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Federal Register / Vol. 86, No. 228 / Wednesday, December 1, 2021 / Proposed Rules
IRFA when proposing, and a final regulatory flexibility analysis FRFA
when issuing, regulations that will have a significant economic impact on a substantial number of small entities.
The Department certifies that the proposed rule does not have a significant economic impact on a substantial number of small entities.
The Department presents the basis for this conclusion in the analysis below.
Definition of Small Entity The RFA defines a small entity as a 1 small not-for-profit organization, 2 small governmental jurisdiction, or 3 small business. The Department used the entity size standards defined by the Small Business Administration SBA, in effect as of August 19, 2019, to classify entities as small.102 SBA
establishes separate standards for individual 6-digit NAICS industry codes, and standard cutoffs are typically based on either the average number of employees, or the average annual receipts. For example, small businesses are generally defined as having fewer than 500, 1,000, or 1,250 employees in
manufacturing industries and less than $7.5 million in average annual receipts for nonmanufacturing industries.
However, some exceptions do exist, the most notable being that depository institutions including credit unions, commercial banks, and noncommercial banks are classified by total assets small defined as less than $550 million in assets. Small governmental jurisdictions are another noteworthy exception. They are defined as the governments of cities, counties, towns, townships, villages, school districts, or special districts with populations of less than 50,000 people.103
Number of Small Entities The Department collected employment and annual revenue data from the business information provider Data Axle and merged those data into the H2A disclosure data for FY 2020
and FY 2021. This process allowed the Department to identify the number and type of small entities in the H2A
disclosure data as well as their annual revenues. The Department determined the number of unique employers in the
FY 2020 and FY 2021 certification data based on the employer name and city.
The Department identified 9,927 unique employers excluding labor contractors.
Of those 9,927 employers, the Department was able to obtain data matches of revenue and employees for 2,615 H2A employers in the FY 2020
and FY 2021 certification data. Of those 2,615 employers, the Department determined that 2,105 were small 80.5
percent.104 These unique small entities had an average of 11 employees and average annual revenue of approximately $3.62 million. Of these small unique entities, 2,085 of them had revenue data available from Data Axle.
The Departments analysis of the impact of this proposed rule on small entities is based on the number of small unique entities 2,085 with revenue data.
To provide clarity on the agricultural industries impacted by this regulation, Exhibit 10 shows the number of unique H2A small entities employers with certifications in the FY 2020 and FY
2021 certification data within each NAICS code at the 6-digit level.

EXHIBIT 10NUMBER OF H2A SMALL EMPLOYERS BY NAICS CODE
6-Digit NAICS
111998
444220
561730
445230
424480
111339
112990
424930
424910
484230

All Other Miscellaneous Crop Farming
Nursery, Garden Center, and Farm Supply Stores
Landscaping Services
Fruit and Vegetable Markets
Fresh Fruit and Vegetable Merchant Wholesalers
Other Noncitrus Fruit Farming
All Other Animal Production
Flower, Nursery Stock, and Florists Supplies Merchant Wholesalers
Farm Supplies Merchant Wholesalers
Specialized Freight except Used Goods Trucking, Long-Distance

611
162
134
127
84
78
57
51
41
39

Percent 31
8 7
6 4
4 3
3 2
2

The Department has estimated the incremental costs for small entities from the baseline i.e., the 2010 Final Rule:
Temporary Agricultural Employment of H2A Aliens in the United States; TEGL
1706, Change 1; TEGL 3310, and TEGL 1606, Change 1 to this proposed rule. We estimated the costs of a time to read and review the proposed rule and b wage costs. The estimates included in this analysis are consistent with those presented in the E.O. 12866
section.
The Department estimates that small entities not classified as H2ALCs,
1,946 unique small entities,105 would incur a one-time cost of $53.08 to familiarize themselves with the rule.106
In addition to the cost of rule familiarization above, each small entity will have an increase in the wage costs due to the revisions to the wage structure. To estimate the wage impact for each small entity we followed the methodology presented in the E.O.
12866 section. For each certification of a small entity the Department calculated total wage impacts of the proposed rule in CY 2020 and CY 2021. The Department estimates the total annualized cost at a discount rate of 7
percent is $4,347 on average.

The Department determined the proportion of each small entitys total revenue that would be impacted by the costs of the proposed rule to determine if the proposed rule would have a significant and substantial impact on small entities. The cost impacts included estimated first year costs and the wage impact introduced by the proposed rule. The Department used a total cost estimate of 3 percent of revenue as the threshold for a significant individual impact and set a total of 15 percent of small entities incurring a significant impact as the threshold for a substantial impact on small entities.

102 SBA, Table of Small Business Size Standards Matched to North American Industry Classification System Codes Aug. 2019, https www.sba.gov/
document/support--table-size-standards.

103 See https advocacy.sba.gov/resources/theregulatory-flexibility-act for details.
104 SBA, Table of Small Business Size Standards Matched to North American Industry Classification
System Codes Aug. 2019, https www.sba.gov/
document/support--table-size-standards.
105 The 1,946 unique small entities exclude all labor contractors.
106 $33.38 + $33.380.46 + $33.380.17 = $53.08.

Projected Impacts to Affected Small Entities
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