Massachusetts Wage and Hour Laws Apply to Au Pairs

by Andrea Peraner-Sweet and Lauren D. Song

Heads Up

On December 2, 2019, in Capron v. Attorney General of Massachusetts, 944 F.3d 9 (2019) (“Capron”), the First Circuit Court of Appeals held that federal laws regulating the J-1 Visa Exchange Visitor Program for au pairs (“Au Pair Program”) do not preempt Massachusetts wage and hour laws applicable to domestic worker arrangements: Massachusetts Domestic Workers Bill of Rights Act  (“DWBRA”), G.L. c. 149, §§ 190191, and the Massachusetts’ Fair Wage Law, G.L. c. 151, § 1. This means that host families in the Commonwealth are obligated to pay au pairs at least the state minimum wage ($12.75/hour effective January 1, 2020) and overtime, higher compensation than the federal $7.25 hourly rate currently required under the Au Pair Program. It also means that host families–as employers of domestic workers–must become familiar with the DWBRA’s requirements because failure to comply with Massachusetts wage and hour laws can expose host families to substantial damages, including treble damages, attorneys’ fees and costs. See Andrea Peraner-Sweet, How to Hire a Domestic Worker and Stay Out of Trouble, 62 Boston Bar J. (Summer 2018).

The Au Pair Program And Its Compensation

As described in Capron, the Au Pair Program is a cultural exchange program regulated by the United States Department of State (“DOS”) through which foreign individuals can obtain J-1 Visas and be matched with United States host families to provide up to 45 hours a week of child care services while pursuing a post-secondary education. 22 C.F.R. § 62.31. The DOS administers the Au Pair Program through private placement agencies it designates to conduct DOS-approved exchange programs (“Sponsors). The Sponsors select and match participants with host families. 22. C.F.R. § 62.10.

The Au Pair Program regulations require Sponsors to ensure that au pairs are compensated “at a weekly rate based upon 45 hours of child care services per week and paid in conformance with the requirements of the [FLSA] as interpreted and implemented by the [Department of Labor (DOL)].” 22 C.F.R. § 62.31(j)(1). The DOL has determined that Au Pair Program participants are “employees” within the meaning of FLSA and, thus, entitled to federal minimum wage. 29 U.S.C. § 206(a). The FLSA, however, exempts live-in domestic workers from overtime payment. 29 U.S.C. § 213(b)(21). DOL regulations also permit deductions for the costs of room and board:  either a fixed credit amount that is tied to a percentage of the federal minimum wage, or  the actual, itemized costs, provided the itemized deductions are supported by adequate records. 29 C.F.R. § 552.100(c)(d). Importantly, as the First Circuit notes, the FLSA contains a savings clause that “[n]o provision of this chapter or of any order thereunder shall excuse noncompliance with any Federal or State law or municipal ordinance establishing a minimum wage higher than the minimum wage established under this chapter.” 944 F.3d at 18 (quoting 29 U.S.C. § 218(a)).

Massachusetts Au Pair Compensation

The DWBRA defines au pairs as “employees” and “domestic workers” and their host families as “employers.” G.L. c.  149, § 190(a). Under the DWBRA and Fair Wage Law, au pairs are entitled to the state minimum wage and overtime pay at 1.5 times the hourly rate for “working time” over 40 hours per week. G.L. c. 151, § 1; 940 C.M.R. 32.03(3). An au pair’s “working time” includes all hours that the au pair is required to be on duty including meal, rest and sleep periods unless during those periods the au pair is free to leave the host family’s premises, use the time for their sole benefit and is relieved of all duties during these time periods. Id., 32.02. Host families are required to keep records of an au pair’s hours worked. Id., 32.04(2). The DWBRA also permits deductions for lodging and food, if agreed to in advance and in writing by the domestic worker, which are at a fixed credit amount of $35 per week for a single-occupancy room and $1.25 for breakfast, $2.25 for lunch, and $2.25 for dinner. Id., 32.03(5)(b)-(c).

Additionally, au pairs are entitled to at least 24 consecutive hours of rest when working 40 hours per week, workers’ compensation, sick time, and notice of why and when the host family may enter their living space.

The Litigation

In 2016, in response to enactment of the DWBRA, Cultural Care, Inc., a Sponsor au pair placement agency and two former Massachusetts hosts (“Plaintiffs”), sought declaratory and injunctive relief from the United States District Court claiming that the federal laws governing the Au Pair Program impliedly preempted Massachusetts wage and hour laws with respect to au pairs. The District Court found no preemption and dismissed the action, and Plaintiffs appealed.

The Plaintiffs claimed that the Au Pair Program preempted Massachusetts wage and hour laws under “field preemption” and/or “obstacle preemption.” Under “field preemption,”  Plaintiffs argued that the detailed regulatory scheme governing the Au Pair Program together with the federal interest in regulating immigration and managing foreign relations evidenced the federal government’s intent to “occupy the field” of regulation of au pairs, thereby preempting state laws and regulations that might otherwise apply to au pairs. 944 F. 3d at 22. Under “obstacle preemption,” Plaintiffs argued that compliance with Massachusetts wage and hour laws would create an obstacle to achieving the underlying purposes and objectives of the Au Pair Program by frustrating the federal intent to “set a uniform, nationwide ceiling” on compensation obligations and  recordkeeping and administrative burdens. Id. at 26-27.

The First Circuit rejected Plaintiffs’ arguments, concluding that Plaintiffs failed to sustain their burden of proving either field or obstacle preemption. The Court determined that Plaintiffs’ reliance on the DOS’s comprehensive and detailed regulations was insufficient to demonstrate a federal intent to oust a whole field of state employment measures, a “quintessentially local area of regulation.” Id. at 22.  Rather, the Court opined: “It is hardly evident that a federal foreign affairs interest in creating a ‘friendly’ and ‘cooperative’ spirit with other nations is advanced by a program of cultural exchange that, by design, would authorize foreign nationals to be paid less than Americans performing the same work.” Id. at 26.

The Court also rejected Plaintiffs’ obstacle preemption claim that enforcement of Massachusetts’ employment laws would frustrate a federal objective of establishing a nationally uniform compensation scheme for au pair participants. Noting that “the text of the au pair exchange regulations…does not supply the requisite affirmative evidence that the state law measures would pose an obstacle to the accomplishment of the purposes and objectives of the Au Pair Program,” the First Circuit concluded, “[i]n fact, the text of the regulations reflects the DOS’s intention to ensure that the regulations would accommodate the DOL’s [Department of Labor] determination that au pair participants are employees who are entitled to be protected by an independent wage and hour law that is not itself preemptive….[and] that the DOS contemplated that state employment laws would protect exchange visitor program participants from their employers.” Id. at 32-33 (underline in original).

What do host families need to know now?

It is not yet clear whether Capron will apply retroactively or whether Massachusetts host families will be liable for back wages for au pairs who were not compensated in accordance with state wage and hour laws. The Attorney General’s office has indicated that, “at this time,” its focus is on ensuring that au pair agencies bring their programs into compliance with Massachusetts laws and it does not intend to enforce the DWBRA or other wage and hour laws against host families.  The Attorney General’s office does note, however, that it has no control over private litigation.  As of the time of this writing, at least three putative class action suits and one other action, all by private individuals, have been filed in Middlesex Superior Court against several Sponsor au pair agencies.  No action has yet to be filed against any host families.

Andrea Peraner-Sweet is a partner at Fitch Law Partners LLP.  Her practice focuses on general business litigation with an emphasis on employment litigation as well as probate litigation.  Andrea is a  current member of the Boston Bar Journal.

Lauren D. Song is a Senior Attorney at Greater Boston Legal Services where her practice focuses on affordable housing preservation and development through public-private partnerships.  Lauren is a current member of the Boston Bar Journal.


Workers’ Rights Keep Pace With Corporate Practices: Recent SJC Decisions Expand Reach of Wage & Hour Laws

by Jocelyn B. Jones 

Case Focus

SONY DSCOnly 20 years ago, criminal prosecution was the sole means of enforcing the Massachusetts wage and hour laws. But the enforcement landscape has changed dramatically since 1993, when enforcement authority was transferred to the Attorney General’s Office from the former Department of Labor & Industries, and employees were authorized to initiate private lawsuits, in which those who prevailed were entitled to treble damages and attorneys’ fees, among other remedial measures. A further transformation took place in 1998, when the Attorney General was granted civil citation authority and monetary penalties for violations were enhanced, and with them, greater deterrence was set into play. The Legislature’s addition of these enforcement mechanisms in the 1990s increased  the development of wage and hour related case law, particularly at the appellate level. This rather dramatic expansion of case law in the wage and hour arena has accompanied the crystallization of the viewpoint expressed by the Massachusetts Supreme Judicial Court (“SJC”) that these legal protections are to be interpreted broadly, to ensure that the laws accomplish their underlying goal of guaranteeing that all workers receive their earned wages.  Consistent with this view, two recent SJC decisions underscore the expansive reach of the wage and hour laws’ protections.

LLC Managers & Wage Act Liability

In Cook v. Patient Edu, LLC, et al., the SJC addressed an issue of first impression about whether managers of a Limited Liability Company (“LLC”) may be held personally liable for violations of the Massachusetts Wage Act, M.G.L. c. 149, §148. A former employee brought suit in Superior Court against the LLC, as well as two of its managers, for unpaid wages. Relying on the statutory language and the express legislative purpose of protecting employees from long-term wage detention, the SJC concluded that “[b]ecause a manager or other officer or agent of an LLC…” may be a “person having employees in his service,” if he “controls, directs, and participates to a substantial degree in formulating and determining policy” of the business entity, he may thus be civilly or criminally liable for violations of the Wage Act.

Originally enacted in 1879, the Wage Act has been amended over the years to apply to both private and public sector employers. Among other provisions, the law requires that “[e]very person having employees in his service” must pay employees within the time limits specified within the statute. In addition, the statute expressly imposes liability on corporate officers and agents, as well as certain public officers. Cook’s managers pointed to these references and argued that because managers of LLCs are not specifically identified as employers under the Wage Act, in contrast to corporate or public officers, they cannot be held individually liable. But the SJC disagreed. The Court found that personal responsibility for Wage Act violations is not limited only to these particular categories of individuals. The SJC reasoned that the Legislature has merely provided examples of situations in which an individual may be deemed to be an employer. With that, the SJC remanded the case back to the trial court for further proceedings to determine what role the managers played and whether they were sufficiently involved with the LLC’s financial decisions to render either of them liable as a “person having employees in his service.”

This and other recent Massachusetts appellate decisions considering actions that may implicate workers’ rights under the wage and hour laws suggest that employers should consider that that courts are often likely to interpret statutory provisions in the light most favorable to workers. This reality, coupled with the prospect of individual liability, provides abundant motivation for business leaders to ensure that their employees are paid in full and on time.

Misclassification of Out-of-State Employees

Much has been made of the Massachusetts’ Employee Misclassification Law (or so-called Independent Contractor law), since its significant amendment in 2004. Today, the Massachusetts statute is arguably the most protective employment misclassification law in the country. The statute ensures that individuals who are properly classified as employees are afforded the protections intended for employees, including but not limited to timely payment of wages, minimum wage, overtime, as well as workers’ compensation, unemployment, the right to organize and nondiscrimination protections, i.e., statutory protections not available to independent contractors. Massachusetts has a history of leading the way in enacting laws that favor worker protections, and increasingly other states are following suit. Indeed, many state legislatures have either recently adopted misclassification laws very similar to ours or are currently considering doing so. A recent SJC decision highlights why all employers should be aware of this trend.

In Taylor v. Eastern Connection Operating, Inc., the SJC ruled that the Massachusetts Independent Contractor law applied to couriers who both lived and worked in New York while employed by a Massachusetts-based delivery company, Eastern Connection Operating.  The SJC found that these individuals, who neither live nor work in Massachusetts, are nevertheless entitled to the protections of the Massachusetts Independent Contractor law. How, you may ask, can that be? The decision rests on the “choice-of-law doctrine,” which considers, among other things, the parties’ expressed intent as to which state’s law will govern legal disputes between them and which state has the most stake in the outcome of an lawsuit.

In considering these factors, the Court made two key findings in the case:   1) the employment contracts between the company and the couriers demonstrated that the parties intended to apply Massachusetts law, and 2) because the laws of New York and Massachusetts concerning employment misclassification are quite similar, applying Massachusetts law would not undermine New York public policy. As the Court wrote:

“Under both Massachusetts and New York law, a purported independent contractor who does not enjoy sufficient independence from the hiring party is deemed an employee. States seek to protect workers by classifying them as employees, and thereby grant them the benefits and rights of employment, where the circumstances indicate that they are, in fact, employees. New York simply uses a different mechanism to effectuate this aim than does Massachusetts” (emphasis supplied.)

Importantly, the Court also noted that “where no explicit limitation is placed on a statute’s geographic reach, there is no presumption against its extraterritorial application in appropriate circumstances.” And here, the SJC found that the Massachusetts Independent Contractor law contained no such limitation. For these reasons, the court held that the Massachusetts law applied to the plaintiffs’ claims and that because the plaintiffs could ultimately be found to be employees under Massachusetts law, the Superior Court erred by dismissing their wage claims on the basis that they were independent contractors.

As other states’ misclassification laws continue to evolve to more closely resemble those of Massachusetts, the Taylor case suggests that employers should take care to ensure that they understand the effect of contractual choice of law provisions and that their in-state and out-of-state workers are properly classified. Massachusetts’ more formidable wage protections may well be within their reach.  And other states’ laws are helping them on their way.

The Cook and Taylor decision are but two of many important workers’ rights victories that have been handed down by the SJC over the past decade.  As case law in the wage and hour arena continues to expand, we can expect that the SJC will continue to interpret the law with an eye towards ensuring the goal of protecting workers’ rights so clearly central to the state’s wage and hour laws.

Jocelyn B. Jones is Deputy Chief in the Massachusetts Attorney General’s Office (AGO), Fair Labor Division, a position she has held since 2007. She has served as an Assistant Attorney General in the Division since 2000, and as Special Counsel for Fair Labor Policy since early 2013.

*  The Attorney General’s Fair Labor Division filed an amicus curiae brief on the behalf of the Plaintiff in the Cook matter.  This article represents the opinions and legal conclusions of its author and not necessarily those of the Office of the Attorney General.  Opinions of the Attorney General are formal documents rendered pursuant to specific statutory authority; this article is not intended to be an official Opinion of the Attorney General rendered pursuant to statutory authority.