District Court Rules Against Labor Department's Late 2025 Adverse Effect Wage Rate Changes
Published Friday, August 28, 2026
On Wednesday, a U.S. district court in California effectively ruled against the U.S. Department of Labor’s interim final rule from late 2025 on changes to the Adverse Effect Wage Rate, or AEWR. The interim rule effectively reduced the Adverse Effect Wage Rate across much of the U.S. In California, it reduced the rate from 2025’s $19.97 per hour base rate to the state’s minimum wage of $16.90 per hour. The United Farm Workers sued the department over the rule and has claimed an initial major victory to halt the rule. The court found the rule unlawful on multiple grounds and sent it back to the Labor Department to quickly address several legal questions. Depending on the court’s final determination, it is possible that employers might be on the hook for backpay. This could prove exceedingly costly to agricultural employers nationwide given the substantial reduction in AEWR costs for many. It remains to be seen whether the case will be appealed, but California Farm Bureau will continue to update members as this develops.
Staff contact: Bryan Little, blittle@cfbf.com.
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