California's $19.75 Farmworker Wage Bill Is on Newsom's Desk — Here's the Deadline

A wage bill that could reshape labor costs on California farms

Every year, California lawmakers push a fresh wave of wage legislation, and this year the target is agriculture. Assembly Bill 2646, authored by Assemblymember Maggy Krell, D-Sacramento, would set a $19.75-an-hour minimum wage for certain agricultural workers in California. It passed the Legislature in late August 2026 and now sits on Governor Gavin Newsom's desk. He has until September 30, 2026, to sign or veto it. If he signs, the law would take effect January 1, 2027.

For California farm owners, packers, and agricultural employers, that's a narrow window to plan for a labor cost increase that could show up in a matter of months.

Who the bill actually targets

AB 2646 doesn't name H-2A workers directly, but according to analysis from the agricultural trade group Western Growers, the bill's real target is the federal H-2A visa program, which brings temporary foreign agricultural workers into the U.S. Bill author Krell has said the legislation restores a pay floor that was removed when the Trump administration lowered the minimum wage requirement for H-2A workers in late 2025.

The bill also extends to "corresponding employees" — meaning California residents doing the same work alongside H-2A workers on the same farms would be entitled to the same $19.75 hourly rate.

The case for the bill

Supporters argue the increase is overdue. "The truth of the matter is those who are doing the hard work, who are waking up before dawn, working on those farms are barely getting by and some are not getting by at all," Krell told fellow Assembly members during a May hearing on the bill.

Assemblymember Chris Rogers, D-Santa Rosa, made a similar point during the same hearing, arguing that rising costs shouldn't be balanced on the backs of the workers who can least afford it: "We recognize that the cost of everything has gone up, but it doesn't mean that this Legislature should balance that by keeping the wages artificially suppressed for folks that need that help the most."

The case against it — and why farm owners are worried

Opponents, including several Republican lawmakers and grower associations, argue the timing couldn't be worse. California agriculture is already dealing with high water costs, federal tariffs, and existing overtime rules that have squeezed margins for years.

Jason Resnick of Western Growers, in an analysis of the bill, warned that the added labor cost is not something farms can simply absorb: "The result is easy to predict: higher costs for California farms already squeezed by labor, water, energy, insurance, regulation and unforgiving market conditions. Sacramento often talks as if these costs can simply be absorbed. They cannot. They are passed on to consumers, borne by growers operating on razor-thin or negative margins, or avoided entirely when production moves elsewhere."

There's also a compliance wrinkle specific to H-2A employment that non-agricultural business owners may not realize: under the H-2A program, employers are already required to provide workers with free housing, transportation to and from the job site, and either three daily meals or free cooking facilities. A higher hourly wage compounds those existing per-worker costs rather than standing alone.

The backdrop: a wave of farm closures

Whichever side of the debate you land on, the financial pressure on California agriculture is well documented. From 2021 through 2026, California recorded the third-highest number of farm bankruptcies in the country when Chapter 12 and Chapter 11 filings are combined, trailing only Arkansas and Georgia, according to Farm Journal data. Notable casualties in recent years include the 2024 bankruptcy of Prima Wawona, one of the state's largest almond growers, and the more recent bankruptcy of Del Monte, which left peach and pear growers throughout the state without a processor for their fruit. Almond processing giant Blue Diamond also closed a major Sacramento facility, and wine grape acreage has retreated significantly amid oversupply and rising costs.

Assemblymember David Tangipa, R-Clovis, pointed to that pattern directly during the May hearing: "Ask anybody who's worked at Blue Diamond, Del Monte, Wawona, packing houses, all of them have shut down recently. How many more need to be shut down before we learn our lesson?"

A preview from the fast-food wage hike

California has been here before. In April 2024, Newsom signed a bill raising the fast-food minimum wage to $20 an hour. Two years later, industry watchers say the consequences are becoming clearer: a major Carl's Jr. franchisee operating nearly 60 Southern and Northern California locations filed for bankruptcy earlier this year, specifically citing the minimum wage increase despite raising substantial revenue, according to trade publication Restaurant Dive. Separately, researchers at UC San Diego found the fast-food wage law led to fewer jobs and accelerated automation across the industry.

Whether AB 2646 follows a similar pattern in agriculture remains to be seen, but the fast-food precedent is exactly why farm groups are pushing hard for a veto.

What California ag employers should do now

• Model the cost impact today. If you employ H-2A workers or California residents doing comparable farm work, calculate what a jump to $19.75 an hour would mean across your payroll, and build it into your profit and loss statement projections for 2027 now rather than waiting for a signature.
• Review your worker classifications. With wage rules shifting, it's a good time to double-check how you're classifying seasonal labor and contracted work — see our guide on independent contractor vs. employee status for the distinctions that matter most to compliance.
• Watch the September 30 deadline closely. Newsom can sign, veto, or — in rare cases — let a bill become law without his signature. Farm employers should track the outcome directly rather than assuming either direction.
• Talk to your insurance broker. Wage increases can also shift workers' compensation premium calculations, since many policies are rated in part on total payroll. Review your business insurance coverage before the new year if the bill is signed.

The bottom line

AB 2646 is a bet on both sides: supporters are betting that a wage floor lifts farmworkers out of poverty, and opponents are betting that another cost increase pushes more California agriculture out of the state entirely. For the small and mid-sized farm operations caught in the middle, the practical move right now is to plan for both outcomes and watch Sacramento closely between now and September 30.

Photo by Dan Meyers on Unsplash