A high-powered law firm has joined forces with a small nonprofit to press a lawsuit alleging that more than a dozen agencies that recruit foreigners to work in the U.S. as au pairs illegally conspired to keep their wages artificially low.
Boies, Schiller & Flexner joined the suit, which was first filed by the nonprofit Towards Justice and has since been amended, earlier this month. It alleges that the defendants illegally colluded to keep wages paid to au pairs at $195.75 per week, or $4.35 per hour for 45 hours. That's below the amount they were owed under federal and state wage and hour laws, and less than what they could have earned on the open market.
Attorneys for the plaintiffs are planning to seek class action status for their case.
"... the Defendants have misled au pairs in an attempt to convince them that the $195.75 rate has been imposed by the U.S. government, and that au pairs should be suspicious of any host family who might offer to pay them more," the plaintiffs argued in papers filed in federal court in Colorado. "The result: young men and women who have come to this country, lured by the promise of earning an honest living while learning about American culture, have been subjected to sub-standard working conditions and a violation of their rights."
The plaintiffs claim to represent 50,000 current and former au pairs who have worked in the U.S. over the past five years. Should they prevail, they might be entitled to a doubling or tripling of damages if the au pair agencies were found to have violated antitrust and wage laws. Although the plaintiffs aren't now suing the tens of thousands of families who employed the au pairs, that hasn't been ruled out.
The agencies argue that the au pairs aren't entitled to higher wages because they receive room and board from their host families as part of their compensation, an argument the plaintiffs reject. Efforts to reach attorneys representing the agencies were unsuccessful. They have filed a motion to dismiss the case, which the plaintiffs are opposing.
"One of the defendants ... advertises how much cheaper au pairs are than nannies who performs similar services," said Matthew L. Schwartz, a partner at Boies Schiller Flexner, in an interview with CBS MoneyWatch. "They say the cost of a nanny is $600 a week. Contrast that with what au pairs are being paid, and that will give you some sense of what the damages might be for a single au pair."
Even if the court accepts the defendents' arguments that housing is a part of an au pair's wages, that would bring their wages only to the federal minimum of $7.25 per hour, which is lower than the minimum state wage in more than two dozen states, according to Schwartz.
"We believe the law is pretty clear that they are not entitled to offset the cash wages that are paid to au pairs with room and board because the law requires them to provide au pairs with room and board," he said. "It's a business expense just like any other business expense."
In an interview with the Washington Post earlier this year, Michael McCarry, director of the Alliance for International Cultural and Educational Exchange, which represents many of the agencies, said the U.S. State Department had never before raised the issue of the minimum wage. The State Department, however, disputed this notion and told the paper sponsors must comply wage laws. The Alliance for International Cultural and Educational Exchange didn't respond to a CBS MoneyWatch call seeking comment for this story.
Nathan Arnold, a spokesman for the State Department, told CBS MoneyWatch that a review of the au pair program was still ongoing and is expected to be finished this summer. He didn't have further details.
Boies, Schiller and Flexner chairman David Boies has been involved in many high-profile cases such as the Microsoft antitrust case, where he successfully represented the U.S. Justice Department. More recently, Boies helped get California's ban on gay marriage overturned.