Cost of Hiring Au Pairs Could Double Under Biden Administration Proposal | Mint

Cost of Hiring Au Pairs Could Double Under Biden Administration Proposal

Staci Florence and her family turned to using an au pair for child care during the pandemic when daycares were slow to reopen.
Staci Florence and her family turned to using an au pair for child care during the pandemic when daycares were slow to reopen.

Summary

A new formula for foreign nannies, which would take into account state and local minimum wages, draws criticism from families.

WASHINGTON—A popular child-care option would be put out of reach for some families under a new Biden administration proposal that could double the cost of hiring an au pair.

The proposed policy change, released this fall by the State Department, would require au pairs—foreigners brought to the country to work as nannies—to be paid using a new formula that takes into account state and local minimum wages, in a bid to ensure that they are paid fairly.

But the financial effect, many families say, would be difficult to absorb.

Staci Florence, a product manager and Navy reservist living in Sanford, N.C, said she turned to the program during the pandemic as a solution to take care of her three young children when local daycares were slow to reopen.

“I grew up thinking an au pair was a ritzy thing, not for people in our tax bracket," she said. The proposed increased cost, she said, “scares me."

The au pair visa program, started in 1986 by the State Department, allows foreigners between the ages of 18 and 26—almost all of them women—to move to the U.S. for up to two years to live with a host family and help take care of their children. It is intended as a relatively affordable and flexible form of child care for Americans, as well as an opportunity for ambitious young people abroad to come practice their English and immerse themselves in American culture. About 20,000 au pairs come to the U.S. each year.

Right now, host families are required to provide au pairs lodging, food and a weekly stipend, currently set at a minimum of $195.75 a week for up to 45 hours of work. Au pairs and families alike agree that the minimum stipend is too low, and the State Department has been considering ways to update it since the Obama administration.

The new proposal reflects a tension between two separate Biden administration priorities: protecting workers’ rights and making child care more affordable. Advocates for the program say the administration favored the former goal at the expense of ensuring au pairs are still financially feasible.

“It’s creating this transactional relationship that distances people from one another, when it’s supposed to be this immersive family relationship," said Natalie Jordan, senior vice president at Cultural Care Au Pair, an agency contracted with the State Department that matches host families with au pairs.

The current stipend, which hasn’t changed in more than a decade, is based on the federal minimum wage of $7.25 an hour and deducts 40% of that amount—about $130 a week—to account for room and board.

The proposed new stipend would follow a complex calculation that takes into account the higher of state or local minimum wages, but keeps the weekly room-and-board deduction at about $130.

In New York and California, for example, the minimum stipend would rise to $469.46 a week, and that would cover 40 hours of work, rather than 45. In Texas, which follows the federal minimum wage, the required stipend would be set at $189.46 for 40 hours, though in Austin, it would match California and New York.

Au pairs could still work up to 45 hours under the modified proposal, though the last five hours would need to be paid at time-and-a-half.

There is one precedent for what might happen if the changes take effect. In 2019, a federal appeals court required that au pairs in Massachusetts be paid the state’s minimum wage. In 2020, the required weekly stipend rose from $195.75 to $528.63, a 170% increase. As a result, by 2022, the number of new au pairs heading to Massachusetts fell by 68%, while the program grew in all other unaffected states by 4% in the same time frame, according to a paper published by the Cato institute, a libertarian think tank that favors increased immigration and reducing other government regulations.

On message boards, Facebook groups and in thousands of public comments sent to the State Department, the proposal has polarized au pairs and their host families, with caretakers saying the wage increase and other steps to professionalize the program are long overdue—and families warning they will leave en masse.

Florence, the North Carolina mother, estimated that hosting an au pair costs about $27,000 a year, between agency fees, the weekly stipend and other costs such as car payments and a cellphone plan. Though that is slightly more than enrolling her younger two children in daycare, she said it is worth the extra peace of mind leaving her children with someone they know and trust when she has to leave for a weekend or longer of reservist duty.

Families like Florence’s, with parents working in healthcare, the military or other professions with varying hours, are overrepresented in the au pair program because it offers flexibility. Families, with some warning, can ask an au pair to work modified hours to cover a late shift or weekend away.

In addition to hiking costs, the Biden administration proposal would take away a lot of that flexibility, in a bid to create more regularized working conditions for au pairs. Families, for example, would need to sign a new formal agreement with an au pair—signed off by the matching agency—if they want to shift their hours or ask them to take on new duties. Host families say that rigidity doesn’t take into account things like shifted schedules on school breaks or when a child stays home sick.

But many au pairs welcome the move to formalize the program, including Evelyn Diaz, one of Florence’s past au pairs.

Diaz, 25, is a civil engineer in Colombia who spent one-and-a-half years in the U.S. working as an au pair for two families.

She said that, although she felt close to her host families—she is the godmother to Florence’s youngest son—family members often also unconsciously expected her to work on her off hours. She could sometimes be expected to take care of a crying child when she joined for dinner or wash dishes carelessly left behind in the sink.

“It’s very confusing," she said. “Sometimes it feels like they’re your family, but sometimes it feels like you’re an employee."

Write to Michelle Hackman at michelle.hackman@wsj.com

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