School’s out for the summer – at least for a couple of more weeks. For many parents with school-aged children, summer presents the need for additional childcare. In fact, the reality is that many working parents need childcare all year long in one form or another. A recent Tenth Circuit decision illustrates certain legal risks associated with employing childcare professionals.

In Beltran et al v. InterExchange, Inc. et al, several au pairs sued their employing agencies alleging violations of the Fair Labor Standards Act (FLSA). The defendant agencies facilitated the placement of au pairs (most times from overseas) with different families, providing payment. The court found that the agencies grossly underpaid the au pairs by providing them with well-under the minimum wage. The court similarly awarded over $22 million in attorney’s fees (an very high amount) given the severity of the violations.

The following tips should be kept in mind for parents employing nannies and au pairs to help minimize liability:

• Nannies and au pairs must receive minimum wage. Despite a common misconception, even nannies living with families are still entitled to the minimum wage for all hours worked. The federal minimum wage is $7.25. However, workers are eligible to receive the state-minimum wage where they work. In the District of Columbia, the minimum wage is currently $14. (Virginia’s minimum wage aligns with the federal minimum wage at $7.25).
• Employers must keep track of hours worked. When a nanny lives with a family, it is typical for them to “blend in” and work at odd hours. This, however, does not excuse the employer’s parent from keeping track of all hours worked – all of which must be paid. Exclusions exist for bona fide meal and rest periods. The meal and rest periods must be clearly defined via an agreement to avoid unintended “gray area” and potential liability.
• Employees employed by an agency must receive overtime. Live-in nannies and au pairs employed by individual families may be eligible for an overtime exemption. Third-party employers, such as agencies, must pay overtime and the minimum wage. If you are a family using an agency, verifying how they pay employees before signing on with them is a safe bet.

Feel free to reach out to me to discuss your employment arrangement with your nanny or au pair. As the new school year ramps up, it makes sense to double-check that everything is legally in order. Significant consequences may exist if there are unintended gaps.