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The Wage Liability Risk From Au Pairs And Other Staff Who Live On-Site

A Denver federal court recently approved a $65.5 million settlement for approximately 10,000 au pairs, who will receive an average of $3,500 each.

The lawsuit was filed by the nonprofit, Towards Justice, five years ago. It alleged the 15 private agencies that manage the federal government's au pair program conspired to keep pay low and retaliated against those who complained about the pay or spartan living conditions.

The 15 private agencies set the wage rate for au pairs and generally are in charge of policing themselves.

The U.S. government's au pair program brings young people from around the world to work as live-in nannies with American families. The program began as a cultural exchange, but critics say it has become a source of cheap childcare for Americans.

Because au pairs receive room and board, most agencies set the hourly wage at $4.35, well below federal and state minimums, for 45 hours of work per week.

The settlement also requires the 15 partner agencies to inform au pairs and host families that they can negotiate a wage rate that is higher than the one set by the federal government. Evidence suggests that the agencies had told families and au pairs in the past that they could not be paid more.

The settlement did not address whether au pairs in states such as Colorado with higher minimum wage rates should be paid more. Alan Prendergast "Au Pair Lawsuit Leads to $65 Million Settlement" (Jul. 19, 2019).

Commentary and Checklist

Family employers must make sure that all staff are paid and treated in accordance with the minimum standards of the Fair Labor Standards Act (FLSA). This holds true even if the staff member comes through a staffing agency or participates in a program that makes wage payment recommendations to the contrary. State and local laws may vary, so it is wise to consult with your local counsel because the highest rate available must be paid.

Family employers should perform due diligence and ask organizations they do business with about their adherence to the FLSA; in particular, paying the minimum wage and overtime.

Family employers can avoid liability by not assuming that wage and hour requirements do not apply to live-in staff, such as au pairs, and by not assuming that a staffing agency is complying with the law.

Here are some tips for family employers who employ live-in staff:

  • Although many live-in staff members are overtime exempt, living on-site does not guarantee exempt status. Consult your attorney and consider job duties before designating a live-in worker as exempt.
  • Other FLSA regulations do apply to live-in domestic workers. They must receive federal or state minimum wage (whichever is higher) for all hours worked.
  • To be considered a "live-in" worker, the staff member must reside on the employer's premises permanently or for an extended period of time (five days/nights per week).
  • Live-in staff does not include those who only work for the employer for a few weeks or work 24-hour shifts at the home.
  • When including room and board as part of a live-in staffer's wage, you must keep a record of your costs and use that to calculate its value. Lodging costs must be reasonable.
  • Live-in staff does not have to be paid for time they are at the home but free of all work duties—i.e., when eating, sleeping, or performing other personal activities. However, they must be paid when they are "engaged to wait."
  • Make sure that staff does not perform any work duties during their "off" time in the home.
  • Consult with your attorney to make certain that any liability on wages flows to the staffing agency.
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