(HB1625)

GOVERNOR'S VETO

Pursuant to Article V, Section 6, of the Constitution of Virginia, I veto House Bill 1625 which removes the farmworker exemption from the Virginia Minimum Wage Act.

The proposal's effects on labor costs, as determined by existing federal law, are especially concerning.

All producers who employ H-2A workers must adhere to the U.S. Department of Labor's Adverse Effect Wage Rate (AEWR), currently set at $16.16 per hour.

The AEWR is determined using various domestic workers' annual average gross wage rates in a state or region. Eliminating the farmworker exemption would align the AEWR with the increased wage mandate, significantly increasing costs beyond sustainable levels for farmers.

Even farms that do not employ H-2A workers pay the AEWR to compete with those that do, creating a blanket increase in the cost of production for all agricultural products.

Farmers have a unique economic environment with unpredictable weather and fluctuating production costs. Due to federal pricing systems and global market conditions, farmers often lack control over the prices they receive for their goods. Agricultural budgeting and operations are already challenging, and imposing a wage mandate without considering these factors could drive small and medium-sized farms into debt or closure. The agricultural sector has thin margins, and this bill will significantly affect the industry.

Each job created in the agriculture sector simulates 1.6 jobs elsewhere in Virginia's economy. This multiplier effect demonstrates the agriculture sector's significant effect on the overall state economy. This ripple effect helps to drive economic growth and stability across Virginia, making agriculture a crucial component of the state's prosperity.

A minimum wage requirement unnecessarily strains farmers financially, leading to farm closures, job losses, and increased consumer food prices.

Accordingly, I veto the bill.