The Guadalajara-Minnesota Connection
As new markets open up, entrepreneurs rush in to fill the demand. An alert reader sent me this picture taken yesterday of a bus parked at a south Metro hotel.…
Every year, thousands of young people from other countries come to the United States to participate in what is called the Exchange Visitor’s Program. These young people, commonly referred to as au pairs, stay with a host family providing childcare services. In return, they get a stipend, and enroll at an institution of higher learning (partly paid for by their American host family), immersing themselves in American culture.
Because it is primarily intended to be a cultural exchange program, the au pair program is more flexible compared to traditional work program visas. However, last October, the Department of State (DoS) proposed a myriad of new rules that it claims will modernize the program. The DoS is currently seeking public comments on the proposed rules.
Among other things, the DoS wants to:
Currently, au pairs are paid at the federal minimum wage of $7.25 an hour. Under the current structure, the host family is allowed to subtract the cost of lodging and meals — which is roughly 40 percent or $130 of weekly wages.
The DoS has proposed moving to a multi-tiered wage formula ranging from $8 to $18 under which au pairs are paid the maximum allowable rate in each tier. In areas where the minimum wage is higher, au pairs will be paid using the local rate.
What does this mean for states?
In Minnesota, for instance, where the state minimum wage for small employers is $8.63, au pairs would be paid $12 an hour. But for au pairs in Minneapolis and St. Paul, where the minimum wage has been raised, wages would be $15 or higher. Wages would, in fact, at least double for every au pair in Minnesota, and more than triple in Minneapolis and St. Paul.
Surely, life has gotten more expensive over the years. However, the DoS rule, while it proposes updating the minimum wage, leaves the amount that the host family can deduct for lodging and meals the same.
Currently, au pairs are allowed to work up to 45 hours per week. And if they are part of the EduCare program — which allows an increased number of school hours — they can work up to 30 hours.
The DoS proposes creating two programs — part-time and full-time. Under the part-time program, au pairs would be allowed to work only up to 31 hours. However, they will be compensated using the maximum allowable number of hours even if they work fewer hours. Similarly, those in the full-time program will only be required to work up to 40 hours and will be compensated for the full 40 hours even if they work fewer hours.
host families must give au pairs one and one-half consecutive days off (36 hours) each calendar week and one complete weekend (48 hours) off each calendar month.
Au pairs are also given two weeks of paid vacation. The DoS is proposing that in addition, host families also give au pairs paid sick leave — 56 hours in a 12-month program. For paid time off, the DoS has changed the requirement from two weeks to a guaranteed minimum of 80 hours for a 12-month program. Not only that but
the host family must permit the au pair to take 40 hours of such leave in conjunction with a 36- or 48-hour weekend.
Currently, the host family is required to contribute $1,000 per year to education for au pairs in the EduCare program, and $500 for all other au pairs. The Dos is proposing raising the education stipend to $1,200 per semester
The DoS proposal contains a myriad of other rules, which as the DOS explains are supposed to modernize the program.
The DoS has proposed increased reporting requirements for both sponsors and host families. Sponsors, for example, must vet all foreign third parties they use and report their findings to the DoS. Host families must keep documentation every week showing their adherence to program rules. DoS has also increased orientation requirements for the program.
For au pairs whose initial placement did not work out, sponsors must rematch them under a specific period or refund their fees before sending them back to their home country if no rematch is found.
In response, American Experiment has submitted comments warning against the risk that these proposed rules pose to an already fragile childcare industry.
Lack of access to high-quality affordable childcare is an issue plaguing the whole country. To a large extent, this is due to stringent regulations that states impose on the childcare industry. The new proposed rules on the au pair program would raise the cost that families pay, and make the program more complicated. This would deter families from participating in the program, worsening the childcare problem even further.
While au pairs are a small fraction of childcare providers in Minnesota, they still relieve some pressure from the market, especially since they are mostly used by high-income families. If these families were to enter the domestic market, prices would likely rise from the increased competition.
You can access the comments here.
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