to skirt contribution limits and take maximum advantage of tax subsidies tied to investment returns.

Rather than weakening protections for retirement savers, DOL should work with other agencies to regulate private markets to enable all investors to make informed decisions and protect the economy.

For these reasons, I urge EBSA to withdraw the proposal. Working families need retirement income security, not risky and costly investments ill-suited for small investors.

Thank you for considering my comment.

Respectfully submitted,

Monique Morrisey, Ph.D.
Senior Economist
Economic Policy Institute

1. AARP, “ERISA Litigation Reform: Myth vs. Fact,” accessed June 1, 2026. https://www.aarp.org/content/dam/aarp/politics/advocacy/2026/03/erisa-litigation-reform-myth-v-fact.pdf

2. DOL, “Fiduciary Responsibilities,” web page accessed May 25, 2026. https://www.dol.gov/general/topic/retirement/fiduciaryresp

3. Paul Samuelson, “Risk and Uncertainty: A Fallacy of Large Numbers,” Scientia, Vol. 98, pp. 108-113. https://www.casact.org/sites/default/files/database/forum_94sforum_94sf049.pdf. John Rekenthaler, “How Time Horizon Affects the Odds of Equity Investing,” Morningstar, October 19, 2023. https://www.morningstar.com/columns/rekenthaler-report/how-time-horizon-affects-odds-equity-investing

4. Louis J. Campagna, Information Letter 06-03-2020, EBSA, June 3, 2020. https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/information-letters/06-03-

5. SEC Office of Compliance Inspections and Examinations, Risk Alert, June 23, 2020. https://www.sec.gov/files/Private%20Fund%20Risk%20Alert_0.pdf

6. DOL, “Supplement Statement on Private Equity in Defined Contribution Plan Designated Investment Alternatives,” December 21, 2021. https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resourcecenter/information-letters/06-03-2020-supplemental-statement

7. DOL, “US Department of Labor Rescinds 2021 Supplemental Statement on Alternative Assets in 401(k) Plans,” August 12, 2025. https://www.dol.gov/newsroom/releases/ebsa/ebsa20250812

8. SEC, “Staff Statement on Meme Coins,” February 27, 2025. https://www.sec.gov/newsroom/speechesstatements/staff-statement-meme-coins

9. Gary Gensler, “Statement on the Approval of Spot Bitcoin Exchange-Traded Products,” January 10, 2024. https://www.sec.gov/newsroom/speeches-statements/gensler-statement-spot-bitcoin-011023

10. Board of Governors of the Federal Reserve System, “Federal Reserve Board announces the withdrawal of guidance for banks related to their crypto-asset and dollar token activities and related changes to its expectations for these activities,” April 24, 2025. https://www.federalreserve.gov/newsevents/pressreleases/bcreg20250424a.htm

11. EBSA, “401(k) Plan Investments in “Cryptocurrencies,” Compliance Assistance Release No. 2022-01, March 10, 2022. https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-andcompliance/compliance-assistance-releases/2022-01

12. SEC Division of Corporation Finance, “Staff Statement on Meme Coins,” February 27, 2025. https://www.sec.gov/newsroom/speeches-statements/staff-statement-meme-coins

13. SEC, “SEC Announces Dismissal of Civil Enforcement Action Against Coinbase,” February 27, 2025. https://www.sec.gov/newsroom/press-releases/2025-47

14. Caroline Crenshaw, Remarks at the Investment Company Institute’s 2025 Investment Management Conference, March 26, 2025. https://corpgov.law.harvard.edu/2025/03/26/remarks-by-commissioner-crenshaw-at-the-investmentcompany-institutes-2025-investment-management-conference/

15. Caroline Crenshaw, Remarks at the Investment Company Institute’s 2025 Investment Management Conference, March 26, 2025. https://corpgov.law.harvard.edu/2025/03/26/remarks-by-commissioner-crenshaw-at-the-investmentcompany-institutes-2025-investment-management-conference/

16. SEC, “SEC Enhances the Regulation of Private Fund Advisers,” August 23, 2023. https://www.sec.gov/newsroom/press-releases/2023-155

17. United States Court of Appeals for the Fifth Circuit, “National Association of Private Fund Managers et al. v. Securities and Exchange Commission,” June 5, 2024. https://www.govinfo.gov/content/pkg/USCOURTS-ca5-23-60471/pdf/USCOURTS-ca5-23-60471-0.pdf

18. American Federation of Teachers, Americans for Financial Reform Education Fund, and American Association of University Professors, “From Public Pensions to Private Fortunes: How Working People’s Retirements Line Billionaire Pockets,” July 2025. https://ourfinancialsecurity.org/resources/publicpensionsprivatefortunes; Stephen Deane, “Private Markets: Governance Issues Rise to the Fore,” CFA Institute Research and Policy Center, June 2024. https://rpc.cfainstitute.org/sites/default/files/-/media/documents/survey/private-markets-governanceissues-rise-to-the-fore.pdf; Alexander Ljungqvist, “The Economics of Private Equity: A Critical Review,” CFA Institute Research Foundation Literature Review, 2024. https://rpc.cfainstitute.org/sites/default/files/-/media/documents/article/rf-brief/economics-of-private-equity.pdf.

19. Holger Spamann, Indirect Investor Protection: The Investment Ecosystem and Its Legal Underpinnings, Journal of Legal Analysis, Volume 14, Issue 1, 2022, Pages 17–79, https://doi.org/10.1093/jla/laac003

20. Jeffrey Hooke and Michael Imerman, comment on proposed regulation RIN 1210 AC 20, April 13, 2026. https://www.regulations.gov/comment/EBSA-2026-0166-6564

21. Jeffrey Ptak, “Look Before You Leap When Investing in Private Funds,” Morningstar, July 29, 2025. https://www.morningstar.com/funds/look-before-you-leap-when-investing-private-funds; Linge Sun and Nicholas Reade, “Performance Dispersion in Alternative Asset Classes, CAIS, November 18, 2022. https://www.caisgroup.com/articles/performance-dispersion-in-alternative-asset-classes

22. Stephen Deane and Olivier Fines, “Cryptoassets: Beyond the Hype,” CFA Institute, January 2023. https://rpc.cfainstitute.org/sites/default/files/-/media/documents/article/industry-research/crypto-beyondthe-hype.pdf

23. SEC, “Staff Statement on Meme Coins,” February 27, 2025. https://www.sec.gov/newsroom/speechesstatements/staff-statement-meme-coins

24. Internal Revenue Service, “Retirement topics – Plan assets,” web page accessed May 25, 2026. https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-plan-assets

25. In 2023, the Treasury Department and Internal Revenue Service (IRS) announced that they planned to issue guidance relating to the treatment of nonfungible tokens as collectibles. IRS, “Treatment of certain nonfungible tokens as collectibles,” Notice 2023-27, March 21, 2023. https://www.irs.gov/pub/irs-drop/n-23-27.pdf; David Block and Davide Levine, “IRS Announces Intention to Issue Guidance on NFTs,” Groom Law Group, March 29, 2023. https://www.groom.com/resources/irs-announces-intention-to-issue-guidance-onnfts/

26. Sharon LaFraniere and David Yaffe-Bellany, “How Prediction Markets and Crypto Firms Steamrolled a Watchdog Agency,” The New York Times, May 24, 2026. https://www.nytimes.com/2026/05/24/us/howprediction-markets-and-crypto-firms-steamrolled-a-watchdog-agency.html

27. Ludovic Phalippou, “An Inconvenient Fact: Private Equity Returns & The Billionaire Factory,” University of Oxford, Said Business School, Working Paper, June 10, 202. https://dx.doi.org/10.2139/ssrn.3623820; American Federation of Teachers et al., op. cit. July 2025.

28. Robert S. Harris, Tim Jenkinson, Steven N. Kaplan, and Ruediger Stucke, “Has Persistence Persisted in Private Equity? Evidence from Buyout and Venture Capital Funds,” Journal of Corporate Finance, Volume 81, August 2023. https://doi.org/10.1016/j.jcorpfin.2023.102361.

29. American Federation of Teachers et al., op. cit. 2025; Dan Chung and Brad Neuman, “Debunking Private Equity Prestige,” Alger Insights, April 2024. https://www.alger.com/Pages/Content.aspx?pageLabel=Insights-Commentary-Debunking-Private-Equity-Prestige

30. Jean-Pierre Aubry, “Public Pension Investment Update: Have Alternatives Helped or Hurt?” Center for Retirement Research at Boston College Issue in Brief 22-20, November 22, 2022. https://crr.bc.edu/publicpension-investment-update-have-alternatives-helped-or-hurt/

31. Jean-François L’Her, Rossitsa Stoyanova, Kathryn Shaw, William Scott, and Charissa Lai, “A Bottom-Up Approach to the Risk-Adjusted Performance of the Buyout Fund Market,” Financial Analysts Journal, 72(4), 36–48, December 27, 2018. https://doi.org/10.2469/faj.v72.n4.1https://www.tandfonline.com/doi/abs/10.2469/faj.v72.n4.1

32. Angela M. Antonelli, “Has the Lack of Asset Diversification in DC Retirement Plans Been a Costly Missed Opportunity?” Georgetown University Center for Retirement Initiatives in Conjunction with CEM Benchmarking, June 2023. https://cri.georgetown.edu/wp-content/uploads/2023/06/GeorgetownCRI-CEm- Benchmarking_Lack-of-Asset-Diversification-CRI-paper.pdf

33. SEC, op. cit., August 23, 2023.

34. U.S. Court of Appeals for the Fifth Circuit, op. cit., June 5, 2024.

35. James Van Bramer, “Unpacking the DOL ‘Safe Harbor’ for Alternative Investments,” Plan Advisor, April 14, 2026. https://www.planadviser.com/unpacking-the-dol-safe-harbor-for-alternative-investments/

36. Amy C. Arnott, Christine Benz, David Reyna, and Jack Shannon, “2026 Diversification Landscape,” Morningstar, April 14, 2026. https://www.morningstar.com/content/csassets/v3/assets/blt9415ea4cc4157833/blta0fddf23ec4df239/69ddb33e160be843c15e5ad3/Diversification_Landscape_2026.pdf

37. United States, Executive Office of the President. Executive Order 14330: Democratizing Access to Alternative Assets for 401(k) Investors, August 7, 2025. https://www.whitehouse.gov/presidentialactions/2025/08/democratizing-access-to-alternative-assets-for-401k-investors/

38. Amy C. Arnott, “Sequence of Returns: What It Means and How to Deal,” Morningstar, August 9, 2021. https://www.morningstar.com/retirement/sequence-returns-what-it-means-how-deal

39. EBSA, “FAQs about Retirement Plans and ERISA,” web page accessed May 25, 2026. https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/retirement-plans-anderisa

40. SEC Office of the Advocate for Small Business Capital Formation, Annual Report 2024. https://www.sec.gov/files/2024-oasb-annual-report-print.pdf

41. Eileen Appelbaum and Rosemary Batt, Private Equity at Work, The Russell Sage Foundation, May 2014. https://www.russellsage.org/publications/book/private-equity-work

42. Andrew Ross Sorkin, “The Rules of Investing Are Being Loosened. Could It Lead to the Next 1929?” The New York Times, October 13, 2025. https://www.nytimes.com/2025/10/13/magazine/investing-private-equitycrypto-crash-1929.html

43. William A. Birdthistle, “Trump Is Pushing Us Toward a Crash. It Could Be 1929 All Over Again,” The New York Times, November 7, 2025. https://www.nytimes.com/2025/11/07/opinion/donald-trump-great-gatsbyroating-20s-sec.html

44. Maureen Farrell, “New Limits on Investors and a Debt Downgrade Add to Private Credit Woes,” The New York Times, March 24, 2026. https://www.nytimes.com/2026/03/24/business/moodys-private-creditdowngrade.html

45. Bryan Miller, “Americans Have Little Interest in Adding Private Market Investments and Cryptocurrency to Workplace Retirement Accounts,” AARP, November 20, 2025. https://www.aarp.org/pri/topics/work-financesretirement/financial-security-retirement/private-market-and-cryptocurrency-investments/

Brian D. Pasternak,
Administrator, Office of Foreign Labor Certification
Employment and Training Administration
Department of Labor
Room N-5311
200 Constitution Avenue NW
Washington, DC 20210

RE: Department of Labor, Employment and Training Administration, Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States, Notice of Proposed Rulemaking, DOL Docket No. ETA-2026-0001, RIN 1205-AC30 (March 27, 2026)

Dear Brian Pasternak:

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 on the Department of Labor’s (DOL) Notice of Proposed Rulemaking (NPRM) regarding the updated four-tiered wage structure for H-1B, H-1B1, and E-3 nonimmigrant workers and DOL permanent labor certifications for employment-based permanent immigrant visas (i.e. green cards) in the second and third employment-based preference categories (EB-2 and EB-3). 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 and green cards. EPI has published extensively on H-1B wage levels and employer usage and abuse of H-1B and other visa programs.1

EPI generally supports the main substance of the NPRM and believes it is an improvement as compared to the status quo for the current four-tiered wage structure for H-1B, and will also improve H-1B1 and E-3 nonimmigrant visas, and permanent labor certifications in EB-2 and EB-3, because the NPRM will make incremental progress towards ensuring that the wages of U.S. workers are safeguarded and that the Labor Condition Application (LCA) and PERM programs are not hijacked by employers as a loophole to underpay migrant workers according to U.S. wage standards. The proposal will also help disincentivize firms from using H-1B visas as a primary tool to outsource professional jobs and send them overseas.

However, as we will detail in this comment, we believe DOL should go beyond what the NPRM proposes by setting the wage floor—i.e. the Level I wage—at the 50^th percentile so that no H-1B, H-1B1, E-3, EB-2, or EB-3 jobs are ever certified at a wage that is below the local median wage for the occupation. If DOL implements such a rule in the final version of the regulation, the rule would address a major critique EPI has long held about the program, and which Members of Congress from both major parties have attempted to address through repeatedly proposed legislation that was first introduced nearly two decades ago.

It must also be noted at the outset of these comments that recent actions taken by DOL with respect to wages for migrant workers in temporary work visa programs have been inconsistent and confusing. While DOL is considering action proposed in this NPRM that will raise wage rates closer to true market rates for migrant workers in the H-1B, H-1B1, and E-3 visa programs, as well as those with labor certifications for EB-2 and EB-3 green cards, it is important to note that in October of 2025, DOL issued a new wage rule for the H-2A program that will cut wages dramatically for the migrant farmworkers in that program and unfairly charge them for lodging2—which, as EPI has estimated—will lead to a pay cut of roughly $2 billion for H-2A farmworkers and $3 billion for U.S. farmworkers per year.3 DOL should issue regulations that lead to improved labor standards and fair 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 work, and no work visa programs should operate as loopholes that allow employers to legally underpay migrant workers.

The NPRM is an improvement on the status quo but DOL should amend the proposal to better protect workers

In general, the NPRM improves upon the current wage structure but should be further enhanced to better protect workers and align the program with congressional intent and the goals of the H-1B statute. The principal change made by the NPRM is to update the four prevailing wage levels required in the H-1B, H-1B1, and E-3 visa programs—temporary work visa programs for college-educated migrant workers—setting levels at higher percentiles in the Occupational Employment and Wage Statistics (OEWS) survey distribution of wages, in order to more adequately reflect market wage rates in the U.S. labor market. The NPRM also applies the new wage rates/percentiles to the permanent labor certification requirements for employment-based (EB) green cards in the EB-2 and EB-3 preference categories (sometimes referred to as the PERM process).4

The current and newly proposed wage level percentiles are as follows:

Table 1

As we have detailed in published research,5 the two lowest wage levels in the current wage computation method are below the local median wage according to the occupation and local area based on DOL wage survey data in the OEWS, allowing employers to undercut U.S. wage standards. The NPRM sets the lowest wage level at the 34^th percentile, previously the Level II wage, thereby continuing to permit employers to pay H-1B workers at below-market wage rates—but not at the absurdly low levels allowed by the current Level I wage at the 17^th percentile.

DOL’s faulty prevailing wage computation has cost foreign-born workers at least $6.56 billion annually (see NPRM Exhibit 1). Even that is likely to be a serious underestimate for two reasons. First, it does not account for the losses suffered by U.S. workers and students who have had their wages, job opportunities, and career development suppressed and undermined as a result of the current wage methodology. Second, it does not estimate the costs incurred due to foreign-born workers’ weakened bargaining power vis-à-vis their employment through nonimmigrant visa programs. Employers exert much more control over visa workers than U.S. workers and permanent residents. Foreign-born workers on nonimmigrant visas have less opportunity to, and are far less likely to, switch jobs. Switching jobs, or the threat of switching jobs, is fundamental to any worker’s ability to demand higher wages and better working conditions. Professor George Borjas estimates that, in fiscal year (FY) 2024, visa holders had an annual separation rate of 9.4%, less than half of comparable U.S. workers.6 Workers also face dire circumstances should they be terminated. They must find a new job within 60 days or else leave the United States. All these conditions place foreign-born workers in the H-1B, H-1B1, and E-3 visa programs in a much weaker position than similarly situated U.S. counterparts when bargaining for wages and working conditions. Simply put, foreign-born visa workers have fewer employment rights than U.S. citizens and permanent residents, and employers rationally take advantage of their relatively weak position when setting employment terms. Further, the agency has never enforced the Labor Condition Application’s (LCA) Working Conditions attestation, where employers promise to “not adversely affect the working conditions of workers similarly employed,” so employers disregard it.

In addition, the ability of H-1B workers to become lawful permanent residents and remain in the United States is entirely up to the whims 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. That leaves H-1B workers in a difficult position where they might decide, rationally, to abandon any demands for higher wages and better working conditions in exchange for the possibility of being sponsored for lawful permanent residence.

Prevailing wages must be raised sufficiently to compensate for this government-created labor market distortion, to protect both foreign-born workers with nonimmigrant visas and U.S. workers who already reside in the United States. 

DOL’s proposal to increase the wage-level percentiles is the best approach. It is straightforward and understandable to implement. The effects are easily modeled. Employers can respond to it predictably and effectively. It will improve the quality and skill mix of the pool of workers who are issued visas, pay those workers fairer salaries, and have fewer adverse impacts on the domestic workforce and labor supply. Recent results reported by United States Citizenship and Immigration Services (USCIS), from the fiscal year (FY) 2027 H-1B lottery, the first to use the new wage-level weighting process, show that a large majority of H-1B registrations selected met at least the 34th percentile threshold, 82%, while also increasing the share of F-1 advanced degree graduates selected from 57% to 71.5%.7 The latter demonstrates that concerns about this proposal shutting off the foreign student pipeline are overblown and misguided.

However, as noted above, the increases don’t go far enough. We believe that the Level I wage should be set no lower than the median (50th percentile) to effectively adjust for the non-compensated effects of limited job-switching, an absent or ineffective labor market test, weaker bargaining position, and non-enforcement of the actual wage requirement. Recent college graduates, especially those earning degrees in computer science and computer engineering, are facing the highest unemployment rates amongst all majors according to analysis by the New York Federal Reserve Bank, and the worst job market in recent memory according to dozens of media accounts.89 Most analysts and executives predict that artificial intelligence (AI) will only make that labor market segment even worse. Major firms have laid off thousands of workers, citing AI the reason they need fewer workers. Many of those same firms employ thousands of H-1B workers. AI is predicted to reduce labor demand especially of recent graduates, the very U.S. workers competing for Level I jobs. The rules should ensure that workers assigned at Level I wages have truly special skills and will not undercut opportunities for recent university graduates.

Analysis of the NPRM: “Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States”

1. Raising wages for H-1B workers and permanent labor certifications will benefit migrant workers and protect wage standards for U.S. workers

For years, H-1B employers have been allowed to pay their H-1B workers at wage rates that do not reflect local market rates, by having an option to pay them at the two lowest permitted wage levels. Our 2020 report discusses the available data, the mechanics of the current rule, and why it is important to modify the H-1B wage levels to adequately reflect market wages and ensure that H-1B workers are paid fairly, and to preserve U.S. wage standards.10 In the report, we recommend that DOL prohibit any H-1B job from being certified at a wage that is below the local median for the occupation and region. In that respect, by proposing to set the lowest wage level (Level I) at the 34^th percentile, DOL’s NPRM fails to do enough to protect wage standards in H-1B jobs. In the report we also recommend that DOL prohibit downward pressure on wages at the national level by requiring that every H-1B job be certified at a wage that is no lower than the national median wage for the occupation.

Many commentators on this NPRM, especially from the business community, including universities, are likely to claim that raising wages for migrant workers and safeguarding U.S. wage standards will harm the U.S. economy. When the misleading rhetoric is stripped away, the employers who oppose higher wage percentiles for H-1B, H-1B1, and E-3 visas, and EB-2 and EB-3 green cards, are simply claiming, in essence, that employers will only hire workers in the LCA and PERM programs if they are underpaid relative to similarly situated U.S. workers, and portray higher wages as an obstacle to migration or to the hiring of adequate talent that will prevent them from being successful and innovating.

Accepting this argument leads to a race to the bottom in terms of labor standards and excuses the co-optation of the immigration system in order to pad corporate profits. And such a line of argumentation is not supported by the available evidence. In fact, many advocates on all sides of the current H-1B debate now agree that the current H-1B wage rules are undercutting U.S. wage standards and should be updated. Even previous staunch defenders of the status quo, such as those representing or funded by the tech industry, as well as representatives of major employer associations, now admit that U.S. wages and U.S. workers are being undercut via the current prevailing wage rule.11

Adequate labor standards are never a barrier to migration or economic success—instead, they are a prerequisite to fair treatment for the migrant workers who are recruited by employers into the U.S. labor market and similarly situated U.S. workers.

Under the current rule, the wages of H-1B workers are being kept artificially low. The higher wage levels in DOL’s NPRM are more reasonable and closer to reflecting market wages in particular occupations and specific geographic regions. In other words, DOL’s proposal will push wage levels toward market wages, meaning it will increase labor market efficiency. It will also improve the quality and skill mix of the pool of foreign-born workers who are hired, increasing the productivity and innovation spillovers that skilled immigration promises.

2. DOL should raise the wage percentiles so that Level I is set no lower than the 50^th percentile of total wages surveyed in an occupation and region and prohibit any LCA or PERM approval for a wage that is lower than the national average for the occupation

The purpose of the H-1B and related programs is to “help employers who cannot otherwise obtain needed business skills and abilities from the U.S. workforce.”12 Specialized skills should command high wages; such skills are typically a function of inherent capability, education level, and experience. It would be reasonable to expect that these workers should receive wages higher than the local median wage. One would therefore expect most H-1B positions to be assigned as Level IV (the only current wage level above the median), but as DOL and USCIS data show, H-1B employers as a whole assign only a very small minority of H-1B positions as Level IV, usually roughly 15% or less in recent fiscal years, while as DOL notes in the NPRM, 63% of H-1B positions were assigned at Levels I and II. For all LCA programs, DOL notes in the NPRM that in FY 2024, 16% of all LCA positions were certified at Level IV. At the USCIS petition level, Level IV wages are even less common: data disclosed by USCIS shows that in 2019 and 2020, only 4% of approved petitions for new employment under the regular cap were assigned at Level IV and only 2% of approved new H-1B petitions under the advanced degree exemption cap were assigned at Level IV.13 We also know from more recent data from DHS that the five-year average of H-1B registrations at Level IV was just 5% over the FY 2020 to 2024 period.14

The data presented in our reports over the past decade and a half and more recently, the data reported by USCIS on the distribution of H-1B petitions by wage level, all point to the obvious fact that nearly all H-1B employers, but especially the largest employers, use the H-1B program either to hire relatively lower-wage workers (relative to the wages paid to other workers in their occupation) who possess ordinary skills or to hire skilled workers and pay them less than the true market value of their work. Either possibility raises important policy questions about the use and allocation of H-1B visas.

By setting two of the H-1B prevailing wage levels so low relative to the median and not requiring that firms pay at least market wages to H-1B workers, DOL has incentivized firms to earn extraordinary profits by legally hiring much-lower-paid H-1B workers instead of workers earning at least the local median wage. The fact that firms earn those profits through poorly crafted wage rules and by underpaying H-1B workers—instead of by offering a better or more innovative product or service—means DOL has, in effect, made wage arbitrage a feature of the H-1B program. And as the wage-level data we have reported on and cited here clearly shows, nearly all H-1B employers are exploiting these H-1B wage rules in order to pay below-median wages.15 We believe the evidence is clear that these firms are not using the H-1B program sparingly to hire truly specialized workers, nor are they using it only when U.S. workers are unavailable. Given the business models and occupations, it is likely that the H-1B1 and E-3 programs are being abused similarly.

So how should DOL set a wage rule that guards against this and complies with the statutory requirement to prevent adverse effects on wages and working conditions?

The existing statutory language that sets out the H-1B prevailing wage requires four H-1B wage levels, but it does not prescribe specific percentiles, and no law requires DOL to set any of these prevailing wage levels below the local median wage. To ensure that H-1B workers possess specialized skills and are fairly paid, and to protect local wage standards and eliminate wage arbitrage as a feature of the H-1B program, DOL should issue a final rule that sets the lowest (Level I) wage for the LCA programs and EB-2 and EB-3 green cards at the 50th percentile for the occupation and local area, at least, and require that wage offers to workers in the LCA and EB-2 and EB-3 programs never be lower than the national median wage for the occupation, in order to prevent downward pressure on wages nationwide.

Requiring and enforcing above-median wages for H-1B and other LCA and PERM program workers would disincentivize the hiring of workers with nonimmigrant visas and green cards as a money-saving exercise, ensuring that companies will use the program as intended—i.e., to bring in workers who have special skills—instead of using them as a way to hire underpaid indentured workers for jobs that require at least a college degree.

3. DOL should set the updated wage percentiles at the 50^th, 62^nd, 75^th, and 90^th percentiles according to the total surveyed wages for the occupation and local area in the OEWS

As noted and discussed above, the lowest wage level, Level I, should be set no lower than at the 50^th percentile. Instead of the proposed four wage levels in the NPRM, DOL should set the lowest wage level, Level I, at the median wage (at the 50^th percentile), Level II at the 62^nd percentile, Level III at the 75^th percentile, and Level IV at the 90^th percentile—according to the overall distribution of OEWS wages for each occupation and region. (See table below.)

Table 2

These levels would ensure that no LCA or EB-2 or EB-3 positions are certified at a wage that is below the overall local median wage for an occupation, which in turn will prevent downward pressure on U.S. wage rates in such occupations. An additional benefit of using the 50^th, 62^nd, 75^th, and 90^th percentiles, as DOL points out, is “that they are close to dividing the upper half of the distribution equally.”16

4. DOL’s experience benchmarking proposal is inferior to the NPRM’s core proposal on wage levels and should not be implemented

The NPRM requests comments on ‘experience benchmarking’ as an alternative computational method to the core proposal of Level I at the 34^th percentile, Level II at the 52^nd, Level III at the 70^th, and Level IV at the 88^th percentile, based on the overall OEWS wages by occupation and region. We believe that this experience benchmarking alternative is significantly inferior to the core proposal and urge DOL to reject it for four main reasons. First, the methodological description is insufficient to evaluate, with just two pages of text. This is especially troublesome since it is an entirely novel method of setting prevailing wages that has never been rigorously tested or examined. It will impact literally millions of workers and hundreds of thousands of employers. To our knowledge, Mincer equations have never been used to this large an extent for setting wages in any government program. Second, the data necessary to calculate prevailing wages do not exist; they must be synthesized through estimation procedures after marrying two distinct surveys that were never designed for these purposes. Are the sample sizes sufficient? There’s no exploration of these potential flaws in the NPRM. Third, the method biases against women. The method does not directly measure experience; instead, it estimates experience by the age of the candidate. Women are more likely than men to have gaps in their labor force participation. The agency does not provide a method for adjusting the calculations based on gender. Fourth, this method would surely fuel age discrimination by allowing firms to legally pay younger H-1B workers less than U.S. workers doing the same job. Professor Norman Matloff, one of the leading scholars of the H-1B program, has repeatedly expressed concerns that firms prefer to hire H-1B workers because they are younger, and therefore lower-paid, than equivalent Americans.17 The government would be endorsing such behavior by adopting experience benchmarking.

More broadly, adopting benchmarking to set prevailing wages rests on the assumption that labor markets are highly segregated by age and educational attainment. Is it true that a 28-year-old does not compete with a 35-year-old? Is it true that someone with a master’s degree does not compete with someone with a bachelor’s degree? The DOL provides no evidence to test this hypothesis with a single occupation or example, let alone whether it would hold across the roughly 400 occupations eligible for visa programs covered by this NPRM.

The example provided in the NPRM, of an accountant working in Dayton, Ohio, illustrates the difficulty for anyone to assess the accuracy of the procedure.

If ACS data and Mincer wage equation estimated that U.S. accountants with 10 years of experience and a master’s degree typically earn 20 percent more than the median accountant nationwide, the Experienced Benchmarked ratio for that education-experience combination in accounting would be expressed as a wage premia factor of 1.2. Then, to compute the Level I prevailing wage for an employer seeking visa labor certification to employ an alien worker as an accountant in Dayton, Ohio, with 10 years of experience and a master’s degree, the Department would take the OEWS 50th percentile for accountants in the Dayton MSA (currently $78,710) and multiply it by 1.2, yielding an experience-benchmarked Level I prevailing wage of $94,452. The Level II prevailing wage would apply the same 1.2 ratio to the OEWS 62nd percentile; Level III to the 75th percentile; and Level IV to the 90th percentile.18

This hypothetical example presents several shortcomings.

First, we encounter problems with identifying the data. The NPRM reports the OEWS 50^th percentile wage in Dayton MSA of $78,710. We are unable to validate this wage using the OFLC Wage Search page.19 The OEWS 50^th percentile wage (current Level III) for the occupation is shown below, with the results listed for three different years of data available in the database:

Occupations: SOC 13-2011.00 – Accountants and Auditors
Location: Dayton OH BLS Areas Montgomery County
Series: All Industries

7/2023-6/2024 Level III Wage: $77,251.00
7/2024-6/2025 Level III Wage: $82,576.00
7/2025-6/2026 Level III Wage: $86,403.00

Further, based on the absence of data and sparse description of the methodology, there’s no way for us, or anyone else, to test or examine the method used to calculate the wage premia/discount using the Mincer equations. The “hypothetical” example claims a premia of 20%, but it is unclear whether this result comes from real calculation or if it’s a fabrication created to illustrate a point. If it is the latter, that raises serious questions about the agency’s ability to implement experience benchmarking across hundreds of occupations, thousands of locations, four skill levels, and a half-dozen educational levels.

More importantly, is the example, and its wage outcomes, representative of the universe of covered workers and the U.S. workers they compete with? The evidence shows that this hypothetical example is neither typical of H-1B workers nor their U.S. counterparts. The description of experience benchmarking does not investigate its implications, but such testing is fundamental to validating the method across occupations, locations, and skill levels. The hypothetical worker has 10 years of experience, which, if they had no gaps in labor force participation, would put them at 34 years old. A 34-year-old worker is older than most new H-1B workers approved for initial employment, ranking near the 68^th percentile by age.20 We also know that this worker is not typical of U.S. accountants. Most practicing accountants hold no more than a bachelor’s degree, 59%, and are older—with a median age of 45—than this candidate.21 The example raises many more questions than it answers.

The median age of all H-1B workers approved for initial employment is approximately 31, whereas the median age of an American worker in an H-1B eligible occupation is approximately 40, even in STEM occupations.22 H-1B workers are generally significantly younger than the typical U.S. worker with whom they compete. Experience benchmarking would favor H-1B workers by offering them a significant wage discount, based on the Mincer method, over the U.S. workers with whom they compete. The upshot is that experience benchmarking would surely fuel age discrimination in these labor markets.

It is likely that experience benchmarking would yield substantial wage discounts (premia ratios <1.0) for H-1B workers, compared with the NPRM’s core approach. But we simply do not know because DOL has not compared the wage outcomes between experience benchmarking and raising the wage level percentiles. DOL has not published experience benchmarking wage tables for every occupation, geography, skill level, experience, and education.

One think tank, the Institute for Progress (IFP), a supporter of the experience benchmarking alternative, attempted to simulate the method using FY 2024 approved petitions and found that experience benchmarking wages for most H-1B workers are substantially lower than the NPRM’s core proposal. Contrary to IFP, we believe experience benchmarking should be rejected, in part for that reason. See its report, specifically the scatterplot chart “Blind Benchmarking misses underpaid H-1B workers” on page 20, where the number of red dots (i.e., experience benchmarking yields a lower prevailing wage than NPRM core proposal) far outnumbers the green dots (i.e., experience benchmarking yields a higher prevailing wage than NPRM core proposal).23 Even these analysts admit they don’t know whether their calculations are consistent with DOL’s sparse description of experience benchmarking. If this think tank’s analysis is roughly correct or on the right track, then experience benchmarking will yield much lower prevailing wages than the core NPRM proposal. If this is true, then the experience benchmarking method undermines the goals of this rulemaking.

In its justification for considering experience benchmarking, the NPRM states that “the methodology employed under the current rule may allow positions to be classified at wage levels that are less comparable to the actual education and experience of the alien worker.” Experience benchmarking, on the other hand, would “address this limitation by comparing the sponsored alien worker’s wage to the wages earned by U.S. workers with comparable education and experience…”24

But elsewhere, the NPRM undermines the case for experience benchmarking by noting that educational attainment is often a poor determinant of wages:

an examination of the top end of the wage distribution within the H–1B program shows that, for H–1B nonimmigrants with graduate and bachelor’s degrees, the association between education and income level begins to break down to some extent. An analysis of the highest earners within the H–1B program reveals that H–1B workers—particularly those with bachelor’s and graduate degrees—can be among the most skilled and capable in their fields. Interestingly, at this top end of the wage distribution, the typical link between education level and income begins to weaken. Among the most highly compensated H–1B workers, the higher the income level, the more likely the alien worker only has a bachelor’s degree.25 (Emphasis added.)

While skill-level misclassification is a major problem, experience benchmarking is the wrong solution because it creates new, unnecessary loopholes. Instead, as we describe below, we recommend that you require employers document their Prevailing Wage Determination (PWD) aligned with the National Prevailing Wage Center (NPWC) guidance and provide it for inspection.

The NPRM’s core proposal—the 34^th, 52^nd, 70^th, and 88^th percentiles based on the overall OEWS wages by occupation and region—coupled with skill classification oversight and accountability, better achieves the program goals than the experience benchmarking proposal discussed in the NPRM.

5. DOL should calculate an additional amount of compensation based on available data on the cost of benefits for workers in private industry and add a reasonable amount to the required prevailing wage

While we believe utilizing the OEWS data set and wage percentiles within the distribution is reasonable and preferable to other data sources and methods, the OEWS falls very short in terms of providing a holistic and realistic picture of what U.S. workers earn in H-1B occupations, as well as those in other LCA programs and PERM programs, by virtue of not including fringe benefits. We urge that DOL also calculate an additional amount of compensation based on available data on the cost of benefits for workers in private industry. If employers do not have to provide fringe benefits to the college-educated migrant workers they recruit or reasonable compensation that accounts for those fringe benefits, that will result in employers underpaying or undercompensating workers with visas vis-à-vis their U.S. worker counterparts, thereby causing adverse effects on workers in occupations covered by H-1B and the other LCA programs. The fissuring of the U.S. workforce has been abetted in part by employers practicing benefits’ arbitrage—in other words, employers seeking a workforce they do not need to provide benefits for—the H-1B, H-1B1, E-3, EB-2, and EB-3 program should not facilitate it.

Davis Bacon and Service Contract Act wage determinations—which are both valid wage sources for determining H-1B wage rates under current H-1B rules—include an additional hourly monetary value that is owed to the worker in “fringe benefits.” Under both Acts, the employer must pay the fringe benefits either in the form of a permissible fringe benefit listed by the applicable Act, or any combination of benefits thereof, or with an equivalent cash payment.26 The lack of any fringe benefits in OEWS prevailing wage determinations27 constitutes a severe deficiency in the OEWS wage data that conflicts with and undermines the statutory requirement that the H-1B prevailing wage will not adversely affect the wages and working conditions of similarly employed U.S. workers. 

Reliance on the OEWS to determine prevailing wages—without an adjustment for fringe benefits—is not an adequate method to set prevailing wages for LCA and PERM programs. If the prevailing wages and benefits for a particular occupation in a particular Metropolitan Statistical Area (MSA) are, for example, $30 per hour plus $10 per hour in leave, pension, and health benefit costs, but DOL determines the prevailing wage to be simply $30, U.S. workers will be adversely impacted. Employers will be encouraged to hire H-1B workers instead of U.S. workers, saving themselves $10 in benefit costs per hour and putting downward pressure on the locally prevailing compensation. Hiring H-1B workers at $30 an hour for example, with no benefits, would allow employers to underprice labor by 30%—which is the average benefit share of total compensation costs for private industry workers28—and it could encourage employers to replace U.S. workers with H-1B workers, or hire H-1B workers instead of U.S. workers, since employers are not required to recruit and hire U.S. workers before hiring H-1B workers. H-1B workers and those employed through other LCA programs cannot be expected to complain about this or have the bargaining power to negotiate adequate fringe benefits, because their employers control and have near-total power over their immigration status, and some workers will be also willing to accept the lower compensation, because it will likely be far more than they could earn in their country of origin.

BLS already collects the necessary data to determine the appropriate amount of fringe benefits that should be required as a supplement to the OEWS wages used to set a prevailing wage. The Employer Costs for Employee Compensation (ECEC) report from the Bureau of Labor Statistics (BLS) “provides the average employer cost for wages and salaries as well as benefits per employee hour worked” for workers in the civilian economy.29 The ECEC reports the total average wages and benefits paid by employers and lists these data as they correspond to broad occupational employment categories. These data are also differentiated according to the average amount paid for the major categories of fringe benefits: paid leave, supplemental pay, insurance, retirement and savings and legally required benefits. The ECEC also reports the average total compensation, wages and salaries, and total costs of fringe benefits paid by employers, broken down by geographic region, census division, and locality.30

Using the aforementioned data sets from the ECEC, DOL can determine the appropriate level of fringe benefits that must be offered and paid to LCA and PERM program workers. The ECEC provides data on health and retirement benefits, and wages and wage-related pay such as paid leave and supplemental pay. The wages reflected in the OEWS survey capture the wages and wage-related parts of total compensation. Employers paying wages will already be paying the ‘legally required’ payroll taxes. Therefore, the compensation missing from the OEWS wage rates is the cost of retirement and health benefits, which are about 11% of private sector compensation. The amount of pay reflecting these benefits that employers of LCA and PERM program workers should pay can easily be determined by taking the ratio of the sum of health and retirement benefits to the wages paid (the sum of wages, paid leave and supplemental pay). This can be determined for a broad occupational grouping and perhaps done at a regional level as well. This ratio when multiplied by the OEWS wage shows the amount of benefits that would be comparable to that earned in the private sector or civilian sector.

Although the occupational groups and geographic areas listed and reported in the ECEC are not as numerous and detailed as those in the OEWS’s occupational categories and geographical areas, this should not deter the DOL from utilizing these data to calculate the percentage of wages that should be added on as fringe benefits to the OEWS wage. Only a percentage to be added on must be determined – not an exact dollar amount. 

Thus, the ECEC data are sufficient to provide DOL–by region and broad occupational group–an average level of insurance and retirement benefits received by employees in that job and in that area. Following precedent from the DBA and SCA, the fringe benefits could be paid by the employer through any combination of a variety of options, such as paid leave, health and life insurance, retirement and savings accounts, etc., or the employer could simply pay the benefits in cash.

Unfortunately, there is very little transparency regarding whether employers using the H-1B, H-1B1, E-3, and EB-2 and EB-3 programs are offering fringe benefits, or to what extent. A requirement that these fringe benefits be offered to LCA and PERM program workers would ensure that the wages and working conditions of similarly employed workers are not adversely impacted. 

The current DOL compliance guidance on benefits for H-1B workers encourages benefits arbitrage through outsourcing and fissuring. The Wage and Hour Division fact sheet on the subject (#62L) reads, “The employer must offer benefits to H-1B workers on the same basis, and in accordance with the same criteria, as the benefits the employer provides to similarly employed U.S. workers.”31 By defining similarly employed workers as restricted only to those directly employed by the H-1B employer, DOL is encouraging benefits arbitrage by outsourcing firms, which can offer substandard benefits to all its employees and still comply with this interpretation of the H-1B rules.

6. DOL should prohibit employer-provided private wage surveys from being used as alternative sources of wage data to set prevailing wages

Under the main H-1B prevailing wage regulation language at 20 C.F.R. §655.731, an employer has a number of options at their disposal to determine a prevailing wage for an LCA. In other words, the OEWS wage levels are just one of the available options. The employer may use one of the following sources to establish a prevailing wage: the OEWS wage, the wage set in an applicable Collective Bargaining Agreement, an applicable wage set by the Davis-Bacon Act or McNamara-O’Hara Service Contract Act, an Office of Foreign Labor Certification National Processing Center prevailing wage determination, or a wage set by an independent authoritative source or another legitimate source of wage data. However, if the employer is paying a higher wage to similarly situated U.S. workers that it already employs, then it must pay the H-1B worker same higher “actual wage,” that it is paying the U.S. worker. (Specifically defined as “the wage rate paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question.”)

Therefore, employers do not need to use the OFLC’s calculated levels from OEWS data to determine a prevailing wage for an LCA or permanent labor certification application. The NPRM would improve the longstanding problems in how the prevailing wage is determined when using the OFLC-generated OEWS wage rates, but in the NPRM, DOL states that it considered whether to prohibit—but ultimately decided to permit—the continued use of an independent authoritative source or another legitimate source of wage data, which includes private wage surveys provided by employers and accepted by DOL. Standards for such alternative sources of wage data are described in 20 CFR § 655.731. In our 2020 report, we showed in Table 1 that in 2019, at least 9% of all certified wages for H-1B positions on LCAs were set by a private wage survey or other source accepted by the OFLC as legitimate.32

We strongly urge DOL to eliminate the use of private wage surveys provided by employers for setting wage rates in the LCA programs or for EB-2 and EB-3 green cards. While the share of LCAs approved with wages set by private wages surveys is relatively small at the moment, it is likely that the use, and abuse, of private wage surveys will expand substantially after publication of a final rule that is consistent with the wage level percentiles proposed in the NPRM. This will occur because employers will be motivated to use private surveys as a loophole to avoid paying the new higher wage percentiles.

DOL’s justification for continuing to allow private wage surveys is based on an analysis that is confusing. On the one hand, the agency claims that private surveys yield a wage 20% higher on average than the OEWS equivalent, but also says that wage surveys are necessary for niche or very specialized markets where, “occupations [are] not well represented in OEWS datasets.”33 The two claims are in contradiction. If a private wage survey is used to establish a wage in a niche job market, presumably not covered by the OEWS, then how can DOL feasibly calculate the differences? Footnote 211 in the NPRM does not provide sufficient detail to test this claim.

If DOL does not immediately eliminate the use of private surveys, it should at least ensure that usage of such surveys are rare and approved in only exceptional cases. Employers should be required to provide extensive documentation and justification for why the OEWS is an inadequate data source for determining the prevailing wage.

The recent history of the use of private wage surveys to set wages in the H-2B visa program—a temporary work visa program for lower-wage jobs outside of agriculture including in landscaping, forestry, hospitality, and construction—is instructive and should inform DOL’s review of wage surveys and other sources of wage data for setting H-1B wages. The evidence is clear in the H-2B context that when employers use private wages surveys, they primarily use them to pay lower wages than would otherwise be required.

In 2013 when DOL raised the minimum H-2B prevailing wage from the 17^th wage percentile to the mean wage for the occupation and local area, H-2B employers immediately and en masse, shifted their business model to use private wage surveys to set H-2B wage rates at below-average wage rates. Evidence revealed in federal litigation clearly suggests that the shift to the use of private wage surveys was a systematic response to higher wage rates, and one that was clearly successful. Specifically, in the nine months beginning soon after the H-2B wage rule was updated—between July 1, 2013, and March 31, 2014—employers increased their submissions of private wage surveys for H-2B prevailing wage determinations by 3,182%, as compared with the 12 months leading up to the federal court decision that invalidated the previous H-2B wage rule. In 21.1% of those prevailing wage determinations set by private wage surveys, the certified H-2B wage was lower than the previous prevailing wage system where the Level I H-2B prevailing wage was set at the 17th percentile wage by occupation and local area, according to OFLC-generated OEWS wage survey data, and 94.4% of the determinations were for a wage that was lower than the Level II wage, at the 34th percentile.34 Despite the fact that the H-2B prevailing wage has been set at the local average wage and DOL restricted the use of private wage surveys in 2015, they are still commonly used and successful at lowering wages for H-2B workers. One clear example of this which has been detailed, is a group of H-2B workers employed as crabpickers in Maryland—they earned roughly 25% less per hour than they should have been paid according to the local corresponding OEWS wage.35

The downside risk of continuing to allow private wage surveys—creating loopholes and administrative burdens—outweighs the risk to workers that the OEWS prevailing wage results in lower wages. If DOL’s calculations are accurate, employers should welcome the elimination of private wage surveys because the OEWS provides lower wage requirements and reduced costs in terms of purchasing survey data and/or conducting entirely new surveys.

7. If DOL considers permitting the use of employer provided private wage surveys, it should first conduct a detailed analysis of their usage and impact on H-1B wage rates, make the findings public, and issue a separate NPRM focused solely on private wage surveys

In order to promote transparency and comport with the statutory requirement that H-1B employers “will provide working conditions for [H-1B workers] that will not adversely affect the working conditions of workers similarly employed,”36 DOL should immediately prohibit the use of private wages surveys. However if DOL wishes to still consider their usage, DOL should conduct a study to benchmark the use of alternative wage data and especially private wage surveys against the OFLC-generated OEWS prevailing wages, to identify whether there are any systematic biases in such sources. If such biases are found, DOL could propose a new NPRM with additional guidance and safeguards to ensure that the alternative wage sources are not undermining U.S. wage standards. DOL should also conduct an analysis on the occupations that have been approved for wage setting with private wages surveys, to examine which occupations employers are claiming to be so unique that they do not fit within the definitions of over 800 occupations available in BLS’s Standard Occupational Codes, as well as analyze whether private wage surveys have negatively impacted conditions for H-1B workers and similarly situated workers.

It is important to note that, while in the aggregate, the use of private wage surveys is roughly 6.5% according to the NPRM, we know from our own reviews of LCA disclosure data that some firms rely on private wage surveys extensively. DOL should examine how private wage surveys vary across firms, industries, and occupations. Firms that rely on private wage surveys for more than 3% of the positions in their LCAs should be scrutinized and audited to ensure they are not being utilized to undercut the standards set by OEWS wage data. 

8. DOL must put measures in place that would prevent employer misclassification of H-1B workers at the wrong wage levels

As noted earlier, the NPRM requires that minimum H-1B, H-1B1, E-3, EB-2, and EB-3 salaries are set at more realistic wage rates that reflect the local market rates for the jobs they fill. While each wage level is intended to correspond to the position description, in practice the employer has substantial discretion choosing the skill level and DOL does not verify that a prevailing wage is appropriate unless a lawsuit or a complaint is filed by a worker. Such complaints are unlikely since it would require a migrant worker to blow the whistle on their own employer, the same employer that controls the worker’s visa status and ability to remain in the United States. We are unaware of any cases in which DOL has investigated an LCA-stage misclassification of an H-1B wage level, but there have been reports of, for example, H-1B employers receiving approval for LCAs that certify they will pay employees at the same prevailing wage level despite having job titles that clearly warrant different wage levels.

Simply put, employer selection of skill levels should be anchored to the actual duties of the position and verified by DOL and USCIS. There is no reason to allow employers to identify a skill level on a whim. If DOL does not fix this obvious problem, then the NPRM’s core objective of eliminating wage arbitrage will be undermined.

Skill level misclassification and inconsistencies undermine good governance of the H-1B program. Even a cursory examination of the LCA and I-129 data shows that such misclassifications, whether purposeful or inadvertent, are common. For example, positions with job titles leading with ‘senior’ are frequently misclassified as Level I. And even within the same employer, identical job titles are classified under different skill levels.

Yet the effectiveness of this NPRM hinges on ensuring that employers properly and consistently classify their positions at the correct skill level. DOL should take two actions. First, it should update and expand the NPWC’s Prevailing Wage Determination Policy Guidance.37 Second, it must hold employers accountable for their skill level selections.

The policy guidance should be rewritten and expanded so that it not only serves PWD adjudicators but also all employers, whether they use the OEWS or a private wage survey to determine the prevailing wage. The document should clarify skill level classification and serve as compliance guidance for all employers. The most recent NPWC policy guidance, published in 2009, is obviously inadequate and outdated. Employers are not effectively or consistently interpreting and identifying skill levels. The description of each skill level, Levels I through IV, consists of a single paragraph of ambiguous language. For example, how many years of experience should Level II consist of? Can an employer’s position that requires two to three years of experience ever be classified as Level I (Entry-Level)? If a worker with a master’s degree is filling a position that typically requires only a bachelor’s degree, can they be bumped up in skill level?

All employers should be required to follow the five-step Prevailing Wage Determination process outlined on pages 9 through 13 to identify the position’s skill level. Employers should be required to document and retain those records for inspection by USCIS when the I-129 petition for the LCA is filed. This will ensure consistent skill level identification within and across companies whether the firm uses the OEWS, private wage survey, a CBA, or requests a PWD.

Then USCIS should ensure that the worker being placed in the position is not overqualified in terms of education and experience for the position’s skill level.

Consider this example: A well-known firm received approval for two different LCAs at the same wage level (Level II), even though one LCA had the job title Senior Software Engineer and the other had the job title Software Engineer.38 The firm, a major employer of H-1B workers, is not accounting for differences in skill levels as evident from its own job titles when selecting the wage level for the LCA. Both engineers and senior engineers are receiving the exact same salary and wage level, and they are approved by DOL with zero scrutiny. Using the DOL Prevailing Wage Determination Policy Guidance, the LCAs in this case should be instantly flagged by identifying keywords such as senior, head, chief, and lead in job titles, and should be checked to determine whether the prevailing wage levels are appropriate. This example underscores a broader need for DOL to create a more robust compliance system to ensure employers do not misclassify workers at inappropriate wage levels. Our own cursory review has found hundreds of similar examples.

As a result, the LCA and petition process should be updated so that DOL reviews the qualifications of individual workers before USCIS approves a petition, to ensure that wage levels match up with the age, education, and experience of the workers being hired through the LCA and PERM programs. While USCIS currently performs this role to some extent, its adjudicators lack expertise in wage-and-hour issues and do not have the same mandate to protect labor standards as DOL staff. Therefore, these functions should be undertaken by the proper agency. DOL and USCIS already have a mandate to cooperate on H-1B applications and enforcement; a memorandum of understanding between the Secretaries of Homeland Security and Labor could detail a process where DOL plays a prominent role in ensuring that H-1B workers are classified at the appropriate wage levels. Published guidance from DOL on skill levels that is more detailed, clearer, and more realistic would also be helpful for everyone involved—employers and adjudicators alike.

9. DOL has failed to enforce the “actual wage” component of the H-1B prevailing wage rule and should begin enforcing it immediately

Under the prevailing wage statute, although an employer has several options at their disposal to determine a prevailing wage for an LCA, they must offer the higher of either the prevailing wage or the “actual wage,” which the corresponding regulation at 20 C.F.R. §655.731 defines as “the wage rate paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question.”

DOL has not exercised its authority to enforce the actual wage requirement. This is a wasted opportunity for one of the most important tools DOL has at its disposal to hold employers accountable for required wages. In order to ensure that H-1B employers are not undercutting the wage rates they pay H-1B workers, DOL should immediately begin enforcing this requirement.

In late 2021, we published a report detailing how thousands of skilled migrants with H-1B visas working as subcontractors at well-known corporations like Disney, FedEx, Google, and others appear to have been underpaid by one firm to the tune of at least $95 million in one single year.39 The victims likely included not only the H-1B workers but also the U.S. workers who were either displaced or whose wages and working conditions were degraded when employers were allowed to underpay skilled migrant workers with impunity. The workers in question were employed by HCL Technologies, an India-based IT staffing firm that earned $11 billion in revenue in 2020. HCL is consistently one of the top 20 H-1B employers and appears to have engaged in the systematic and strategic wage theft of its H-1B workers by exploiting the lax to nonexistent enforcement of the actual wage requirement. According to its own internal documents, HCL targeted its new H-1B hires expressly based on the spread between what it paid its own U.S. employees versus what it pays its own H-1B workers.

The report discusses our analysis of an internal HCL document, released as part of a whistleblower lawsuit against the firm. The document suggests that HCL—and perhaps other firms with similar business models—are not paying the legally required amount that corresponds to what is being paid to U.S. worker employees at HCL. The HCL document revealed that the large-scale illegal underpayment of H-1B workers that appears to be occurring is a core part of the HCL’s competitive strategy, and likely facilitated $95 million in stolen wages from HCL’s H-1B employees in just one year. Such abuses are surely widespread among H-1B employers because DOL has done virtually nothing to ensure program integrity by enforcing the H-1B wage rules, in particular the actual wage rule.

DOL could easily begin enforcing the actual wage provision by requiring H-1B employers to submit evidence documenting the wage rates paid to U.S. workers who are similarly employed in occupations for which the employer is also hiring H-1B workers. Employers must already “keep records for how they calculate the actual wages.” To our knowledge, DOL has never initiated an investigation regarding compliance with the “actual wage” provision of the law. The DOL Secretary should exercise their authority to inspect the actual wages paid by H-1B employers. The Secretary can do so without a complaint from a worker, under their authority to certify investigations, and should do so if presented with credible evidence of violations. DOL should provide clear compliance guidance for the actual wage provision and then require that H-1B employers attest to the wage rates they pay similarly situated U.S. workers and include them in the LCA documentation, and DOL should conduct audits of employers on a regular basis to ensure compliance. The audits could begin with the employers that hire large numbers of H-1B workers, for example, those that employ more than 25 H-1B workers, as well as H-1B dependent firms.

Secondary employers should also be required to submit LCAs and evidence documenting the wage rates paid to U.S. workers in the occupations that H-1B workers will be hired for through an outsourcing firm. Otherwise, some H-1B outsourcing firms—which almost exclusively pay H-1B workers at the two lowest wage levels, and employ H-1B and L-1 workers almost exclusively—will be able to game the system by using the actual wage paid to their own employees to meet the requirement, and not the employees of the secondary employer, where the H-1B workers will be placed—and where wages paid to the U.S. workforce are likely to be higher.

10. DOL should require secondary employers of H-1B workers to attest that they will not adversely affect wages and working conditions

Outsourcing companies are using the H-1B program to underpay H-1B workers, replace U.S. workers, and send tech jobs abroad. 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.40 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 Southern California Edison—have laid off thousands of U.S. workers who were forced to train their own replacements. Eventually, many of the outsourced jobs filled by H-1B workers get moved offshore.41

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 the New York Times and Bloomberg, 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.42

The outsourcing/staffing model of employment generally may increase the incidence of labor and 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 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 subcontractor43 (in this case the temp agency or subcontractors are the H-1B outsourcing firms). Research shows that fissuring leads to a wage penalty for workers who are subcontracted, employed as temps, and work for staffing firms,44 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.

One way to address the abuses of the outsourcing/staffing firms, which operate as secondary employers, would be to issue policy guidance and update the appropriate DOL ETA application forms so that secondary employers to which H-1B workers are outsourced will be required to file Labor Condition Applications with DOL. Such guidance, which was considered in 2021 but then abandoned,45 would close the loophole that allows firms like Disney and Southern California Edison to replace its U.S. employees with H-1B workers by employing them through an outsourcing firm.46 Using Disney as an example, implementing this rule would require client firms like Disney—that benefit and profit from hiring outsourcers—to acknowledge their employment relationship with H-1B workers who are employed by outsourcers like Infosys and Tata, by requiring Disney to file its own LCA. By doing so, Disney would attest that hiring the H-1B worker through the outsourcer is not adversely affecting the wages and working conditions of the Disney workforce.

11. DOL should publish Labor Condition Application and permanent labor certification data in real-time on a central database

DOL publishes detailed LCA and permanent labor certification (PERM) disclosure data, but it is typically lagged by at least one quarter, and often much longer. The agency should publish LCA and PERM public access file applications in real-time to enable U.S. workers to apply for these positions. This would enhance the integrity of the programs and better align them to their purposes by ensuring that workers hired with temporary visas and green cards are filling true labor shortages.

U.S. workers have long complained loudly that employers hide job openings from them, reserving them for visa holders and PERM applicants. Even when those jobs are advertised, as is required by the PERM labor certification process, they are often placed in obscure locations. Workers call such job advertisements “fake job postings.” A recent ProPublica investigation has referred to the practice as “The Tech Recruitment Ruse.”47

The agency already collects the data and publishes it regularly on the OFLC disclosure data. But even a one-quarter year lag time renders it useless for job seekers. Publishing it in real-time would unlock enormous value for workers at little or no cost to the government or employers.

12. DOL had the requisite legal authority to update the H-1B prevailing wage levels

As discussed in detail in our 2020 report, DOL has the requisite legal authority to change the H-1B prevailing wage levels to an appropriate rate that protects wage standards and prevents adverse effects on U.S. workers in H-1B occupations. No analyst or commentator has credibly argued otherwise. For far too long, the H-1B wage levels have been set at an artificially low level that undercuts U.S. wage standards, therefore, it is reasonable for DOL to increase the minimum wage levels so that Level I is no lower than the local median wage.

13. DOL should expand the LCA process to include a front-end screening process that reviews the labor and employment law records of employers; those that have violated certain laws in the previous five years should be prohibited from hiring through the H-1B program

In a previous comment to the Department of Homeland Security (DHS), regarding the 2023 H-1B “modernization” rule,48 we recommended that DHS should expand the H-1B Registration System to include a front-end screening process that reviews the labor and employment law records of employers. If employers have violated certain laws, they should be prohibited from hiring through the H-1B program. We further recommended that DHS should consult with DOL to develop a list of key applicable laws and operate the system jointly with DOL, and ideally, also operate the updated registration process jointly, with DOL screening employer records through the LCA process. We reiterate that recommendation here and urge DOL to take steps to exclude lawbreaking employers that violate labor, employment, and immigration laws. While we realize our comment will only be read by DOL, we nevertheless include our discussion about DHS’s role in this process because we believe DOL and DHS should work in tandem to reduce labor and employment violations in the H-1B program.

In the 2023 proposed rule, Modernizing H-2 Program Requirements, Oversight, and Worker Protections,49 DHS proposed to create or expand several additional bars to approval of new petitions filed by H-2 petitioners who have previously committed legal violations related to the H-2 programs. EPI submitted comments generally supporting the proposed changes, which were adopted as a final rule.50 Although they fail to go far enough on their own, if adequately implemented the provisions will help curb abusive employers’ exploitation of the H-2 programs and will level the playing field for employers that obey the law. EPI additionally commented that employers that commit serious violations repeatedly should be permanently banned from the H-2 programs, as they have demonstrated their inability or unwillingness to comply with the programs’ requirements.

In those comments EPI further recommended that the DHS strengthen section 214.2(h)(10)(iii)(3), which addresses violations of “any applicable employment-related laws and regulations” by expanding it to include a number of other violations and making denial of petitions mandatory—rather than discretionary—if employers have violated any of those laws in the preceding five years.51 

We believe DHS should consider similar provisions for employers seeking to hire through the H-1B program because there have been numerous credible accusations of lawbreaking against H-1B employers, as well as investigations and litigation, finding that H-1B employers and recruiters that have been guilty of wage theft, financial bondage, and even human trafficking. The reality is that DOL has limited resources and has interpreted its authority to investigate H-1B employers as constrained, and it is difficult in practice for H-1B workers to come forward and complain themselves about employer lawbreaking—because they could face retaliation and lose their status, and possibly the opportunity to become lawful permanent residents—which means DOL likely receives fewer complaints than they otherwise would. And even when DOL does receive complaints, as numerous reports have shown, DOL often lacks the resources to investigate and take action against lawbreaking employers.52

Thus, at a minimum, to keep lawbreaking employers out of the H-1B program, DHS should have its own list of legal violations and deny any petition for an employer that has violated any of the laws on the list in the preceding five years. That would act as a backstop to prevent lawbreaking employers from hiring through the H-1B program. At present, as DHS rightly points out in the November 2023 Modernizing H-2 Program NPRM, even some of the worst violators of the law are allowed to recruit and hire H-2 workers. We know that this is also the case in the H-1B program. In fact, in the H-1B program, some of the biggest users of the program are also the most egregious violators, receiving thousands of H-1B petition approvals per year. And then after they violate the law, H-1B employees are afraid to complain to authorities because their immigration status is tied to their employer, and even if they are brave enough to lodge a complaint, as noted above, DOL may lack the resources to investigate violations and hold the employer accountable.

As EPI also recommended in the H-2 NPRM, DHS should go further to implement this by also cooperating with DOL to develop a front-end screening process that takes place at the labor condition application (LCA) stage, to vet the labor and employment law records of employers before they can be allowed to hire through the H-1B program. In multiple EPI reports and in comments in response to NPRMs, EPI has made a similar proposal—namely, that a front-end screening process should be created to prohibit employers with track records of wage and hour, labor, immigration, and other legal violations from hiring through the H visa programs.

To make a front-end screening process a reality, ideally, DOL should require employers to register for eligibility to use the H-1B program at the LCA stage, so employer records on compliance with labor and employment laws can be screened up front, before getting to the registration or petition stage. DOL could set up a registration process in which employers list basic information about their business and the purported need for H-1B workers (as is already done via the DOL temporary labor certification forms). As part of that new process, employers could be required to attest, under penalty of perjury and of being banned from hiring through the H-1B and other visa programs, that they have not been found to have violated any of the listed labor, employment, wage and hour, immigration, civil rights, disability, anti-trafficking, or anti-discrimination laws during the past five years. DOL could then attempt to verify by cross-referencing enforcement data and other relevant records—and could cooperate with other worker protection agencies like the NLRB and EEOC—and ultimately certify employers that have not violated the applicable laws.

To break established patterns of abuse, employers that have violated any labor, employment, wage and hour, immigration, civil rights, disability, anti-trafficking or anti-discrimination laws should be prohibited from submitting an LCA (or having their LCA approved) and ultimately not be allowed to hire H-1B workers. Employers that have clean records and an LCA approved by DOL could then continue on with the petition process at USCIS.

Given the present and likely future reality that WHD and other worker protection agencies will continue to be vastly underfunded and understaffed,53 such a screening process on the front end of the H-1B application process could act as a useful and efficient tool to prevent legal violations without WHD having to go through lengthy and costly investigations on the back end, after workers have arrived in the United States and been robbed or otherwise exploited.

At the petition level, if a new screening process at DOL is not created that takes place before or as part of the LCA process, DHS should, at a minimum and as noted above, build on proposed section 8 C.F.R. 214.2(h)(10)(iii)(B) for H-2 petitions by creating a list of key labor, employment, wage and hour, immigration, civil rights, disability, anti-trafficking, and anti-discrimination laws, the violation of which would establish strong evidence that an employer does not treat their employees well and is unlikely to follow employment and immigration laws with respect to their H-1B employees. Although this would work best in tandem with a front-end screening process at the LCA stage, DHS could make significant progress in keeping lawbreaking employers out of the H-1B programs by mandating that any employer that has violated any of the listed laws will be prohibited from having a petition approved for hiring H-1B workers.

Another option would be for DHS to modify the existing H-1B Registration System so that it also screens the records of employers. That way DHS could use it to both manage the annual cap and to assess and certify whether employers are eligible to hire through H-1B based on their past legal violations. Employers could be required to attest, under penalty of perjury and of being banned from hiring through the H-1B and other visa programs, that they have not been found to have violated any of the listed labor, employment, wage and hour, immigration, civil rights, disability, anti-trafficking, or anti-discrimination laws during the past five years. USCIS could work to verify the employer attestation, although ideally DOL should partner with to do this, by cross-referencing DOL enforcement data and other relevant records—preferably also in partnership with other worker protection agencies like the NLRB and EEOC—and would then ultimately certify employers that have not violated the applicable laws, allowing them to continue with the registration process.

Conclusion

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 a pathway that has serious deficiencies when it comes to the workplace rights of migrant workers and for preserving U.S. labor standards. While less is known about the other LCA programs, H-1B1 and E-3, they have even fewer applicable rules in place to protect workers, which likely means they are having similar impacts on worker rights and labor standards. By issuing this NPRM, DOL has taken an important first step towards reversing decades of artificially depressed wage rates for H-1B workers, and for making the prevailing wage methodology rules consistent across the other LCA programs and for EB-2 and EB-3 green cards. This will benefit other similarly situated workers and simplify and streamline the prevailing wage determination process. Nevertheless, as our comment recommends, more must be done—in this rulemaking and other executive actions—to improve the effectiveness of the updated prevailing wage rates and on enforcement in the LCA and PERM programs, in order to safeguard U.S. wages and labor standards.

Daniel Costa
Director of Immigration Law and Policy Research
Economic Policy Institute
Washington, DC

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

Endnotes

1. 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; Ron Hira and Daniel Costa, New evidence of widespread wage theft in the H-1B visa program: Corporate document reveals how tech firms ignore the law and systematically rob migrant workers, Economic Policy Institute, December 9, 2021.

2. 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, request for comments, U.S. Department of Labor, 20 CFR Part 655, DOL Docket No. ETA-2025-0008, RIN 1205-AC24 (October 2, 2025).

3. 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; for additional discussion and background, see Daniel Costa, “EPI comment on DOL’s 2025 Interim Final Rule modifying the AEWR methodology for H-2A farmworkers,” Public Comments, Economic Policy Institute, December 1, 2025.

4. PERM stands for Program Electronic Management Review, and is the first step for employers who wish to sponsor an employee for permanent residence in the United States through the EB-2 and EB-3 categories.

5. 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.

6. George Borjas, The H-1B Wage Gap, Visa Fees, and Employer Demand, NBER working paper 34793, March 2026. See pages 3-4.

7. USCIS, X.com post, May 21, 2026 at 1:37 PM, https://x.com/USCIS/status/2057561453373399339

8. https://www.newyorkfed.org/research/college-labor-market#–:explore:outcomes-by-major

9. Here are just a sample of some of the recent news accounts in major media outlets: Katherine Bindley, “The ‘Great Hesitation’ That’s Making It Harder to Get a Tech Job,” Wall Street Journal, May 18, 2025; Christopher Rugaber, “Unemployment among young college graduates outpaces overall US joblessness rate,” Associated Press, June 26, 2025; Sydney Ember, “Young Graduates Face the Grimmest Job Market in Years,” NY Times, March 24, 2026.

10. 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.

11. See for example, Connor O’Brien, Jeremy Neufeld, and Amy Nice, A Prescription for Fixing the Prevailing Wage System: Replacing Blind Benchmarking with Experience Benchmarking, Institute for Progress, March 27, 2026.

12. See Overview section in Wage and Hour Division, “H-1B Program,” web page on the U.S. Department of Labor website.

13. U.S. Department of Homeland Security, U.S. Citizenship and Immigration Services, Modification of Registration Requirement for Petitioners Seeking To File Cap-Subject H-1B Petitions, 86 Fed. Reg. 1676, at 1720, Table 7, June 8, 2021.

14. See Table 12 in 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 (September 24, 2026).

15. 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.

16. NPRM at 15490.

17. Norman Matloff, “H-1B Visas Are Transforming America,” Compact, October 8, 2025; Norman Matloff, Are foreign students the ‘best and brightest’? Data and implications for immigration policy, Economic Policy Institute, Briefing Paper #356, February 28, 2013.

18. NPRM at 15490.

19. Office of Foreign Labor Certification, OFLC Wage Search, last visited on May 23, 2026.

20. United States Citizenship and Immigration Services, Characteristics of H-1B Specialty Occupation Workers, Fiscal Year 2024 Annual Report to Congress, October 1, 2023 – September 30, 2024, U.S. Department of Homeland Security, April 29, 2025.

21. U.S. Bureau of Labor Statistics, Table 5.3 Educational attainment for workers 25 years and older by detailed occupation, 2022–23 (Percent), Employment Projections, U.S. Department of Labor, retrieved May 23, 2026; U.S. Bureau of Labor Statistics, Table 11b. Employed people by detailed occupation and age, Labor Force Statistics from the Current Population Survey, U.S. Department of Labor, retrieved May 23, 2026.

22. U.S. Bureau of Labor Statistics, Table 11b. Employed people by detailed occupation and age, Labor Force Statistics from the Current Population Survey, U.S. Department of Labor, retrieved May 23, 2026.

23. Connor O’Brien, Jeremy Neufeld, and Amy Nice, A Prescription for Fixing the Prevailing Wage System: Replacing Blind Benchmarking with Experience Benchmarking, Institute for Progress, March 27, 2026. PDF available here: https://ifp.org/wp-content/uploads/IFP_Prevailing_Wage_Experience_Benchmarking_.pdf

24. NPRM at 15490.

25. NPRM at 15474.

26. For the Davis-Bacon Act, see 40 USC §3141(2); and the Service Contract Act at 41 USC §351(a)(2).

27. Bureau of Labor Statistics, U.S. Department of Labor, Occupational Employment Wage Statistics, Frequently Asked Questions, at Section C, Number 8.

28. Bureau of Labor Statistics, U.S. Department of Labor, Employer Costs for Employee Compensation – December 2025, March 20, 2026.

29. Bureau of Labor Statistics, U.S. Department of Labor, Employer Costs for Employee Compensation – December 2025, March 20, 2026.

30. See tables, Bureau of Labor Statistics, U.S. Department of Labor, Employer Costs for Employee Compensation – December 2025, March 20, 2026.

31. Wage and Hour Division, “Fact Sheet #62L: What benefits must be offered to H-1B workers,” U.S. Department of Labor, Revised July 2008.

32. 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.

33. NPRM at 15479.

34. See discussion of the 2013 Interim Final Rule setting the H-2B prevailing wage methodology in Daniel Costa, The H-2B temporary foreign worker program: For labor shortages or cheap, temporary labor? Economic Policy Institute, January 19, 2016.

35. Daniel Costa, “H-2B crabpickers are so important to the Maryland seafood industry that they get paid $3 less per hour than the state or local average wage,” Working Economics (Economic Policy Institute blog), May 26, 2017.

36. 8 U.S.C. 1182 (n)(1)(A)(i)(II).

37. Employment and Training Administration, Prevailing Wage Determination Policy Guidance, Nonagricultural Immigration Programs, U.S. Department of Labor, Revised November 2009.

38. Ethan Baron, “H-1B: Uber snatches up more foreign-worker visas as it lays off hundreds of employees,” Mercury News, October 17, 2019.

39. Ron Hira and Daniel Costa, New evidence of widespread wage theft in the H-1B visa program: Corporate document reveals how tech firms ignore the law and systematically rob migrant workers, Economic Policy Institute, December 9, 2021. See also, news coverage of our report, for example, Lauren Kaori Gurley, “Analysis Claims Migrant Tech Workers Have Been Underpaid by Tens of Millions,” Vice News, December 9, 2021.

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

41. 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.

42. Eric Fan, Zachary Mider, Denise Lu, and Marie Patino, “How thousands of middlemen are gaming the H-1B program,” Bloomberg, July 31, 2024; Julia Preston, “Large Companies Game H-1B Visa Program, Costing the U.S. Jobs,” New York Times, November 10, 2015.

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

44. 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.

45. Employment and Training Administration, U.S. Department of Labor, “U.S. Department of Labor revises interpretation, issues new guidance clarifying filing, compliance requirements in H-1B visa program,” Press Release Number 21-97-NAT, January 15, 2021.

46. Julia Preston, “Pink Slips at Disney. But First, Training Foreign Replacements,” New York Times, June 3, 2015.

47. Alec MacGillis, “The Tech Recruitment Ruse That Has Avoided Trump’s Crackdown on Immigration,” ProPublica, June 3, 2025.

48. Daniel Costa and Ron Hira, “EPI comments on DHS’s “Modernizing H-1B” proposed rule,” Public Comments, Economic Policy Institute, December 22, 2023; commenting on U.S. Department of Homeland Security, Modernizing H-1B Requirements, Providing Flexibility in the F-1 Program, and Program Improvements Affecting Other Nonimmigrant Workers, Notice of proposed rulemaking, CIS No. 2745-23, DHS Docket No. USCIS-2023-0005, RIN: 1615-AC70, 88 Fed. Reg. 72870 (October 23, 2023).

49. U.S. Department of Homeland Security, Modernizing H-2 Program Requirements, Oversight, and Worker Protections, Notice of Proposed Rulemaking, CIS No. 2740-23 and DHS Docket No. USCIS-2023-0012, RIN: 1615-AC76, 88 Fed. Reg. 65040 (September 20, 2023).

50. U.S. Department of Homeland Security, Modernizing H-2 Program Requirements, Oversight, and Worker Protections, Final Rule, CIS No. 2740-23; DHS Docket No. USCIS-2023-0012, RIN 1615-AC76, 89 Fed Reg. 103202 (December 18, 2024).

51. See EPI comment on the H-2 programs in the comment submitted to DHS in November 2023; Daniel Costa, EPI comments on DHS’s proposed rule on “Modernizing H-2 Program Requirements, Oversight, and Worker Protections,” Economic Policy Institute, November 20, 2023.

52. See for example, Rebecca Rainey, “Inadequate Labor Department Resources Stymie Enforcement Efforts,” Bloomberg Law, November 7, 2023.

53. See for example, AFL-CIO, Workers’ Rights Ice’d Out, February 25, 2026; Rebecca Rainey, “Trump’s Federal Workforce Cuts Hit Labor Department Enforcement,” Bloomberg Law, Feb. 24, 2025; 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, October 4, 2024 (see Figure J); 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; Ihna Mangundayao, Celine McNicholas, and Margaret Poydock, “Worker protection agencies need more funding to enforce labor laws and protect workers,” Working Economics blog (Economic Policy Institute), July 29, 2021.

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 $600 per reclassified worker annually.

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.

Division of Humanitarian Affairs
Office of Policy and Strategy
U.S. Citizenship and Immigration Services
Department of Homeland Security
5900 Capital Gateway Drive
Camp Springs, MD 20746

Re: DHS Docket No. USCIS-2025-0370, Employment Authorization Reform for Asylum Applicants, Notice of Proposed Rulemaking (Feb. 23, 2026) ¹

To whom it may concern:

The Economic Policy Institute (EPI) submits this comment strongly opposing the Department of Homeland Security’s (DHS) Notice of Proposed Rulemaking (NPRM) titled Employment Authorization Reform for Asylum Applicants, published February 23, 2026. and assigned DHS Docket No. USCIS-2025-0370 (i.e. the proposed rule).

About EPI and organizational interest

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 on temporary immigration protections and Employment Authorization Documents (EADs), and on labor standards enforcement for both the low-wage and professional workforce. EPI has also provided expert testimony about the U.S. immigration system to both the U.S. Senate and House of Representatives, as well as state legislatures.

Summary of the comment

The proposed rule is designed to force asylum applicants seeking haven in the United States to live in the country without being able to work or support themselves and their families. Among other changes, the proposed rule introduces extreme and potentially indefinite delays to obtain a work permit, as it proposes to extend the waiting period to apply for work authorization from 150 days to 365 days, increase the mandatory processing timelines once an initial work permit application is received from 30 days to 180 days, and pause initial work permit processing completely when average affirmative asylum processing times exceed an average 180 days.1 The proposed rule also imposes many new eligibility barriers for both initial and renewal work permits, and would make approval of both applications completely discretionary, meaning asylum-seekers may be denied employment authorization for no reason at all.2

This proposed rule would be acutely harmful to asylum-seekers, but also to employers, coworkers, and spouses and children who rely on asylum-seekers’ employment and income. From the perspective of worker rights, labor standards, and growth in the overall economy, this NPRM raises at least four significant concerns that should be avoided by withdrawing the proposed rule in full.

First, DHS ignores the true value and impact of work authorization on the workforce, and fails to estimate the negative economic impacts that will result from the NPRM. In addition, the proposed rule would impact many workers already participating in the U.S. workforce, including individuals the NPRM classifies as “initial” asylum applicants who previously held lawful employment authorization through programs such as Temporary Protected Status (TPS), humanitarian parole, or deferred action. By focusing on deterrence of future migration while overlooking these workforce impacts, the NPRM substantially understates both the disruption the rule would cause and the reliance interests at stake.

Second, the NPRM rests on the flawed assumption that employers can easily replace asylum-seeking workers who lose employment authorization, and that such replacement can happen quickly and without disruption to the economy. In reality, sudden workforce losses that result from the NPRM terminating or putting in jeopardy the work authorization of roughly 2 million current workers would disrupt operations across multiple industries, forcing employers to increase mandatory overtime, heightening workplace safety risks, and creating significant operational instability that would impact not only asylum-seekers but also their coworkers. Employers would also lose the experience and job-specific skills that many asylum applicants already possess.

Third, by making it far more difficult for asylum-seekers to obtain or renew work authorization, the proposed rule would eviscerate the workplace rights of millions of current and future workers, pushing many into the informal economy, increasing the risk of wage theft, retaliation, and other forms of worker exploitation. This shift would also undermine labor and employment law enforcement by making workers less likely to report violations or cooperate with investigators, weakening workplace protections and lowering labor standards for all workers. The NPRM fails to acknowledge the scope of these enforcement and labor-standards consequences for U.S.-born citizens and foreign-born workers, half of whom are U.S. citizens.

Fourth, the NPRM fails to consider the substantial reliance interests that workers have developed around a predictable system of asylum-based employment authorization, which the NPRM would upend.

Far from streamlining the regulation of asylum-related employment authorization, the proposed rule would harm workers across the board. For these reasons, DHS should withdraw the proposed rule.

The worker rights of millions are protected by EADs

The role that Employment Authorization Documents (EADs) play when it comes to protecting worker rights and uplifting workplace standards should not be ignored and cannot be overstated. For workers who lack a permanent or more durable immigration status, obtaining a temporary EAD can mean having enforceable workplace rights that an individual would otherwise not have. While all workers have some labor and workplace rights under U.S. law—regardless of immigration status—enforcing them in practice becomes virtually impossible because of the threat of deportation, which prevents workers who lack an immigration status or an EAD from calling out lawbreaking employers and demanding that they comply with the law, or from reporting workplace violations to labor enforcement agencies. But having an asylum-based EAD, or protection from deportation through temporary administrative immigration protections like parole, Temporary Protected Status, deferred action—accompanied by an EAD—means that, in practice, workers can report workplace violations to government officials without fear of retaliation that can lead to deportation. It also means that a worker with an EAD can be employed by just about any U.S. employer and change jobs or employers, unlike, for example, migrant workers employed with temporary visas who can only be employed by the sponsor of their visa.

Altogether, nearly 5.6 million people in the U.S. held a temporary but precarious immigration status in 2024, including over 2 million people who are asylum-seekers. (see Table 1 below).

Table 1

While these statuses and protections are only a band-aid for a flawed immigration system that is deeply in need of reform,3 they have been shown to protect millions of workers from some of the worst forms of employer lawbreaking. Employers also greatly benefit from workers having a protective status and a work permit because it allows them to lawfully employ millions of people who would otherwise not be eligible to work, leading to billions in economic contributions to the U.S. economy and generating demand that stimulates growth.

DHS ignores the positive value and impact of work authorization on the workforce and economy, and the negative impacts of terminating and delaying work authorization

In the NPRM, DHS does not estimate and consider the true value and impact that EADs have on the workforce and economy, not even specifically for asylum-seekers. There are examples of existing research showing the important economic contributions that workers with temporary immigration protections and EADs are able to make thanks to being work-authorized. These estimates are relevant because parole, TPS, and DACA recipients are likely to see similar wage gains associated with having an EAD, due to gaining the ability to work lawfully, which brings with it the practical ability to enforce workplace rights and standards. In addition, may persons with protections like TPS and DACA may also be asylum applicants.

One estimate from the American Immigration Council estimated that when the TPS population was approximately 354,000 in 2021, “TPS holders contributed more than $2.2 billion in taxes, including almost $1 billion to state and local governments,” as well as “held $8 billion in spending power.”4 Another estimate by Moriarty found that TPS-eligible individuals “annually contribute some $31 billion in wages to the national GDP.”5

Research has also quantified some of the contributions made by persons who have an EAD because they qualified for Deferred Action for Childhood Arrivals (DACA). DACA was created by DHS in 2012, and recipients are eligible for protections from deportation and EADs that are valid for two years and renewable. More than 835,000 persons have benefitted from DACA, and more than 500,000 were enrolled as of 2024.6 Svajlenka and Truong found that DACA recipient households “pay $6.2 billion in federal taxes and $3.3 billion in state and local taxes each year,” and “after taxes, these households hold $25.3 billion in spending power,” and that DACA recipient families “own 68,000 homes, making $760 million in mortgage payments and $2.5 billion in rental payments annually.”7

When it comes to measuring the workplace impact and economic benefits of workers being issued an EAD, there are a few examples that are worth citing here. One is an annual survey of DACA recipients that was conducted in 2024 for the ninth time. The most recent survey, conducted by Wong et al. and published by the Center for American Progress, showed that DACA has been an essential tool to improve the economic and educational outcomes of recipients.8 In terms of the impact that deferred action and an EAD have had on the employment of DACA recipients: 59.1% of respondents moved to a job with better pay; 47.3% moved to a job with better working conditions; 47.5% moved to a job that “better fits [their] education and training”; 49.6% moved to a job that “better fits [their] long-term career goals”; 57.3% moved to a job with health insurance or other benefits; and 19.6% of respondents obtained professional licenses.

Wong et al. also measured the impact of EADs on DACA recipients’ wages, finding that “[d]ata from the past nine years show that DACA has had a significant and positive effect on wages: Recipients’ average hourly wage more than doubled from $11.92 to $31.52 per hour—an increase of 164.4 percent—after receiving DACA.” These significant wage increases are no doubt a result of the labor and workplace rights and stability that DACA recipients gain from having an EAD.

Orrenius and Zavodny examined the wage and employment impact of TPS9—which allows those who are eligible to also be granted an EAD. They looked specifically at migrants from El Salvador, finding that having TPS increased employment rates, and that less-educated Salvadoran men who were employed earned 13% more if they had TPS. They note that “As a whole, the results suggest that less-educated Salvadoran men who receive TPS are able to move into better jobs and become more selective about the jobs they hold, increasing their earnings but also their job search and unemployment incidence.”

One other analysis comes from Kallick,10 looking specifically at asylum-seekers in New York and nationwide, assesses the wage impact of being issued an EAD. Relying on previous methodologies for measuring the impact of a lawful immigration status being granted to unauthorized immigrants, Kallick estimates that asylum-seekers who are granted EADs increase their wages by 10%.

While the relative benefits of precarious and temporary immigration protections and EADs to migrant workers and the broader economy are clear, it is important to note here that because of the NPRM’s new provisions and pauses in processing, a significant share of the 2 million EADs held by asylum-seekers are unlikely to be renewed, or at a minimum, will be substantially delayed—and initial applications will not be granted—despite meeting the statutory requirements for issuance. This violates the statute and will leave hundreds of thousands of workers at least, and possibly millions, unemployed and without the ability to feed and house themselves, causing them to rely on homeless shelters and food banks, which are already overstretched given the current state of the economy and the affordability crisis. Thus, DHS through this NPRM will intentionally hurt the economy and eliminate the economic benefits for workers and employers that EADs held by asylum-seekers create—and exacerbate a crisis among social safety net providers—a fact that the NPRM does not grapple with or address.

In the meantime, EADs obtained through the asylum process, like those obtained through TPS, parole, and DACA, can mean the difference between having rights on the job or being extraordinarily vulnerable to the worst abuses by employers. While the current administration has claimed they want to help U.S. workers, actions like the mass detention and deportation of millions of workers and canceling EADs reveal they are willing to degrade conditions and standards for all workers, as well as kill jobs and shrink the economy, in order to carry out their extreme immigration enforcement agenda.11

If the NPRM is not withdrawn, millions of workers will be more easily exploited by their bosses and driven into the informal economy. That, in turn, will reduce their tax contributions that support the social safety net and lower their wages significantly12—ultimately hurting U.S workers in low-wage industries and the U.S. economy writ large by driving down demand for goods and services. It will also leave employers without millions of reliable employees in industries like construction, hospitality, childcare, agriculture, food processing and production, and more.

The NPRM underestimates the economic harm to initial asylum applicants who are already employed in the U.S. workforce

The NPRM rests heavily on the premise that restricting access to asylum-based work authorization will deter future asylum applicants by reducing the perceived “pull factor” of employment opportunities in the United States given the lengthy asylum backlog.13 While briefly referenced above, it is worth highlighting that this premise overlooks that many “initial” asylum employment authorization applicants are workers who are already here, including many who are gainfully employed.

Since January 2025, the federal government has terminated or moved to dismantle legal immigration programs that provided work authorization to hundreds of thousands of individuals, including several countries’ TPS designations, the CBP One parole program, the parole program for Cubans, Haitians, Nicaraguans, and Venezuelans (CHNV), multiple family reunification parole programs, and DACA.14 Many workers whose work permits have been terminated or threatened by these changes—and who are also eligible for asylum—are filing asylum applications and seeking initial employment authorization based on their pending applications.

The NPRM acknowledges this trend in passing,15 but largely sidesteps its implications—namely, that the NPRM’s sweeping restrictions on employment authorization for “initial asylum applicants” will largely fall on individuals who are already integrated into the lawful workforce. These workers are not hypothetical future entrants; they are experienced employees currently working in hospitals, manufacturing facilities, construction sites, hotels, schools, and public services. The NPRM therefore risks removing from the workforce hundreds of thousands of workers who have already been performing essential roles in the U.S. economy.

By focusing on speculative deterrence effects for future migrants while overlooking the proposed rule’s immediate impact on workers already embedded in the U.S. economy, the NPRM fails to accurately assess the scope of the disruption the proposed rule would cause. This flawed premise permeates the NPRM’s analysis and projected impacts and, on its own, warrants withdrawal of the proposed rule.

The NPRM incorrectly assumes that asylum-seekers who lose employment authorization can easily be replaced and ignores the resulting disruption to the economy

The NPRM suggests that asylum-seeking workers who lose employment authorization may be replaced and that the resulting shifts may lead to increased hours or compensation for currently employed workers.16 Although the NPRM acknowledges that restrictions on asylum-based employment authorization may lead employers to rely more heavily on currently employed workers through increased hours or overtime, it largely treats these effects as a potential transfer of compensation rather than as a source of workforce disruption.17 These assumptions simply do not reflect the realities in which many asylum applicants work.

A) The NPRM would shrink the legal workforce, exacerbating staffing issues in key industries

Asylum applicants are employed in a number of key industries, such as construction, transportation, manufacturing, food preparation and service, and building and grounds maintenance.18 Employers in sectors such as health care, long-term care, hospitality, education, and logistics frequently report difficulty recruiting and retaining sufficient numbers of workers.19 In these and other industries, the loss of experienced workers cannot easily be offset by replacement hiring. This is the case, in part, because of the Trump administration’s immigration enforcement policies, which are resulting in stagnant population and workforce growth, leaving fewer available workers to fill positions previously held by asylum-seekers.20

The NPRM as a result will exacerbate staffing issues in key industries, by pausing, terminating, or simply not adjudicating EAD applications. Further, the NPRM provides no empirical analysis demonstrating that employers will be able to replace workers who lose asylum-based employment authorization. Instead, the proposed rule rests on speculative assumptions that are inconsistent with the experience of the industries most affected.

B) The NPRM would increase mandatory overtime and workload pressures on remaining workers

Across unionized industries, abrupt workforce losses rarely produce the seamless labor substitution envisioned in the NPRM. Instead, employers often struggle to recruit qualified replacements, leaving operations understaffed for extended periods. In some cases, employers may scale back operations or lay off additional workers when they can no longer meet production or service demands due to the loss of experienced personnel.21 These dynamics are particularly severe in rural areas and specialized industries where the available labor pool is already limited and recruiting new workers can take months or even years.

When employers cannot quickly replace lost staff, the burden falls on the remaining workforce. Workers may be required to work extended shifts, mandatory overtime, or intensified production schedules to maintain operations. These conditions increase worker fatigue and place significant strain on the remaining workforce.22

C) The NPRM would increase workplace safety risks by disrupting experienced workforces

Staffing shortages and excessive overtime can also create significant safety risks. In many safety-sensitive workplaces, such as construction sites, manufacturing facilities, warehouses, and healthcare settings, the sudden loss of experienced workers can create immediate hazards for the remaining workforce. Short-staffing often forces employees to perform additional tasks or work at faster production speeds, increasing the likelihood of fatigue-related injuries and other workplace incidents. Efforts to rapidly replace experienced workers with new or inexperienced hires can further heighten safety risks for the entire workforce. Unionized workplaces have reported increased injury rates, higher stress levels, and exacerbated turnover and burnout following sudden staffing reductions tied to immigration policy changes.23

D) The NPRM would weaken bargaining power in unions and organizing capacity

Many asylum-seekers and other immigrant workers are union members, and their ability to work lawfully is critical to the stability of union bargaining units. By severely restricting asylum-seekers’ access to employment authorization, the NPRM would harm not only individual workers but also the unions that represent them by disrupting membership, weakening collective representation, and undermining unions’ capacity to maintain stable bargaining relationships with employers.

Labor history and modern labor-market research confirm the central role immigrant workers play in sectors where unions organize and represent workers.24 Immigrant workers are disproportionately employed in high-turnover, demanding industries where unions depend on workforce stability to sustain membership and bargaining strength.25 As immigrant employment has grown, so too has immigrants’ share of union membership, making them an increasingly important source of union participation and organizing.

By sharply curtailing asylum-seekers’ access to employment authorization, the NPRM would destabilize the workforce in industries where unions are building and maintaining collective representation. Denying or delaying work authorization would force many workers out of lawful employment or prevent workers from entering lawful employment relationships and joining unions, weakening existing bargaining units and reducing unions’ membership base. It would also disrupt organizing efforts by removing workers from the workforce before they can participate in union campaigns or collective bargaining.

The NPRM’s restrictions on asylum-seekers’ work authorization would significantly impair unions’ ability to represent and grow their membership.

The NPRM would push workers into the underground economy, increase labor and employment violations, weaken labor standards enforcement, and lower wages in numerous industries

The proposed rule would significantly restrict asylum-seekers’ ability to work legally while their asylum claims—often pending for years—are adjudicated, effectively forcing many asylum-seekers to support themselves and their families for extended periods of time without lawful employment.

The NPRM does not meaningfully analyze how individuals in this situation are expected to sustain themselves during those years, nor how effectively eliminating asylum-seekers’ access to employment authorization will impact the enforcement of labor standards, including wage and hour laws, labor laws, and workplace safety laws. In practice, without work authorization, many people will turn to informal or off-the-books employment arrangements in order to support themselves and their families. And we know from existing research that employees who lack work authorization are more than twice as likely to be victims of wage theft for minimum wage violations than U.S.-born citizens.26 Workers in these circumstances are significantly more vulnerable to exploitation. Employers may take advantage of workers’ immigration status to suppress wages, deny overtime pay, ignore workplace safety standards, or retaliate against workers who attempt to assert their rights.

When workers are pushed into informal employment, the resulting labor violations extend beyond those workers themselves—to all workers—regardless of immigration status or the country where they were born. Employers who exploit vulnerable workers not only depress wages and benefits for authorized workers in the same workplace, but they also gain a competitive advantage over law-abiding employers that comply with labor laws and collective bargaining agreements.27 In this way, the NPRM’s restriction of lawful employment authorization would distort workplace competition by rewarding employers that exploit vulnerable workers while disadvantaging those that comply with labor laws and collective bargaining agreements, thus lowering wages for all workers in the many industries where asylum-seekers are employed.

These consequences would reverberate across workplaces and industries. When employment moves into the informal economy, labor violations become harder to detect and enforce, enabling exploitative employers to undercut law-abiding competitors and driving down wages and working conditions for other workers. The NPRM does not meaningfully analyze these foreseeable effects. By failing to account for the predictable expansion of informal employment created by the proposed rule, the NPRM substantially understates its impact on labor standards and the broader labor market.

The NPRM disregards the significant reliance interests created by the existing system of asylum-based employment authorization

Under the Administrative Procedure Act (APA), agencies must consider the reliance interests that regulated parties have developed under existing policies before adopting regulatory changes that would disrupt those settled expectations.28 The NPRM fails to meaningfully account for the reliance interests that workers and unions have developed around the current system of asylum-based employment authorization.

For years, asylum-seekers and labor organizations have relied on a predictable regulatory framework under which individuals who meet the criteria for employment authorization can obtain a work permit within a defined timeframe. Workers make critical life decisions—including housing, transportation, and family support—based on the expectation that, if they satisfy the applicable requirements, they will be able to work lawfully while their asylum claims are pending. By introducing sweeping delays, additional eligibility barriers, and broad discretionary authority to deny applications, the proposed rule would upend these settled expectations and inject profound uncertainty into a system on which workers have long depended.

These reliance interests are particularly significant because many individuals the NPRM characterizes as “initial” asylum employment authorization applicants are not new entrants to the labor market. As described above, many have already been participating in the lawful workforce through programs such as TPS, humanitarian parole, deferred action, or other programs that allow for employment authorization. When those programs are terminated or curtailed, many workers eligible for asylum turn to the asylum system in order to maintain lawful employment authorization—relying on claims for asylum that are almost certainly valid given the circumstances that allowed them to qualify for temporary protections like TPS and parole—but which they did not assert sooner because of their eligibility for other programs which could be approved more quickly. Closing off this pathway for these current lawful employees in the U.S. labor market who also have valid asylum claims will eliminate the only remaining pathway for them to continue working lawfully in jobs they already hold. Their coworkers, employers, and entire workplaces depend on their continued participation in the labor force.

By imposing new eligibility barriers and expanding the circumstances under which renewal applications may be denied, along with creating unjustified lengthy bureaucratic pauses in adjudication, the proposed rule would significantly slow the renewal process and increase the likelihood that workers will lose lawful employment authorization while their applications remain pending. Given the scale of the existing asylum backlog, these changes threaten to create widespread gaps in work authorization for workers who have already been lawfully employed for years.

The NPRM would bring the asylum-based employment authorization system to a functional standstill. Workers who have relied on timely adjudication of work authorization applications would face prolonged periods without lawful employment authorization, while co-workers who depend on those workers would face sudden and unpredictable staffing disruptions. The NPRM does not meaningfully engage with these reliance interests or the systemic consequences of destabilizing an employment authorization framework on which hundreds of thousands of workers and employers have come to depend.

Because the proposed rule disregards these substantial reliance interests and fails to evaluate the disruptive consequences of overturning longstanding expectations about the availability and timing of employment authorization, the NPRM fails to consider an important aspect of the problem before the agency.

Conclusion and recommended action

The NPRM rests on a chain of flawed assumptions that do not reflect the realities of the modern U.S. labor market. It ignores the positive economic benefits and value of Employment Authorization Documents for asylum-seekers, and fails to estimate the many negative impacts that will result, harming not only asylum-seekers, but also U.S. employers and U.S.-born citizen workers. It mischaracterizes who will be impacted by the proposed rule, failing to recognize that many “initial” asylum applicants who would face the harshest aspects of the proposed rule are already embedded in the workforce. It disregards the substantial reliance interests that workers and employers have developed around a predictable system of asylum-based employment authorization. It ignores the predictable expansion of informal employment that will result from leaving asylum-seekers without lawful means of supporting themselves for years. And it assumes—without evidence—that employers will be able to easily replace workers who lose employment authorization.

In practice, the proposed rule would not streamline the administration of asylum-based employment authorization. Instead, it would destabilize workplaces, disrupt established workforces, weaken labor standards enforcement—leading to lower wages for workers in many industries—and impose significant costs on workers, employers, and the broader labor market.

For these reasons, the Economic Policy Institute urges DHS to withdraw the proposed rule.

Comment submitted by:

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

Endnotes

1. See Employment Authorization Reform for Asylum Applicants, 91 Fed. Reg. 8616, 8618–20 (Feb. 23, 2026).

2. See id. at 8618–19.

3. 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.

4. American Immigration Council, The Contributions of Temporary Protected Status Holders to the U.S. Economy (fact sheet), September 19, 2023.

5. Andrew Moriarty, “Temporary Protected Status (TPS): 5 Things to Know,” Policy Brief, FWD.US, February 29, 2024.

6. President’s Alliance on Higher Education and Immigration (President’s Alliance), Breakdown of Dreamer Populations—Both with and Without DACA, Updated May 23, 2024.

7. , Nicole Svajlenka and Trinh Q. Truong, “The Demographic and Economic Impacts of DACA Recipients: Fall 2021 Edition,” Center for American Progress, November 24, 2021.

8. Tom Wong, Ignacia Rodriguez Kmec, Diana Pliego, Karen Fierro Ruiz, Silva Mathema, Trinh Q. Truong, and Rosa Barrientos-Ferrer, 2023 Survey of DACA Recipients Highlights Economic Advancement, Continued Uncertainty amid Legal Limbo, Center for American Progress, March 25, 2024.

9. Pia Orrenius and Madeline Zavodny, “The Impact of Temporary Protected Status on Immigrants’ Labor Market Outcomes,” Federal Reserve Bank of Dallas Working Paper no. 1415, December 2014.

10. David Dyssegaard Kallick, “’Let Us Work’: The Wage Gain When Asylum Seekers Gain Work Authorization,” Immigration Research Initiative, September 7, 2023.

11. See for example, Ben Zipperer, Trump’s deportation agenda will destroy millions of jobs: Both immigrants and U.S.-born workers would suffer job losses, particularly in construction and child care, Economic Policy Institute, July 10, 2025.

12. See for example, Carl Davis, Marco Guzman, and Emma Sifre. 2024. Tax Payments by Undocumented Immigrants, Institute on Taxation and Economic Policy, July 30, 2024.

13. This rationale—the validity of which is beyond the scope of this comment—is repeated throughout the NPRM. See, e.g., Employment Authorization Reform for Asylum Applicants, Notice of Proposed Rulemaking, 91 Fed. Reg. 8616, 8620 (Feb. 23, 2026) (“[T]he affirmative asylum application backlog serves as a magnet pulling aliens into the U.S. illegally.”); id. at 8664 (same); id. at 8629 (“filing fraudulent, frivolous, or otherwise meritless asylum cases primarily to access employment authorization” is a “pull factor for illegal immigration,” such that the NPRM “should decrease the number of illegal border crossers”); id. at 8659 (proposing new eligibility bar on asylum-based work permits to “curb the pull-factor of employment authorization for those who have been present in the United States for more than 1 year”); id. at 8660 (“This rule will prioritize the safety and security of the American people by disincentivizing illegal migration and criminal conduct for [sic] aliens who would like to obtain employment authorization.”); id. at 8669 (“tethering (c)(8) EAD application acceptance to asylum processing times . . . will permanently eliminate the possibility that asylum backlogs may serve as a magnet attracting illegal immigration”).

14. See Temporary Protected Status (TPS): Fact Sheet, Forum (Feb. 4, 2026), https://forumtogether.org/article/temporary-protected-status-fact-sheet/ (listing recent TPS termination announcements, including TPS protections for Venezuela, Haiti, Nepal, Honduras, Nicaragua, Syria, Afghanistan, Cameroon, South Sudan, Burma, Ethiopia, Somalia, and Yemen); Dep’t of Homeland Sec., DHS Issues Notices of Termination for the CHNV Parole Program, Encourages Parolees to Self-Deport Immediately (June 12, 2025), https://www.dhs.gov/news/2025/06/12/dhs-issues-notices-termination-chnv-parole-program-encourages-parolees-self-deport; U.S. Citizenship & Immigr. Servs., Termination of Family Reunification Parole Processes for Colombians, Cubans, Ecuadorians, Guatemalans, Haitians, Hondurans, and Salvadorans, 90 Fed. Reg. 58032 (Dec. 15, 2025); Gregory Royal Pratt & Laura Rodríguez Presa, DACA delays lead to lost jobs, less stability and anxiety over potential deportation under Donald Trump, Chicago Tribune (Mar. 15, 2026), https://www.chicagotribune.com/2026/03/15/daca-delays-trump-immigration/.

15. See 91 Fed. Reg. at 8652-53, 8658 (acknowledging former TPS, parole, and DACA holders often apply for asylum).

16. 91 Fed. Reg. at 8620–21, 8664-65.

17. See id. (noting that lost compensation may be transferred to currently employed workers through additional hours or overtime).

18. See, e.g., fwd.us, People seeking asylum are contributing to the workforce (Jan. 31, 2026), https://www.fwd.us/news/people-seeking-asylum-are-contributing-to-the-workforce/.

19. See, e.g., Brief of Amici Curiae AFL-CIO and Ten Affiliated Labor Unions, Lesly Miot v. Trump, No. 26-5050 (D.C. Cir. Feb. 17, 2026) (“AFL-CIO and Affiliated Labor Unions Haiti TPS Brief”), at 16–17.

20. See, e.g., Julia Gelatt, “Trump Restrictions on Legal Immigration Could Sharply Reduce U.S. Population Growth,” Migration Policy Institute (April 2026), https://www.migrationpolicy.org/news/trump-legal-immigration-cuts-us-population-growth; and Chair Jerome Powell, “Transcript of Chair Powell’s Press Conference, March 18, 2026,” Federal Reserve, https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20260318.pdf (March 18, 2026).

21. See, e.g., Brief of Amici Curiae AFL-CIO and Affiliated Labor Unions, Svitlana Doe et al. v. Noem et al., No. 25-1384 (1st Cir. July 7, 2025) (“AFL-CIO and Affiliated Labor Unions Parole Brief”), at 13.

22. See, e.g., id. at 8–17 (discussing the chaos and harmful fallout that union members and employers experienced when DHS abruptly ended work authorization through the CHNV parole program); Andrea Hsu, Factories from GE to Kraft Heinz lose immigrant workers, stressing those who remain, NPR (Aug. 11, 2025), https://www.npr.org/2025/08/11/nx-s1-5496335/trump-immigration-workers-parole-tps.

23. See, e.g., AFL-CIO and Affiliated Labor Unions Haiti TPS Brief at 36 (noting that “[a]s a direct result of DHS’s actions [in terminating TPS for Haiti], nurses and other healthcare workers will feel pressure to work longer hours to attend to more patients, exacerbating the turnover and burnout that is endemic to the industry”).

24. See, e.g., Mae M. Ngai, Impossible Subjects: Illegal Aliens and the Making of Modern America (2004) (discussing historical links between immigrant labor and industrial unionization); Joint Econ. Comm. of the U.S. Cong., Unions Protect Employment and Raise Earnings, Including for Workers Who Are Immigrants (June 14, 2023) (finding unionization increases wages, benefits access, and workplace protections for immigrant workers); Andrea Hsu, Factories from GE to Kraft Heinz lose immigrant workers, stressing those who remain, NPR (Aug. 11, 2025), https://www.npr.org/2025/08/11/nx-s1-5496335/trump-immigration-workers-parole-tps.

25. See, e.g., Kevin Appleby, The Importance of Immigrant Labor to the US Economy, Center for Migration Studies (Sept. 2, 2024), https://cmsny.org/importance-of-immigrant-labor-to-us-economy/ (noting foreign-born workers were mainly employed in service occupations, construction, transportation, and material moving occupations); Dorothy Neufeld, Ranked: Union Membership by Industry in America, Visual Capitalist (Nov. 7, 2024), https://www.visualcapitalist.com/union-membership-by-industry-in-america/ (listing top industries with union membership based on Department of Labor statistics, including construction and transportation); Migration Policy Institute, Immigrants and Union Membership in the United States (2004) (demonstrating rising absolute numbers of immigrant workers in unions despite lower overall union density among foreign-born workers).

26. Annette Bernhardt et al., Broken Laws, Unprotected Workers: Violations of Employment and Labor Laws in America’s Cities, Center for Urban Economic Development, National Employment Law Project, and UCLA Institute for Research on Labor and Employment, 2009.

27. See, e.g., AFL-CIO and Affiliated Labor Unions Parole Brief at 15–16 (when the hotel industry is faced with labor shortages, employers often use temporary labor agencies to supply workers, which not only “undermin[e] the wages and working conditions” for U.S. citizen workers employed by the hotel “by paying substandard wages and benefits,” but also “often violate immigration law by hiring undocumented workers”).

28. See FCC v. Fox Television Studios, Inc., 556 U.S. 502, 515–16 (2009) (noting that an agency must sufficiently explain its decision when it departs from a previous position, which requires a “reasoned explanation” as to why it is “disregarding” any “factual findings . . . which underlay its prior policy” and “contradict” the factual findings underlying its new policy).

1. The proposed rule includes multiple reference numbers, which are listed here out of an abundance of caution: No. 2799-25; DHS Docket No. USCIS-2025-0370; DHS Docket No. 2025-0370; and RIN 1615-AC97.

February 26, 2026

Good afternoon, Chair Ricks, Vice Chair Camacho, and members of the committee,

My name is Nina Mast, and I’m a policy and economic analyst at the Economic Policy Institute (EPI). EPI is a nonprofit, nonpartisan think tank founded in 1986 to research the economic status of working America and propose public policies that protect and improve conditions for low- and middle-wage workers.

I’m here today to testify in support of HB 1054, a bill to strengthen Colorado workers’ right to a safe workplace. HB 1054 represents an opportunity for Colorado to continue showing leadership in efforts to protect all workers—both adults and minors—from preventable workplace injuries or fatalities.

As a national expert on state labor standards—including state standards to prevent young workers from exposure to hazardous occupations—I have had the opportunity to work on many state-level efforts to improve state workplace laws—including in Colorado. I regularly encourage policymakers to look to Colorado as a leader in making crucial and innovative updates to its standards both through legislation and administrative rulemaking. HB 1054 is an important next step for Colorado to take in this direction at a time when long-standing federal workplace health and safety standards are at risk.

Since the 1970 passage of the federal Occupational Safety and Health Act first established basic nationwide workplace health and safety standards, OSHA has saved tens of thousands of lives and prevented millions of injuries. Unfortunately, federal OSHA today faces numerous threats including diminished enforcement capacity, efforts to block important and long-overdue new worker protection standards, and—notably—efforts to weaken the statute’s general duty clause, which ensures foundational safety protections to all workers, regardless of the occupation or industry they work in. The Trump administration has proposed carving entire industries out of coverage under the “general duty” clause. This disastrous proposal could leave many workers without any federally guaranteed right to protection from known and preventable workplace hazards.

Given the inadequacies of current federal OSHA enforcement and the risk that existing minimum federal standards could soon be eroded further, it’s crucial for states to step in to protect their workers.

HB 1054 not only enshrines the long-standing intention of the general duty clause into state law, but it also goes further to ensure stronger protections from workplace illnesses and injuries for Colorado workers today. Specifically, the bill creates a general duty of employers to provide “reasonable and adequate” protections for all workers and comply with all standards adopted through administrative rulemaking. The bill also empowers the state attorney general and the Colorado Department of Labor and Employment (CDLE) to refer cases for investigation and recover penalties to be used for enforcement. And—importantly—it provides labor organizations and individuals harmed on the job with the option to file civil actions and pursue statutory damages in cases in which employers violate legal obligations to provide a safe workplace. These provisions will strengthen enforcement of the law, encourage reporting of unsafe working conditions by workers who report abuse at great personal risk, and more meaningfully deter violations.

As a national organization that convenes a network of state research and policy organizations, we have been closely tracking the implications of federal actions for workers at the state level. In the past year, OSHA has faced unprecedented threats to its enforcement capabilities, and aggressive immigration enforcement will make workers even less likely to feel safe reporting unsafe conditions at work. Because of these threats, state lawmakers have an opportunity and responsibility to resist the erosion of hard-won worker protections and take up the mantle of advancing workers’ right to a safe workplace. The sponsors of this bill have shown that they take this commitment seriously, and we urge all members of this committee and the Colorado General Assembly to do the same by supporting the passage of HB 1054.

Thank you.

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

December 1, 2025

Paul Buono
Chief, Business and Foreign Workers Division
Office of Policy and Strategy
U.S. Citizenship and Immigration Services
Department of Homeland Security
5900 Capital Gateway Drive
Camp Springs, MD 20746

Re: Removal of the Automatic Extension of Employment Authorization Documents, CIS No. 2826-25; DHS Docket No. USCIS-2025-0271, RIN 1615-AD05 (October 30, 2025)

Chief Buono:

The Economic Policy Institute (EPI) submits this comment strongly opposing the October 30, 2025 Interim Final Rule (IFR) eliminating automatic extensions of Employment Authorization Documents (EADs). The 2025 IFR unlawfully reverses DHS’s nearly decade-long policy choice of providing automatic EAD extensions; ignores ongoing adjudication delays and economic evidence; disregards reliance interests that DHS itself recognized less than a year ago; rejects feasible alternatives; and relies solely on an unsupported security rationale all while unlawfully bypassing notice-and-comment procedures as required by the Administrative Procedure Act (APA). The result is a rule that will strip employees of their workplace rights, destabilize the workforce, disrupt employer operations by creating gaps in employment authorization with unknown durations, and inflict severe harm on workers and their ability to provide for their families solely due to the government’s bureaucratic processing delays. We urge DHS to withdraw the IFR in full.

EPI fully supports and endorses the written comments and recommendations submitted by the Asylum Seeker Advocacy Project (ASAP), which includes a number of examples of the IFR’s impact on ASAP members.

About EPI and organizational interest

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 on temporary immigration protections and EADs, and on labor standards enforcement for both the low-wage and professional workforce. EPI has also provided expert testimony about the U.S. immigration system to both the U.S. Senate and House of Representatives, as well as state legislatures.

The worker rights of millions are protected by EADs

For workers who lack a permanent or more durable immigration status, obtaining a temporary EAD can mean having enforceable workplace rights that an individual would otherwise not have. While all workers have some labor and workplace rights under U.S. law—regardless of immigration status—enforcing them in practice becomes virtually impossible because of the threat of deportation, which prevents workers who lack an immigration status or an EAD from calling out lawbreaking employers and demanding that they comply with the law, or from reporting workplace violations to labor enforcement agencies. But having protection from deportation through temporary administrative immigration protections like parole, Temporary Protected Status, deferred action—accompanied by an EAD—means that, in practice, workers can report workplace violations to government officials without fear of retaliation that can lead to deportation. It also means that a worker with an EAD can be employed by just about any employer and change jobs or employers, unlike migrant workers employed with temporary visas who can only be employed by the sponsor of their visa.

Altogether, nearly 5.6 million people in the U.S. held a temporary but precarious immigration status in 2024, including over 2 million people who are asylum-seekers. (see Table 1 below).

Table 1

While these statuses and protections are only a band-aid for a flawed immigration system that is deeply in need of reform,1 they have been shown to protect millions of workers from some of the worst forms of employer lawbreaking. Employers also greatly benefit from workers having a protective status and a work permit because it allows them to lawfully employ millions of people who would otherwise not be eligible to work, leading to billions in economic contributions to the U.S. economy and generating demand that stimulates growth.

While comprehensive data are limited, we know, for example, that in 2017 the top five industries for TPS beneficiaries from El Salvador, Honduras, and Haiti were construction, restaurants and food services, landscaping, child day care services, and grocery stores.2 Employers in these industries and many others are in danger of losing their current workforce and will be prohibited from legally recruiting millions of other workers. Just one example is the GE Appliance Park in Louisville, Kentucky, a unionized plant where nearly 200 employees received a letter from the administration terminating their status and work authorization.3 Overnight, GE lost 200 employees.

DHS ignores the value and impact of work authorization on the workforce

In the IFR, DHS does not estimate and consider the value and impact that EADs have on the workforce and economy. There are examples of existing research showing the important economic contributions that hundreds of thousands of migrants with temporary protections and EADs are able to make thanks to being work-authorized. For example, when the TPS population was approximately 354,000 in 2021, the American Immigration Council estimated that “TPS holders contributed more than $2.2 billion in taxes, including almost $1 billion to state and local governments,” as well as “held $8 billion in spending power.”4 Another estimate by Moriarty found that TPS-eligible individuals “annually contribute some $31 billion in wages to the national GDP.”5

Research has also quantified some of the contributions made by persons who have qualified for Deferred Action for Childhood Arrivals (DACA). DACA was created by DHS in 2012, and recipients are eligible for protections from deportation and EADs that are valid for two years and renewable. More than 835,000 persons have benefitted from DACA, and more than 500,000 were enrolled as of 2024.6 Svajlenka and Truong found that DACA recipient households “pay $6.2 billion in federal taxes and $3.3 billion in state and local taxes each year,” and “after taxes, these households hold $25.3 billion in spending power,” and that DACA recipient families “own 68,000 homes, making $760 million in mortgage payments and $2.5 billion in rental payments annually.”7

When it comes to measuring the workplace impact and economic benefits of being issued an EAD for the workers themselves, there are limited examples, but three are worth citing here. One is an annual survey of DACA recipients that was conducted in 2024 for the ninth time. The most recent survey, conducted by Wong et al. and published by the Center for American Progress, showed that DACA has been an essential tool to improve the economic and educational outcomes of recipients.8 In terms of the impact that deferred action and an EAD have had on the employment of DACA recipients: 59.1% of respondents moved to a job with better pay; 47.3% moved to a job with better working conditions; 47.5% moved to a job that “better fits [their] education and training”; 49.6% moved to a job that “better fits [their] long-term career goals”; 57.3% moved to a job with health insurance or other benefits; and 19.6% of respondents obtained professional licenses.

Wong et al. also measured the impact of DACA and EADs on wages, finding that “[d]ata from the past nine years show that DACA has had a significant and positive effect on wages: Recipients’ average hourly wage more than doubled from $11.92 to $31.52 per hour—an increase of 164.4 percent—after receiving DACA.” These significant wage increases are no doubt a result of the labor and workplace rights and stability that DACA recipients gain from having an EAD.

Orrenius and Zavodny examined the wage and employment impact of TPS9—which allows those who are eligible to also be granted an EAD. They looked specifically at migrants from El Salvador, finding that having TPS increased employment rates, and that less-educated Salvadoran men who were employed earned 13% more if they had TPS. They note that “As a whole, the results suggest that less-educated Salvadoran men who receive TPS are able to move into better jobs and become more selective about the jobs they hold, increasing their earnings but also their job search and unemployment incidence.”

One other analysis that assesses the wage impact of being issued an EAD comes from Kallick, which looks specifically at asylum seekers in New York and nationwide.10 Relying on previous methodologies for measuring the impact of a lawful immigration status being granted to unauthorized immigrants, Kallick estimates that asylum seekers who are granted EADs increase their wages by 10%.

While the relative benefits of precarious and temporary immigration protections and EADs to migrant workers and the broader economy are clear, it is important to note here that the protections and EADs are only temporary and will end if renewals are not approved, or if renewals are delayed. Thus, DHS through this IFR will intentionally hurt the economy and eliminate the economic benefits for workers and employers that EADs create, a fact that the IFR does not grapple with or address.

An alternative to the path that DHS has chosen of terminating temporary statuses and EADs would be if Congress provided these workers with a permanent immigration status like a green card—and the rights that accompany it—allowing them to have full, equal, and permanent workplace rights and to exercise them in practice. That, in turn, would lead to even higher wages and improved labor standards for all workers,11 not just those who newly obtain green cards. However, the current administration so far has shown no appetite for supporting Congress in the creation of even one new green card.

But in the meantime, EADs through tools like TPS, parole, and DACA can mean the difference between having rights on the job or being extraordinarily vulnerable to the worst abuses by employers. While the current administration has claimed they want to help U.S. workers, actions like the mass detention and deportation of millions of workers and canceling protections like TPS and parole, reveal they are willing to degrade conditions and standards for all workers, as well as kill jobs and shrink the economy, in order to carry out their extreme immigration enforcement agenda.12

If the IFR is not withdrawn, millions of workers will be more easily exploited by their bosses and driven into the informal economy. That, in turn, will reduce their tax contributions that support the social safety net and lower their wages significantly13—ultimately hurting U.S workers in low-wage industries and the U.S. economy writ large by driving down demand for goods and services. It will also leave employers without millions of reliable employees in industries like construction, hospitality, childcare, agriculture, food processing and production, and more.

DHS ignores significant reliance interests

The 2025 IFR also disregards the significant reliance interests that DHS itself reaffirmed less than a year ago when it issued a permanent 540-day automatic extension, and which have existed since the agency’s issuance of the 2016 Final Rule. For nearly a decade, USCIS has automatically provided an extension of some length to some groups of workers with expiring EADs.14 In the 2024 Final Rule, DHS invited stakeholders to rely on a permanent 540-day extension and explicitly sought comment on making the extension permanent to provide regulatory certainty and workforce stability.15 Employers and workers reasonably structured hiring, staffing, payroll planning, and employee retention around that assurance.

Additionally, the only reliance interests DHS barely acknowledges—but does not meaningfully consider—are those of migrants and their employers. Yet, DHS entirely failed to consider the reliance interests of other stakeholders who rely on regulatory stability preventing immigrant communities from suffering government-caused lapses in employment authorization. These other stakeholders include state, city, and local governments; entire regional economies; educational institutions; healthcare providers; legal and social service providers; and the broader public, among others.

DHS cannot now abruptly withdraw the permanent 540-day automatic extension without addressing these significant reliance interests. Doing so violates core administrative law principles.16 In short, DHS invited workers, employers, families, schools, service providers, and communities to rely on regulatory stability, then pulled the rug out from under them without explanation. DHS failed to properly consider these significant reliance interests when issuing the 2025 IFR.

DHS fails to consider feasible alternatives as required by the APA

DHS fails to meaningfully consider feasible, less disruptive alternatives, in violation of the APA. 

Consecutive EADs. For instance, DHS claims that “proper planning” by renewal applicants could ensure no lapses in work authorization, yet this fails to recognize that DHS does not issue consecutive EADs. When individuals file well in advance of expiration, USCIS routinely issues overlapping validity periods rather than tacking the new approval onto the end of the existing authorization. As a result, early filers lose usable work-authorization time, forcing them into an ever-accelerating renewal cycle where they must apply earlier and earlier at significant personal and financial cost merely to maintain continuous work authorization. Filing fees, legal fees, time off work to prepare filings, and the emotional and economic strain of constant renewal planning make this approach untenable. If DHS truly believed early filing was the solution, it was required to consider—and explain why it rejected—the obvious alternative of issuing consecutive EAD validity periods so that applicants could file early without losing work authorization time and money. This straightforward fix would allow individuals to apply far in advance, provide USCIS a longer adjudication window, and preserve the full period of authorized employment. DHS’s failure even to address this option underscores the inadequacy of its “proper planning” rationale and confirms that the agency did not meaningfully consider reasonable, less disruptive alternatives.

Concurrent vetting. Nor does DHS explain why it cannot simply continue to conduct vetting during the renewal process and deny renewal of employment authorization if “potential hits of derogatory information” arise—a process it already uses.17 With or without the automatic extension, the individual remains in the United States; the only question is whether they are forced out of lawful employment while being vetted. In other words, DHS already has a system that protects security while letting people keep working, and it has not explained why it cannot keep using it.

Secure paper. DHS’s concern that its own receipt notices are printed on “non-secure” or “plain” paper ignores an obvious solution: printing the extension notices on secure paper.18 Rejecting straightforward, commonsense solutions in favor of a rule that causes sweeping economic harm and predictable worker displacement is the definition of arbitrary and capricious decision-making.

DHS’s use of an Interim Final Rule violates APA requirements

DHS made the 2025 IFR effective immediately, without providing the notice or opportunity to comment required by the APA. Thus the agency’s use of an interim final rule was unlawful.

First, DHS has not satisfied the “meticulous and demanding” standard for invoking the APA’s “good cause” exception.19 That narrow exception allows an agency to bypass notice and comment only where it “for good cause finds . . . that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.”20 While DHS claims that notice and comment would be impracticable and contrary to the public interest, it relies almost entirely on the unsupported security rationale discussed above, along with stating it is “self-evident” that more workers would “rush” to apply for EAD renewals before the rule took effect.21 Again, DHS has not provided evidence of any security risks caused by automatic extensions.22 DHS therefore cannot satisfy the good cause exception to avoid notice-and-comment rulemaking.

Second, the 2025 IFR improperly relies on the exception for normal rulemaking involving the “foreign affairs function of the United States.”23 This exception, too, comes with a “high bar.”24 In particular, courts have warned against “[t]he dangers of an expansive reading of the foreign affairs exception” in the immigration context, where inevitable “incidental foreign affairs effects” would “eliminate[] public participation in this entire area of administrative law.”25 DHS cannot meet that high bar here, as the potential effects on international relations that it puts forward are all speculative, tenuous, or otherwise reliant on unsupported claims of security risks.26

Conclusion and recommended action

For all of these reasons, DHS should withdraw the 2025 IFR in its entirety and reinstate the permanent 540-day automatic extension. The IFR contradicts DHS’s statutory mandate, its own 2016 and 2024 Final Rules, and the factual and economic record. It rests on speculation, ignores constitutional concerns, and will cause predictable, major harm to worker rights and workers themselves, as well as families, employers, and the broader economy—all due to bureaucratic processing delays caused by the government alone.

Comment submitted by:

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

Endnotes

1. 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.

2. Robert Warren and Donald Kerwin, A Statistical and Demographic Profile of the US Temporary Protected Status Populations from El Salvador, Honduras, and Haiti, Center for Migration Studies, 2017

3. Keely Doll, “Letters warn nearly 200 GE Appliances workers to leave U.S. as immigration program ends,” Louisville Courier Journal, April 4, 2025.

4. American Immigration Council, The Contributions of Temporary Protected Status Holders to the U.S. Economy (fact sheet), September 19, 2023.

5. Andrew Moriarty, “Temporary Protected Status (TPS): 5 Things to Know,” Policy Brief, FWD.US, February 29, 2024.

6. President’s Alliance on Higher Education and Immigration (President’s Alliance), Breakdown of Dreamer Populations—Both with and Without DACA, Updated May 23, 2024.

7. , Nicole Svajlenka and Trinh Q. Truong, “The Demographic and Economic Impacts of DACA Recipients: Fall 2021 Edition,” Center for American Progress, November 24, 2021.

8. Tom Wong, Ignacia Rodriguez Kmec, Diana Pliego, Karen Fierro Ruiz, Silva Mathema, Trinh Q. Truong, and Rosa Barrientos-Ferrer, 2023 Survey of DACA Recipients Highlights Economic Advancement, Continued Uncertainty amid Legal Limbo, Center for American Progress, March 25, 2024.

9. Pia Orrenius and Madeline Zavodny, “The Impact of Temporary Protected Status on Immigrants’ Labor Market Outcomes,” Federal Reserve Bank of Dallas Working Paper no. 1415, December 2014.

10. David Dyssegaard Kallick, “’Let Us Work’: The Wage Gain When Asylum Seekers Gain Work Authorization,” Immigration Research Initiative, September 7, 2023.

11. 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.

12. See for example, Ben Zipperer, Trump’s deportation agenda will destroy millions of jobs: Both immigrants and U.S.-born workers would suffer job losses, particularly in construction and child care, Economic Policy Institute, July 10, 2025.

13. See for example, Carl Davis, Marco Guzman, and Emma Sifre. 2024. Tax Payments by Undocumented Immigrants, Institute on Taxation and Economic Policy, July 30, 2024.

14. See 2016 Final Rule, 81 Fed. Reg. at 82,455. 

15. 2024 Final Rule, 89 Fed. Reg. at 101,230. 

16. Dep’t of Homeland Sec. v. Regents of the Univ. of Cal., 591 U.S. 1, 30 (2020) (agency must meaningfully consider reliance interests when abandoning prior policy).

17. 2025 IFR, 90 Fed. Reg. at 48,804 (“If the application is denied, the automatically extended employment authorization and/or EAD generally is terminated on the day of the denial.”); id. at 48,806, 48,808–10 (citing concerns about “potential hits of derogatory information”).

18. See 2025 IFR, 90 Fed. Reg. at 48,809–10, 48,817 (concerns about automatic extension being memorialized on “non-secure” paper).

19. Sorenson Commc’ns Inc. v. FCC, 755 F.3d 702, 706 (D.C. Cir. 2014) (citation omitted). 

20. 5 U.S.C. § 553(b)(3)(B).

21. 2025 IFR, 90 Fed. Reg. at 48,813.  

22. Cap. Area Immigrants’ Rts. Coal. v. Trump, 471 F. Supp. 3d 25, 46 (D.D.C. 2020) (good cause exception not satisfied where agencies only provided a single example of potential adverse consequences and “offer[ed] no other data or information that persuasively supports their prediction of a surge” in border crossings before rule took effect). 

23. 5 U.S.C. § 553(a)(1). 

24. Cap. Area Immigrants’ Rts. Coal. v. Trump, 471 F. Supp. 3d 25, 55 (D.D.C. 2020). 

25. City of New York v. Permanent Mission of India to United Nations, 618 F.3d 172, 202 (2d Cir. 2010). 

26. 2025 IFR, 90 Fed. Reg. at 48,814. 

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 cites14 —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 program29—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 202454 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.