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Au Pair Sponsor Agencies Agree To $65.5 Million Unpaid Overtime Settlement

Around 100,000 au pairs who lived and worked in the United States are set to receive significant financial compensation. On Wednesday, January 9, 2018, 15 of the companies sanctioned by the US State Department to recruit young foreigners as au pairs reached a $65.5 million settlement in a class action overtime and minimum wage lawsuit, NPR reports.

Unpaid Wage Lawsuit Ends In $65.5 Million Lawsuit

Filed in a Denver federal court, the class action lawsuit sought to represent the interests of about 100,000 former au pairs who worked in the United States between 2009 and 2018. In court filings, around 10 au pairs argued that their recruiting agencies colluded to keep wages low and deprive workers of earned overtime pay.

Child and babysitter

The case was set for trial on February 25, 2018. “Our argument,” says attorney Peter Skinner, “was that [the agencies] colluded together to keep their wages well below state and federal minimum wages, and [prospective au pairs] were being told by sponsor agencies that the wages were set and that there was no room to negotiate.”

Au Pair Programs Misrepresent Compensation, Attorneys Say

In legal documents, the au pairs allege that 15 of the major au pair agencies falsely claimed to prospective applicants that the federal government sets their maximum weekly wage at $195.75 for a 45-hour work week. That comes out to $4.35 per hour, nearly $3 lower than the federal minimum wage of $7.25. In reality, the lawsuit claims, au pairs have every right to negotiate for a better salary. “Au pairs have always had the ability to negotiate their salaries under the existing regulations but they were being given incorrect information,” Skinner added, before saying, “we’re pleased that our years of hard work will bring justice to so many young child care workers and fundamentally change the way the au pair industry works.”

Au Pair Agencies Say Underpayment Is A Mirage

Au pair sponsor agencies continue to deny the lawsuit’s accusations, noting that their pay calculations come from State Department guidelines that allow families to deduct up to 40% of an au pair’s salary for room and board, which these families are required to provide. Accounting for room and board, the au pair agencies claim, a salary of $195.75 amounts to about $344.38 per week in total compensation, which is above the minimum wage.

“There’s always been one nationwide stipend,” says Michael McCarry, director of the Alliance for International Educational and Cultural Exchange, a group that represents au pair sponsor agencies. “[The State Department] has never raised the issue with us about state minimum wage laws.”

The J-1 Visa Program

Au pairs are permitted to live and work in the United States under the State Department’s J-1 visa program, which was established in 1986. The program is framed as a cultural exchange, providing applicants with the opportunity to study and learn English through immersion. Critics of the program, who claim that au pair programs create underpaid labor, argue that the program should be administered by the US Department of Labor.

In addition to monetary compensation, the settlement also includes a requirement for au pair companies in the future to provide au pairs with adequate information about their rights under federal law and regulations.

The lawsuit was initially filed in 2014 by Denver’s Towards Justice, a legal advocacy non-profit representing workers in wage and other rights claims. David Seligman, director of Towards Justice, says he believes the au pair settlement may be the largest ever brokered on behalf of minimum wage workers. The resolution, he continued, “will finally give au pairs the opportunity to seek higher wages and better working conditions.”

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