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Court Finds Au Pair Program Sponsors Colluded to Fix Wages and Exploit Au Pairs

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Court Finds Au Pair Program Sponsors Colluded to Fix Wages and Exploit Au Pairs

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A group of plaintiff au pairs have survived a Motion to Dismiss filed by 15 au pair sponsoring agencies.  The Federal Judge held that the J-1 au pairs can go forward with their claims that program sponsors fixed wages so they earn no more than minimum wage under the Fair Labor Standards Act.

The lawsuit claims that the au pair agencies have entered into tacit agreements to set wages at no more than $195.75 a week and that such agreements violate the Sherman Anti-Trust Act, the Fair Labor Standards Act and various state wage and hour laws.

The J-1 au pair program which is a exchange program was originally designed to be a cultural exchange program, but it has come under severe scrutiny since the 1990s when the GAO found that the program lacks procedural safeguards necessary to ensure that participants are really participating in cultural exchange activities and not being exploited as cheap labor.

In her decision, Magistrate Judge Tafoya, holds that the regulations governing the J-1 au pair require payment of at least the federal minimum wage based on a 45-hour workweek in accordance with the FLSA.  However, the judge found sufficient evidence that au pair agencies have interpreted the requirement that they be paid the minimum wage and nothing more.  Significantly, the 15 named defendant sponsors control all J-1 au pair participants activity in the U.S. and the judge held that they have control over the wage without differences for geography, state laws, or number of children.

Judge Tafoya also found that the au pairs  can maintain their claims for fraud, breach of fiduciary duty, unjust enrichment and promissory estoppel.

All employers considering J-1 programs should consult with experienced immigration counsel and monitor developments in this area.

 

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