The DoS proposed rule argues that a defect of the current compensation mechanism for determining the minimum weekly stipend for au pairs is the “geographically-specific variation in the costs of living.” The DoS additionally justifies this action by arguing that the “federal minimum wage no longer provides sufficient compensation to au pairs placed in geographic areas in which growing number of states and localities have adopted state or local minimum wages that exceed the federal minimum wage.” An additional justification is that “The Department of State proposes to adopt a national four-tiered wage formula to provide consistency in au pair compensation across geographic regions and in areas with similar local economic conditions.”
In addition to the compensation component of the au pair program that DoS proposes to reform is another component that allows host families to deduct 40 percent of the current stipend to reimburse host families for the cost of lodging and meals. Under current rules, that works out to $130.50 per week, which can be deducted from the minimum weekly salary of $326.25, resulting in a minimum weekly take-home pay of $195.75. The lodging credit is based on FLSA standards of 7.5 hours per week X $7.25 (the federal minimum wage). The meals credit is based on the following formula: $7.25 (the federal minimum wage) X 37.5 percent for breakfast + $7.25 X 50 percent for lunch + $7.25 X 62.5 percent for dinner. The sum of the products is multiplied by 7 to determine the weekly deduction for meals. The DoS does not propose increasing the monetary cost of lodging and meals that host families can deduct from au pair compensation. In other words, the DoS proposes increasing the wages paid to au pairs but does not adjust the lodging and meals deduction formula to include those new higher minimum wages.
