Cover Story

Industrial Waste

by Jeremy Alford

The federal immigration debate has ensnared some of Louisiana's most iconic industries - and the guest workers they rely on.

You've probably never heard of an H-2B guest worker visa. But you have probably enjoyed the yield it produces. Like one of those melt-in-your-mouth Gold Brick Eggs from Elmer Candy. Or a package of Louisiana-harvested crawfish tails. Or maybe it was a night out in New Orleans, kicked off with drinks at one of the newer hotels.

The federal immigration debate has ensnared some of Louisiana's most iconic industries - and the guest workers they rely on.

You've probably never heard of an H-2B guest worker visa. But you have probably enjoyed the yield it produces. Like one of those melt-in-your-mouth Gold Brick Eggs from Elmer Candy. Or a package of Louisiana-harvested crawfish tails. Or maybe it was a night out in New Orleans, kicked off with drinks at one of the newer hotels.

The federal H-2B program allows American companies to bring in guest workers - legal immigrant labor - to take jobs no one else wants. In fact, for a domestic business to use the program, it must prove that local workers don't want the jobs through aggressive recruiting efforts in its region. The non-agricultural, temporary visas expire after 10 months, at which point the guest workers, typically from Mexico and Central America, must return home.

Nationwide, only 66,000 H-2B guest workers may enter the country each year. In 2011, Louisiana hosted more than 3,100, largely in seafood processing plants, construction and certain food-preparation jobs. Now, however, some employers in those industries are contemplating closure or relocation - thanks to two new regulations promulgated by the U.S. Department of Labor.

The first new rule, known commonly as the "wage rule," would increase wages for all H-2B guest workers across the board. In Louisiana, that could mean wage increases ranging from 32 percent to 100 percent, based on a recent economic impact study conducted by the LSU AgCenter.

Secretary of Labor Hilda L. Solis says she's pushing the change-up to "ensure that the program is used as intended by making these jobs more accessible to U.S. workers and providing stronger protections for every worker." The rule would allow wages to be established under an agreed-upon collective bargaining agreement; based upon legislation known as the Davis-Bacon Act or the Service Contract Act; or through a rate determined by the Occupational Employment Statistics wage survey - whichever is highest.

Under the old rule still in effect, H-2B participants have to either pay the prevailing wage, determined by the government and based on average industry wages in the region, or the state or federal minimum wage - again, whichever is highest.

Currently, prevailing wages in South Louisiana eclipse the U.S. minimum wage and even surpass the $8-per-hour threshold during certain times for seafood processors. "I don't know any business that could absorb a 32 percent wage increase and stay solvent," says state Agriculture Commissioner Mike Strain. "If these wage increases are allowed to stand, it will probably put Louisiana's last few remaining crawfish tail meat processors out of business. And that's a shame because Louisiana created the crawfish business."

If you believe the AgCenter study, annual H-2B wages in Louisiana will increase from $13 million to $19.5 million over the span of only 12 months under the wage rule. Meanwhile, the estimated reduction in economic activity in Louisiana resulting from the proposed wage increase could be $40 million to $60 million per year, Strain adds.

It's almost ironic that a program created to help businesses hire seasonal workers so they wouldn't have to shutter operations unexpectedly is now on the verge of forcing some of the same businesses to do just that. "American workers aren't willing to take a seasonal job peeling crawfish or shrimp or picking crab meat for four or five months," Strain says. "Consequently, employers cannot fill vacancies for temporary jobs in their peeling plants, sugar mills, forests and packing factories, so they have to advertise for guest workers who are willing to do those jobs."

The second new rule, known as the "program rule," would force employers to guarantee that guest workers will be paid 75 percent of their wages even if they work less than three-quarters of the work week. This is the rule with the harshest rub for Louisiana seafood processors, since it would mean that guest workers would have to be paid even if a hurricane temporarily shuts down an industry.

The National Federation of Independent Business lobbied against the program rule for three reasons:

The three-quarters provision would essentially force employers to pay their guest workers even if the work doesn't get done.

Another provision would have required that employers pay transportation, Visa, processing and other costs for the guest workers. And even if all of these costs have already been paid for, thus filling the slot on the payroll, the employer must continue to try to recruit American workers up to 21 days prior to the guest worker's start date.

It would require employers to pay the same wages to any guest worker performing similar work. For example, let's say a guest worker on a landscaping crew doesn't show up for work and the supervisor is forced to take the absent worker's place for the day. If the supervisor does the same work as any H-2B worker on the crew, the employer would be required to pay the H-2B workers the same rate as the supervisor.

This isn't the first time the H-2B program has been under attack. The feds used to allow much more than 66,000 guest workers into the country - there were roughly 122,500 in 2006 - but the figure has slowly been whittled down, forcing seafood processors and others to fight for guest workers.

Michael Hensgens of Lafayette, a board member of the Crawfish Processors Alliance, says the government is actually turning down potential workers, albeit temporary workers, who pay taxes and contribute to Social Security. Crawfish harvesters and the fishery suffer too, he says, because processors no longer have the same opportunities to buy daily catches and there's a resulting dead-loss of young and tender crawfish.

The program rule, in particular, could have a devastating impact on the seafood industry, Hensgens says, including crab and oyster processors. "These efforts by the DOL will severely cripple and ruin our crawfish industry. Other seasonal industries in Louisiana will be similarly affected," he argues. "When your business depends on a timely harvest with a perishable product, you need extra hands willing to work during that particular season."

For now, opponents can take comfort in the fact that the two rules have been delayed, probably at least until November, pending a Florida court injunction. The Labor Department is in the infant stages of appealing the decision.

As is the norm with politics, there's more than one way to skin a pending regulation. Last year, U.S. Rep. Charles Boustany, R-Lafayette, and others were able to forestall similar attempts by threatening to pull funding from the Labor Department. But such options are now limited with each passing day. "One way to avoid significant expenses to our region's small businesses is for [the Labor Department] to withdraw these ill-advised rules," Boustany says.

Lafayette crawfish processor Frank Randol says if the uncertainty persists he'll sit out a season. To date, he's already reduced some costs in preparation for the new rules. "I'm making plans the best way I can," Randol says. "If I knew what the ball game is, it would be easier. Next year, I don't know what I'm going to do."

Randol says his business has experienced a few shutdowns over the past 40 years due to labor shortages and ecological reasons, but never due to regulatory uncertainty. "The Department of Labor is running rogue on this thing. Congress never intended it to be this way," he says. "And you know who's going to pay the most for all this? The consumer."

If push eventually comes to shove, Randol says he has an "option" to move operations to Mexico. It's a familiar theme, one that has been repeated to a certain extent by Rob Nelson of the Elmer Candy Corp. in Ponchatoula. Nelson says he needs 175 seasonal workers around Christmas time to prepare his Valentine orders - Elmer's is the second largest candy company in North America in terms of boxed candy for the February holiday.

Out of the 175 seasonal workers he hires, Nelson says he can usually find about 40 local workers. It's a cheaper prospect for him, since H-2B-participating businesses have to pay the feds $1,000 for every guest worker they want to use. If labor costs increase and the regulatory environment doesn't change, Nelson says he may have to consider relocating. But that's only a worse-case scenario. "We're not looking right now," Nelson notes. "We don't want to move. We've been here for 157 years and were founded in New Orleans. I really don't know what we are going to do. I just hope this thing gets better."

On the other side of the issue are groups like Centro de los Derechos del Migrante, a Mexico-based migrant worker rights organization. Executive Director Rachel Micah-Jones argues that the new rules prevent over-recruiting and then benching workers, and they prohibit employers from reprisal against workers who file complaints. "This rule is an important victory for workers," Micah-Jones says.

The Lawyers' Committee for Civil Rights Under Law, a nonpartisan nonprofit that credits late President John F. Kennedy with its founding, says the program rule in particular goes a long way in addressing overlooked abuses. For instance, it calls for transportation reimbursements averaging more than $900 per worker.

If the court wouldn't have blocked both of the rules, the committee argues that they "would have provided modest, common-sense requirements and greatly increased protections for U.S. workers and H-2B guest workers against various forms of abuse, including safeguards against retaliation, fair compensation for travel expenses and an opportunity for United States workers to seek and obtain these jobs first."

Randol says he's more concerned about his own rights and how a national debate over immigration has come to dictate the way small business owners operate on the bayou. "One day we're all going to wake up and realize that it was our own country that did this to us," he says. "But I'm a survivor. They won't put me out of business."

Jeremy Alford can be reached at [email protected].