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Federal Register / Vol. 86, No. 228 / Wednesday, December 1, 2021 / Proposed Rules EXHIBIT 4COMPENSATION RATES
2020 dollars Position
Grade level
Base hourly wage rate
Loaded wage factor
Overhead costs
Hourly compensation rate
a
b
c
d=a+b+c
$5.67 $33.38 0.17

$53.08

Private Sector Employees HR Specialist

N/A

3. Subject-by-Subject Analysis The Departments analysis below covers the rule familiarization costs, unquantifiable costs, transfers, and qualitative benefits of the proposed rule.
In accordance with Circular A4, the Department considers transfers as payments from one group to another that do not affect total resources available to society. This proposed rule includes the cost of rule familiarization and transfers associated with the AEWR
wage structure from the proposed rule.
The Department also described efficiency impacts, payroll and other transition costs, and the distributional impacts that could result from the proposed rule.
Costs The following section describes the costs of the proposed rule.

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Quantifiable Costs Rule Familiarization When the proposed rule takes effect, H2A employers will need to familiarize themselves with the new regulations. Consequently, this will impose a one-time cost in the first year.
To estimate the first-year cost of rule familiarization, the Department applied the growth rate of H2A applications 3.1 percent to the average number of annual unique H2A applicants from FY2016 to FY2020 8,204 to determine the number of unique recurring H2A
applicants impacted in the first year the rule is in effect. The number of unique H2A applicants 8,459 was multiplied by the estimated amount of time required to review the rule 1 hour.82
This number was then multiplied by the hourly compensation rate of Human Resources Specialists $53.08 per hour.
This calculation results in a one-time undiscounted cost of $448,973 in the first year after the proposed rule takes effect. In each subsequent year new unique employers 2,199 requesting 82 This estimate reflects the nature of the proposed rule. As a rulemaking to amend parts of an existing regulation, rather than to create a new rule, the 1-hour estimate assumes a high number of readers familiar with the existing regulation.

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$33.38

$14.02 $33.38 0.42

H2A certifications will need to review the rule. The growth rate of H2A
applications 3.1 percent was applied to the number of new unique employer to determine the annual number of new unique H2A applicants impacted in the remaining years of the analysis. This results in an average annual undiscounted cost of $140,589 in years 210 of the analysis. The one-time and continuing costs yield a total average annual undiscounted cost of $171,428.
The annualized cost over the 10-year period is $52,633,180,190 and $63,924,192,560 at discount rates of 3
and 7 percent, respectively.
Unquantifiable Costs a. Efficiency Impacts The proposed wage methodology is designed to achieve the statutes twin goals of providing employers with an adequate legal supply of agricultural labor and protecting the wages and working conditions of workers in the United States similarly employed. The AEWR provides a floor below which wages cannot be negotiated, thereby strengthening the ability of this particularly vulnerable labor force to negotiate over wages with growers who are in a stronger economic and financial position in contractual negotiations for employment. In the case of perfect competition, if the proposed rule results in a wage floor above competitive market wages, it will produce some deadweight loss DWL. In the case of market power, if the proposed rule reduces a wage floor below competitive market wages, it may produce some DWL if employers exercise market power, but otherwise will not. Setting minimum wage rates has implications on economic efficiency that are complicated and difficult to assess because, in certain combinations of SOC
codes and geographies, the gross average hourly wage rates used to determine the AEWRs annually for each State under this proposed rule may act as a wage floor that is above competitive market equilibrium wages for certain job opportunities whereas in others imperfect competition may suppress
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domestic labor markets at quantities below the competitive market equilibrium.
These two impacts are dependent on local labor market conditions, the nature of the agricultural work to be performed and wage payment structure i.e., fixed hourly pay versus combination of hourly and piece-rate pay, the relation of the AEWR to the regional OEWS
wage, as well as the shape and components i.e., makeup of nonimmigrant foreign and domestic workers of the combined temporary agricultural employment labor supply curve in the local or regional labor market.
The Department is unable to quantify these efficiency impacts because it does not have data on all local labor market conditions for all occupations, data on foreign labor supply curves, and how these interact with employer demand.
The Department seeks public comment on the DWL or other labor market inefficiencies resulting from the proposed rule. The efficiency impact of the proposed rule is limited only to the 2 percent of H2A workers whose wages the proposed rule will affect, while there would be no change to the DWL
for the other 98 percent of H2A
workers.83 Therefore, the DWL resulting from the proposed rule is likely very small. Because the market equilibrium wages for construction workers, supervisors/managers of farmworkers, and logging equipment operators are above current baseline AEWRs, the proposed rule may create some efficiency gain or decrease in the DWL
for jobs within the 2 percent when it raises the wage floor from the current baseline AEWRs toward competitive equilibrium wages if employers currently exercise market power to prevent wages from being bid up to competitive equilibrium rates. On the 83 Under this proposed rule the Department would use the AEWR methodology set forth in the 2010 Final Rule i.e., setting the annual AEWRs using the gross average hourly wage rate for field and livestock workers combined for the occupations 452041, 452091, 452092, 452093, 537064, 452099 which comprise 98 percent of H2A workers.

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