Recently, the issue of au pairs and fair wages has been circling in the national media. The issue was raised as a result of Greens leader Richard Di Natale’s faux pas when he was caught out underpaying his au pair that stayed with his family, while campaigning on the issue of protecting workers penalty rates. Families engage au pairs not businesses. Consequently, many people are confused as to whether their au pairs are employees or not, and whether they owe them the same benefits as employees of a company would receive. Below, we set out the obligations employers have towards their au pairs.
What are Au Pairs?
In the US and the UK, an au pair is not an employee. Governments there have established a scheme whereby young people can visit their country of choice and earn some spending money in exchange for providing child-minding and domestic jobs for a family. The spending money is referred to as pocket money or a weekly allowance rather than a wage or salary. However, no such system exists in Australia and young people visiting Australia as an au pair must come on a working holiday visa.
Many families use au pairs as an alternative to hiring nannies or putting their children in afterschool care. As a result, the focus on the cultural exchange factors that may have existed for au pairs and host families in the past has diminished and become a cheaper childcare alternative for a lot of people. Young travellers too are more likely to think of the engagement as a job to assist with their travel expenses, rather than focusing on the cultural exchange aspect. We turn our attention below to some of the key employment law issues that you should be aware of before engaging an au pair.
Many people perform work from home and within the community on an informal and unpaid basis, and are not considered employees. While this type of work or volunteering may attract other regulations, employment law is typically only concerned with the performance of paid work.
Parties usually arrange paid employment through an agreement or contract. An employment agreement or contract will at the very least include terms describing the job in question, the tasks the employee is expected to perform and their wages or rate of pay.
While in some countries, regulations specifically exclude au pairs from being considered employees, this is not the case in Australia. Where a family and au pair come to an agreement on the job and tasks involved, and how much they will pay the au pair, then he or she is arguably an employee by verbally agreeing to terms, even if the parties do not reduce them to writing. So, if an au pair is an employee of the family, what will that mean in regards to minimum wage, superannuation and other entitlements that Australia’s employment law and Fair Work standards guarantee workers.
National Employment Standards
The primary legislation that covers workers entitlements in Australia is the Fair Work Act 2009 (‘the Act’). The Act includes ten standards known as the National Employment Standards (‘NES’), which set out the minimum entitlements on which all employee contracts are based. They cover issues such as maximum working hours per week, leave entitlements, notice of termination and redundancy, among others. Although the NES applies to Australian employees, casual employees do not receive the same entitlements under the NES as permanent employees.
If an au pair were recognised as a casual or permanent employee, they would be entitled under the Fair Work Act to minimum entitlements such as paid annual and personal leave. In reality, it is unlikely that an au pair may need to use the majority of the entitlements the NES guarantees. A failure to provide an employee with one of these entitlements, however, amounts to a breach of the NES and could result in the employer receiving a monetary fine. When setting out the terms under which an au pair will provide their service, it is important to ensure you address the NES. You can find more information at www.fairwork.gov.au including a copy of the Fair Work Information Statement, which you must provide to all employees.
Although minimum wage is not set out in the NES, the Fair Work Act contains a separate provision for a national minimum wage for award-free employees. The current national minimum wage for a permanent employee is $17.29 per hour or $656.90 per 38 hour week. Employees covered by an award will have their minimum wage set out within the award. Casual employees will also receive at least a 25% casual loading on top of this instead of the entitlement to paid leave. For employees who are younger than 21 years old, who an award or enterprise agreement does not cover, the minimum wage is based on a scale starting at 36.8% for 16-year-olds and increasing to 97.7% for a 20-year-old.
Au pairs receive room and board as part of the arrangement with their host family. Families should use the cost of providing a room and board along with their wage and hours of work to determine the au pair’s overall weekly or monthly wage. Although many au pair agencies choose to refer to an au pair’s pay as an allowance or pocket money, it is still considered a wage and as such must comply with minimum wage requirements.
Under the Superannuation Guarantee (Administration) Act 1992 and the Superannuation Guarantee Charge Act 1992, an employer is required to contribute a percentage of any employee’s earnings into a complying super fund. There are a number of exceptions to this requirement which may be relevant to employers who engage an au pair. These exceptions include where the employee does primarily private and domestic work for 30 hours a week or less.
The services provided by an au pair will typically fall into the category of private and domestic work, however if they work more than 30 hours a week, their employee will be required to contribute an additional 9.5% of their wage into their super fund. Workers who earned super while visiting Australia on a temporary visa may be eligible to claim the super once they return home and their visa has expired or been cancelled. See www.ato.gov.au for more information.
We have set out some of the points that you should consider when hiring au pairs. While a regulatory scheme specifically excludes au pairs from classification as employees in the US and the UK, there is no equivalent scheme in Australia. Therefore, it is possible that au pairs in Australia are considered employees under the law. Australian employment law includes certain minimum standards for all employees, which you should be aware of before you hire an au pair.
Note that there are some other issues associated with hiring au pairs, such as tax obligations, which we have not touched on in this article. If you’re thinking about hiring an au pair and have any questions about your obligations as an employer, get in touch with our employment team on 1300 544 755.
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