Quality, affordable childcare can be very difficult to find in New York. As such, many people favor the idea of welcoming an au pair into their home. Au pairs, unlike nannies and other childcare providers, are usually young women who live in foreign countries but have special authorization to work in the U.S. Through the program, they receive room and board from their host families.

However, according to a recent federal court case, sponsor agencies have been facilitating an environment of underpayment and misinformation for roughly 100,000 former au pairs.

“No room to negotiate”

The lawsuit, filed by 12 au pairs, accused authorized au pair recruiters of contributing to widespread underpayment. These agencies reportedly colluded to keep wages low. So low, in fact, that many au pairs received just $4.35 per hour, which is much lower than the $7.25 federal minimum wage. The agencies reportedly said that the discrepancy stems from the 40 percent families can deduct from the au pair’s salary to cover room and board.

The lawsuit also stated that the agencies falsely told current and prospective au pairs that there was no room for negotiation in their salaries.

The parties recently came to a settlement, though. Not only will the au pairs receive $65.5 million in unpaid wages, but the agencies agreed to provide au pairs with better information about their rights as workers in the U.S. And while there was no solution to the larger issues of underpayment and wage abuse, this case could spark sponsor agencies to improve their recruitment policies and guidelines regarding salary.

What readers can learn from this case

It can be quite difficult to understand your rights as an employee in New York — especially if you are from outside the U.S. You can be fearful of questioning wage discrepancies and unsure about whether you are receiving proper compensation, including overtime.

However, as this case shows, workers have rights and legal options, even when they are told otherwise. To understand the laws regarding overtime or minimum wage, it can be wise to consult a legal professional.