California will require agricultural employers to pay nonresident "authorized" workers at least $19.75 an hour starting Jan. 1, 2027, under a bill Gov. Gavin Newsom signed last week that grower groups say will raise costs and accelerate out-of-state production shifts.

What does AB 2646 do?

AB 2646, by Asm. Maggy Krell, D-Sacramento, sets the wage floor for H-2A workers and employees in similar jobs in the same county. It applies only to nonresident "authorized" agricultural workers. The law indexes the wage to the cost-of-living adjustment used for Social Security benefits, with annual updates each January starting in 2028.

Why did California pass the law?

The United Farm Workers-sponsored bill responds to the Trump administration's move last fall to change how it calculates the Adverse Effect Wage Rate. That change cut California's H-2A hourly wage from $19.97 to $16.50, the statewide minimum.

The UFW argues the law "safeguards vulnerable California farmworkers against deepening wage depression in the middle of escalating prices for food and basic necessities," a state Senate bill analysis states.

How are grower groups responding?

Opposition ran heavy. Groups opposing the bill include the California Farm Bureau, American Pistachio Growers, the California Fresh Fruit Association, the California Cattlemen's Association, the California Association of Winegrape Growers, the California Strawberry Commission, and Western Growers.

California Citrus Mutual director of government affairs Jacob Villagomez said citrus growers depend on a stable workforce, but the law arrives as input costs climb across every part of operations.

"Every additional cost makes it harder to keep producing fresh citrus here in California, supporting farm jobs and sustaining the rural communities that depend on agriculture," Villagomez said in a news release.

Western Growers President and CEO Dave Puglia was more pointed. He said grocery chains already route purchases to states and countries with lower production costs, and AB 2646 deepens that pressure.

"California families are burdened by the nation's highest cost of living and yet we now have another new, economically stupid mandate imposed on the state's farmers in the form of AB 2646," Puglia said in a news release.

He predicted only larger family operations can pass the cost to retailers, and most smaller farms cannot absorb or pass along the increase. The groups estimate 98% of California farms are family-owned and argue the law threatens the state's role in produce markets.

How significant is the California produce footprint?

California hosts roughly 400,000 farmworkers and produces more than 400 commodities, including nearly half of U.S. vegetables and more than three-quarters of U.S. fruits and nuts, the bill analysis shows. A 2015-19 USDA study put mean and median personal income for California farmworkers at $20,000 to $24,999.

What does the pending federal ruling change?

AB 2646's signing follows an August ruling by U.S. District Judge Kirk Sherriff that the federal AEWR rule was unlawful. The rule remains temporarily in force until Dec. 30, the deadline Sherriff set for the Department of Labor to install a replacement wage structure.

UFW President Teresa Romero welcomed the ruling and pressed for swift action.

"This decision recognizes the important and essential work of the men and women who put food on our tables and that farmworkers should get paid fairly," Romero said in a statement.

Alexandra Hill, a University of California, Berkeley assistant professor of cooperative extension, said the state law's bite depends on the federal outcome. If courts reinstate DOL's AEWR methodology, the federal floor would exceed California's $19.75, and the state law would be effectively moot. If the federal floor settles below $19.75, AB 2646 becomes the operative floor.

"The practical impact of the state law would depend heavily on where the federal wage lands relative to the state's $19.75 threshold," Hill told Agri-Pulse by email.

What should employers do now?

Sacramento employment attorneys Rebecca Hause-Schultz and Alden Parker recommend four steps for agricultural employers:

• Consult counsel to confirm whether the law applies and which employees it covers
• Revise wage policies to meet the new schedule
• Notify covered workers of the wage schedule and post required notices
• Track the 2028 cost-of-living bump and any legal challenges to the law

Whether AB 2646 becomes the effective wage floor for H-2A workers will turn on how the Labor Department structures its replacement AEWR rule by Dec. 30.