H-2A Payroll: What Farm Employers Need to Know About Paying H-2A Workers

Hiring workers through the H-2A visa program solves a real labor shortage for a lot of farm operations, but it comes with a payroll rulebook that’s stricter, and different, from both standard payroll and standard agricultural payroll.

H-2A payroll requires paying workers at least the applicable Adverse Effect Wage Rate (AEWR), providing specific benefits like housing and transportation, and generally exempting H-2A wages from FICA and FUTA taxes, unlike most other agricultural employment. Here’s what farm employers actually need to track.

What the H-2A program actually is

The H-2A Temporary Agricultural Workers program allows U.S. farm employers to hire foreign workers for seasonal or temporary agricultural work when there aren’t enough U.S. workers available. 

Bringing on H-2A workers requires a certified job order through the Department of Labor before the visa process even begins, and that job order sets the specific wage and benefit terms the employer must follow.

The Adverse Effect Wage Rate

The Adverse Effect Wage Rate (AEWR) is the minimum hourly wage H-2A employers must pay, set annually by the Department of Labor and varying by state and sometimes by specific type of agricultural work. The AEWR exists to prevent the H-2A program from driving down wages for U.S. workers doing comparable jobs.

The AEWR changes annually and varies significantly by state. Employers must pay whichever is highest among the AEWR, the applicable state or federal minimum wage, or the wage specified in their approved job order. Confirm your state’s current AEWR directly with the Department of Labor before setting pay rates.

H-2A workers and FICA

This is the detail that surprises most first-time H-2A employers: wages paid to H-2A workers are generally exempt from FICA taxes. Neither the employer nor the worker withholds or pays Social Security and Medicare tax on H-2A wages, which is a meaningful difference from standard agricultural or non-farm payroll.

H-2A workers and FUTA

H-2A wages are also generally exempt from FUTA tax, the federal unemployment tax that applies to most other agricultural and non-agricultural wages. This exemption reflects the temporary, visa-specific nature of the employment relationship.

Federal income tax withholding

Unlike FICA and FUTA, federal income tax withholding is not automatically required on H-2A wages, since H-2A workers aren’t classified the same way as standard employees for this purpose. However, an H-2A worker can voluntarily request withholding by submitting a completed Form W-4 to their employer, and many choose to do so to avoid a larger tax bill when filing their own return.

Required benefits beyond wages

H-2A employers are required to provide, at no cost to the worker:

• Housing that meets specific federal standards

• Transportation to and from the worker’s home country or point of recruitment, and between housing and the worksite

• Meals, or free and convenient cooking facilities if meals aren’t provided directly

• Workers’ compensation coverage, regardless of state-level requirements that might otherwise exempt agricultural work

These aren’t optional perks, they’re conditions of the certified job order, and failing to provide them can jeopardize an employer’s ability to participate in the H-2A program going forward.

Reporting and recordkeeping

Even with the FICA and FUTA exemptions, H-2A employers still have real reporting obligations:

• Form W-2 must still be issued to H-2A workers by January 31, even though FICA wasn’t withheld

• State new hire reporting still applies in most states

• The Department of Labor requires payroll recordkeeping specific to the certified job order, including hours worked, wages paid, and any deductions taken

H-2A payroll compared to standard agricultural payroll

Getting H-2A payroll right

The exemptions built into H-2A payroll exist because of the program’s specific visa structure, not because the payroll obligations disappear. Between the AEWR, the required benefits, and the recordkeeping tied to a certified job order, H-2A payroll requires more upfront structure than standard agricultural payroll, even though the day-to-day tax withholding is simpler in some respects. Getting the wage rate and benefit obligations right matters as much for maintaining program eligibility as it does for basic payroll accuracy.

H-2A payroll comes with its own exemptions and its own recordkeeping requirements tied to a certified job order. PayWow helps farm employers manage H-2A wages, required benefits tracking, and W-2 filing correctly, without needing a separate system for seasonal workers.