The Expansion of H-2A into a Labor-Trafficking Lucrative Economy in Washington State by WAFLA (Part II of a III part series)

Farm Labor in Washington State

Figure 1: WSDA US Census of Agriculture 2012 Map

            According to the USDA’s US Census of Agriculture in 2012 there are 37,249 farms in Washington State. The overall value of the food and agriculture industry was $51 billion. At the time this was 12% of Washington State’s economy. The wellbeing of this industry is important to farmers and farmworkers alike, it is their collective contribution to the economic wellbeing of Washington State.

In 2012, Washington State Farms employed 96,200 farmworkers. 54,100 of those jobs were seasonal, that number peaked at 90,800 in June. 42,328 of those jobs were held by farmworkers involved in an informal harvest labor market. 13,600 of those jobs were out-sourced to the H-2A visa program. Only 1.6% ($811,500,000) of Washington’s vibrant farming economy goes to farm workers.

Figure 2: Value of WA Farm Labor in 2012, USDA

            According to Farmworker Justice, the average annual income or prevailing wage for a farmworker in the United States is $15,000-$17,499. In order to protect domestic farmworkers from displacement and to prevent the agriculture industry from misusing the H-2A visa program, the 1964 immigration law that established the current H-2A visa program set into place a series of regulations that were meant to discourage the use of the guest worker program for illegitimate reasons based on lessons learned from the Bracero program that was discontinued that same year. These deterrents included requiring that the certifying agency confirm that there is a labor shortage prior to the certification of an application. The program also requires that the employer provide housing and transportation to any certified worker, and to compensate those workers at an Adverse Effect Wage Rate (AEWR). According to a Farmworker Justice publication, “the purpose of the Adverse Effect Wage Rate (AEWR) is to overcome and prevent depression in prevailing wages” (Farmworker Justice, AEWR Fact Sheet). According to the Employment Security Department (ESD) in Washington State, the current Adverse-Effect Wage Rate (AEWR) places the potential earnings of H-2A workers at $22,731, $5,232 more than the upper end of the average prevailing wage.

            Let’s pretend that an H-2A worker in the tree fruit industry was able to earn the full $22,731 AEWR that was reported by the ESD for 2015. Let’s deduct their meals, that’s about $1,810.50 per worker, then deducting about $100 per worker for protective equipment brings their total take home pay to approximately $20,820.50 per worker, or $3,321 more than the average prevailing wage of a domestic farmworker. If these H-2A farmworkers didn’t have any other deductions from their paycheck, such as medical care or loans, that’s just above poverty level for a family of 3 ($20,160 in 2016).

            There is mounting evidence that work that is paid by piece-rate rather than by an hourly AEWR allows growers to systematically underpay H-2A farmworkers. Therefore, that small buffer of about $3,321 that H-2A workers are supposed to make above the prevailing wage is quickly exhausted through this loophole. There is current unresolved litigation that is seeking damages to H-2A farmworkers on the precedent that the piece rate wage schedules were the same that were ruled to be “unfair and onerous” by a DOL Administrative Judge in 2014 (Demetrio v. Sakuma Bros., 183 Wash.2d 649 2015). According to testimony by the attorney’s at Columbia Legal Services, “Protections under the H2A program are nearly impossible to enforce because workers have no private right to go to court under those protections and agency enforcement is ineffective,” they continue that H2A workers are made vulnerable in because, “Their visa ties them to a single employer; thus, workers can’t “vote with their feet” and look for a job at a different farm if conditions are bad,” that “Employers have absolute control over which workers get job offers from foreign recruiters – if the employer does not put a worker on a “preferred” list, they will not get a job. This works as a blacklist for workers who are perceived as causing trouble because they raise concerns,” and that H-2A farmworkers are isolated and segregated from society in multiple ways including geography, lack of personal transportation, and limited knowledge of any services that might be available in the vicinity. By contrast, organizations such as WAFLA are also engaged in litigation that is seeking to reduce the AEWR safeguard provision required for H-2A certification to lower standards from previous years. Farmworker Justice reports that,”In 2009, the Bush Administration changed the regulations governing the H-2A program, including the methodology for determining the AEWR, which resulted in an average of $1 to $2 decrease in hourly wages for H-2A workers” (Farmworker Justice, AEWR Fact Sheet 2012). This safeguard was reinstated by then Secretary of Labor, Hilda Solis in 2010. Within the context of these struggles over the wage, we can understand the rise in the use of H-2A labor is directly tied towards an attempt to replace temporary domestic labor with temporary guest workers based on a false premise that H-2A workers are more easily controlled and coerced.

Impacted communities should lead the work when it comes to liberation. We are committed to building farmworker leadership where there is none, even if it takes a long time, rather than having non-farmworkers speak on behalf of farmworkers and set the agenda for farmworkers. In Washington state, when this happens it limits the capacity of farmworker led organizations to emerge (Holmes 2013; Peña et al. 2017). The farmworkers that comprise Familias Unidas por la Justicia for example, held regular work stoppages before they were unionized, in 2009 there was a request for Community to Community Development to witness. At that conjuncture Rosalinda Guillen asked if they were planning to lead the work, they said no, rather than speaking on their behalf we went our separate ways. In 2013 when the farmworker leadership were asked the same question they decided that they were willing to lead themselves and that is how they became their own union. In much the same way, H-2A farmworkers are seen as human beings first and second as fellow workers. It is the workers, not Familias Unidas por la Justicia that seeks out that relationship, particularly when there is a worker grievance, and in the tradition of the above, this global class of workers is always asked if they are willing to lead themselves, and it is only when they answer in the affirmative that class bonds are forged across traditional divisions of labor.

 

The Rise of H-2A in Washington State

Farm Labor Contracting has become a lucrative business, so much so that Washington State currently holds 224 licenses this year through Labor & Industries. The surety bond for Farm Labor Contractors in 2019 are worth $3.86 Million. Licensed Labor Contractors in Washington State must pay Labor & Industries a surety bond between $5,000 to $100,000 depending on how many laborers they expect to mobilize that year as a bond it is returned to the corporation after completion of the license.

Figure 3: WAFLA Employed v. WA H2A Certifications 2011-2018

 

In the Western United States, the use of H-2A workers has exponentially increased in Washington State by 1000% in the last decade according to ESD projections. WAFLA, a 501.c.6 that was formed with the support of grower lobbies for the purpose of supporting members to gain access to this highly regulated class of worker is the central driver of this dramatic increase (see table 1). Their labor contracting affiliate in Mexico, CSI Labor Services, although a labor contractor, does not hold a license or bond with Washington State to recruit H-2A guest workers for WAFLA, this is a loophole that can be closed.

Year WA H-2A Certifications USA H-2A Certifications
2010 3,014 79,011
2011 3,194 77,246
2012 4,443 85,248
2013 (WAFLA = 4,541)    6,251 98,248
2014 (WAFLA = 6,161)    9,077 116,689
2015 (WAFLA = 7,895)  11,844 139,832
2016 (WAFLA = 9,455)  13,689 165,741
2017 (WAFLA = 6,818)  15,611 160,084
2018 *(WAFLA = 13,848) 20,862 **193,603
 

Table 1: Office of Farm Labor Certification (USDOL) FY 2010-2017 performance data

*As Reported by Capital Press, February 26, 2019. **As reported by USDOL 3 QTR YTD 2018

 

 

WAFLA charges growers for recruiting, administrating, transporting, housing H-2A workers. WAFLA is registered as non-profit corporation, therefore it has special federal tax exemptions for its business. By extension, it also does not have to provide a bonding fee to Labor & Industries as they are the Employer of Record, often ranking third in the nation. This status has allowed WAFLA to report annual sales of $8,191,969 it operates with a staff of at 22 employees to administer H-2A worker certifications.

Let’s provide a concrete example, in Washington State, a grower that requires 600 workers to harvest apples, can pay organizations like WAFLA upwards of $844,500 per season to contract H-2A workers. This calculation is based on the WAFLA Gold Package that is heavily marketed to growers. The Gold Package consists of a $4,500 flat fee and $1,200 per certified worker for transportation, visa and lodging as well as a $200 administration fee per certification.

By contrast, according to the federal register, “The Application for Temporary Employment Certification fee for each employer receiving a temporary agricultural labor certification is $100 plus $10 for each H-2A worker certified under the Application for Temporary Employment Certification, provided that the fee to an employer for each temporary agricultural labor certification received will be no greater than $1,000″ (Electronic Code of Federal Regulations, Title 20, Chapter V, §655.163). For a farm certifying 600 workers without WAFLA, that would be only $1,000 in fees, however they would be independently responsible for the recruitment, transportation, and housing of those workers.

Growers have been convinced through aggressive marketing and coercion via doctored economic reports prepared for WAFLA (with a disclosure that the estimates are not accurate enough to be used for legislative decisions) that assures farmers that they are guaranteed a profit if they use WAFLA, and are lobbied toward the exclusive use of their Gold Package rather than going about the business of contracting H-2A workers independently which would require licensing and bonding, building housing, and administrating the workers.[1]If growers attempt to host on their own guest workers, they can pay close to $18,050 per bus to transport the workers (for 600 workers that’s at least 7 buses = $129,500) and be responsible for housing that can cost upwards of $3.5 million to construct.

WAFLA, a vertically integrated company, owns transportation and farmworker housing in Washington State. Their subsidiary corporation, Ringold Seasonal Farmworker Housing, for example can house 96 farmworkers at a time at $7 a night, in Eastern WA the apple harvest lasts about 150 days, so that’s about $100,800 per year if it’s filled to capacity that comes out of that fee that is charged to growers that use WAFLA.

Other hidden costs include providing H-2A workers with healthcare, protective equipment and meals these are not required by the federal program but require further investment from the grower. Most employers charge H-2A workers $12.07 a day that is deducted from their paycheck, in a closed shop for 600 workers this is another $171,997.50, meaning that the cost to the growers must be beyond this to feed so many people. As many agricultural jobs are located in remote rural areas, farmworkers that require medical care may have to pay exorbitant amounts for their care, further providing protective equipment to large amounts of workers can come at great cost to the workers and to the supplier. A recent example from King Fuji Ranch, a WAFLA affiliated grower, were boots that cost $12 that were sold to guest workers at $60 each. A grower who desires to use H-2A in Washington State may not feel that they have any option but to use WAFLA, this is why this vertically integrated industry is in dire need of regulation and oversight.

The original intent of the H-2A visa was to serve as an emergency avenue for growers to access season farm labor in the event of a legitimate farm labor shortage. The H-2A visa was a legislative compromise with industrial grower lobbies after the original bracero guest worker program was discontinued. The bracero guest worker program was discontinued on December 31, 1964 because farmworker advocates were able to prove to that it “(1) depressed the wages of the American Farm Workers, (2) obstructed the formation of farm worker unions, and (3) encouraged American businessmen to lobby for the extension of the bracero program to [other] industr[ies] as well (Craig 1971; Galarza 1964)” (Menchaca 1995).

These three points from 1964 have re-emerged here in Washington State. (1) The agricultural industry currently depresses wages via the abuse of the piece-rate system in lieu of a minimum wage. WAFLA is currently pursuing litigation meant to further depress the wages of H-2A farmworkers, this would negatively impact domestic farmworkers who would be displaced by H-2A farmworkers who can work for lower wages because their transportation, housing and meals are covered otherwise, (2) the retaliation, black listing, captivity, and neglect that H-2A farmworkers currently experience is the same activity that obstructed the formation of farm worker unions in 1964, and (3) Scott Dilley, a lobbyist for the Farm Bureau, testified on a Washington House of Representative’s Labor and Workforce Development Committee session that, “It would be nice if we could extend some of those…preferences to other businesses as well.” (Madrigal 2017, 259).

[1]ECONorthwest, “Economic Contributions of Washington H-2A Workers,” May 2017, Prepared for WAFLA.

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