Thousands of au pairs could share in $65.5 million U.S. settlement

(Reuters) - About 100,000 au pairs who traveled to the United States to provide child care for American families could share in a $65.5 million settlement reached on Wednesday, in a lawsuit that said their wages were kept artificially low.

The lawsuit was filed in a federal court in Colorado in 2014 against sponsor agencies that operated the program under the auspices of the U.S. State Department.

International au pairs, many of them young women, work under a U.S. government visa program intended to give them an opportunity for education and cultural exchange, while they provide childcare to host families.

Most au pairs are paid $4.35 an hour, below the federal minimum wage of $7.25, according to a statement from Boies Schiller Flexner, which represented the au pairs.

The lawsuit accused the sponsor agencies of conspiring to illegally fix the wages of au pairs below the U.S. minimum wage. The sponsor agencies did not admit any wrongdoing.

The proposed agreement, which will require approval from a judge, would require sponsor agencies to notify au pairs they can bargain with families for more than the weekly minimum stipend set by the federal government.

“We’re pleased that our years of hard work will bring justice to so many young childcare workers and fundamentally change the way the au pair industry operates,” Peter Skinner, a partner at Boies Schiller Flexner, said in a statement.

Last year, attorneys for the au pairs obtained a judge’s order certifying the suit as a class action.

The roughly 100,000 au pairs covered by the litigation came to the United States between January 2009 and October 2018.

They will be eligible to apply for compensation from a settlement fund of $40 million, after legal fees and administrative costs are deducted from the total settlement of $65.5 million, according to court papers.

Attorneys for the sponsor agencies named as defendants could not be reached for comment late on Wednesday.

Families provide au pairs with room and board, in addition to paying them.

The sponsor agencies informed families of the minimum weekly stipend under U.S. law, but did not discourage them from paying a higher rate, attorneys for those agencies said in a 2015 court filing.

The lead plaintiffs in the lawsuit were from Colombia and South Africa.

Before the settlement was reached, the case had been scheduled for trial in February.

Reporting by Alex Dobuzinskis in Los Angeles; Editing by Simon Cameron-Moore