Daily Dicta: Boies Schiller Settles Au Pair Class Action for $65M
The settlement doesn't explicitly require au pairs to be paid at least $7.25 an hour. It just stipulates that the defendants must make it clear “that host families and au pairs are free to agree to compensation higher than the legally applicable minimum.”
January 10, 2019 at 01:40 PM
4 minute read
Over the years, I've known multiple families with au pairs. Some of them were good, some were flaky, but they were all amazingly cheap: 45 hours a week of childcare for $195.75, regardless of how many children you have, plus light housework.
That era is now ending.
On Wednesday, Boies Schiller Flexner and co-counsel Towards Justice settled a class action on behalf of nearly 100,000 underpaid au pairs for $65.5 million.
In 2014, firm partners Peter Skinner and Matthew Schwartz teamed up with the Colorado-based non-profit and sued the 15 agencies designated by the U.S. State Department as the exclusive “sponsors” of J-1 visas for au pairs, alleging that they conspired to illegally fix standard au pair wages.
The agencies allegedly set au pair pay at $4.35 an hour—well below the federal minimum wage of $7.25. However, the host families are required to provide room and board for their au pairs. Once that's factored in, the defendants say the au pairs receive compensation that's equivalent to the minimum wage. Moreover, they point to a longstanding State Department formula that sets this minimum “stipend.”
In February of 2018, U.S. District Judge Christine Arguello in Colorado certified two classes and multiple subclasses of more than 91,000 J-1 visa au pairs. The case was slated for trial next month.
The settlement doesn't explicitly require au pairs to be paid at least $7.25 an hour. It just stipulates that the defendants must make it clear “that host families and au pairs are free to agree to compensation higher than the legally applicable minimum.”
However, the judge in an earlier holding wrote that “The court believes that the [Fair Labor Standards Act] does, in fact, apply to plaintiffs' claims here”—suggesting that paying the actual minimum wage might be prudent.
Still, that's only $326.25 a week. By comparison, a live-in nanny commands an average of $652 a week, while a live-out nanny makes an average of $705 a week, according to the plaintiffs.
The settlement terms call for the plaintiffs lawyers to get 35 percent of the total, or about $23 million. Which I'm pretty sure is way more than $7.25 an hour.
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