What is AP's employment status? How much pocket £ in London?

[eversomuch]

I've started researching the possibility of having an au pair. I haven't found a clear explanation, though, of what the employment status would be. Is it like a nanny, where we'd be the employer? Or is it more casual? Are pocket money and accommodation subject to tax of some kind?

Very grateful to anyone who can explain or point me in the right direction.

I'm also curious to know how much pocket money/week or month people generally pay in London. (We're zone 3, ie 30-40 mins into central London), so we'd probably provide or contribute to an Oyster card).

Yes you are an employer (although some people will try to argue the other way, it wouldn't hurt to have a contract even if you weren't obliged to) but you don't need to deduct tax and NI unless they go over the threshold, which for a classic AP position in London is unlikely, as employment law and tax law are not exactly the same thing. The employment aspect is not complex at all - you just need to make sure house insurance includes employer's liability for domestic employees, make sure they get paid holiday/notice/etc and give them a contract. I'm happy to share mine as an example (usual disclaimers apply).

Rates are around £80-90/week - as you're offering accommodation there's no minimum wage as long as they live as part of the family. If you were to simply offer a room and they had to sort themselves for everything else you might be looking at accommodation offset but that shouldn't be the case.

Thanks, nom. That clarifies things nicely.

I did download the sample contract available on Au Pair World, but if yours differs significantly, I'd be happy to take a look and compare.

That said, we may be putting the AP idea on hold until the new year, so no rush. Thanks again!

They are usually not classed as employees, unless the following don't apply

www.gov.uk/au-pairs-employment-law

if they are employees, they are subject to minimum net wage which for an under 21 is £6.31/hour. However, you can deduct a max of £34.37 from their salary to cover live-in costs. So you would be paying £123.38 if they were in fact employees (for a 25 hour week).

If you're having a classic au pair - its fine to pay 80-90£. As non said if you're paying above £107 you need to add tax and register with HMRC.

That link is based on outdated information - the au pair scheme no longer officially exists which leaves au pairs without a specific status, defaulting them (particularly European citizens) to being an employee. It's currently being investigated for accuracy, so until they prove they're right if you want to be definitely within the law you need the follow Burnton's ruling in the High Court - which was upheld in Europe - that being an au pair providing a service as part of a cultural exchange does not prevent you from being considered part of the labour force for the purposes of the service you provide.

Nom - but if they are employees you need to offer minimum wage minus the allowed expenses. So you can't pay them £80-90 week for a 25 hour week. The min would be the £123 posted above.

Above, link seems to work still on gov.uk web site

I'd agree you need to do a contract anyway.

I think there is an exemption from minimum wage if you meet criteria of living as part of family as I think was pointed out earlier on thread -see here

But that's the same website that says that au pairs are not employees so if you're saying that doesn't apply anymore you would need to pay minimum wage minus the live - in allowance.

It's a very specific page on the direct.gov website. There is a well known (and backed up with precedent in case law) exemption for live in employees and NMW. What there isn't precedent for is au pairs being actively considered as NOT in an employment relationship. That's basically something the au pair agencies association invented based on the old au pair scheme, which means there is absolutely no mention of au pair as a specific immigration (unless you come from an A2 country under very specific circumstances) or not-employed status.

This is the Burnton ruling. Even the original wording of the au pair scheme implies employment because it excludes 'employment...other than as an au pair'. Although the point was immigration the entire purpose of the case hinged around whether being an au pair in general counted as employment. Although it was appealed the judgement was upheld and seeing as appeals can only be done on points of law that makes it a pretty watertight judgement.

Having spoken to DWP today - they pointed me in the direction of the gov.uk website, the au pair section of which was updated in May 2013. The burnton case was from a few years ago I believe. There was also a case in 2003 which upheld the case that au pairs were not employees, which is mentioned by the judge in the burnton case.

Counting them as employee when they are not makes things more difficult anyway. If you are counting them as an employee you need to pay NMW, have employers liability insurance, the new rules for non-contributable pensions come in force soon.

But you don't need to pay NMW - they live in. Most house insurance has ELI as standard and if they earn under the threshold pensions don't come into force, if they earn over the threshold...well that's where they really shot themselves in the foot by saying that tax and NI become payable over the threshold. There are 2 options then - they're employed and the employer deducts tax etc because that's what happens when you're employed OR they're self-employed and need to do a tax return. There just isn't another option for declaring earnings in this country.

I know what the DWP think, but Burnton has been upheld at tribunal since. Just because it's an old case doesn't diminish the precedent. There's also huge confusion because au pairs are specifically mentioned as being allowed to register with OFSTED as childcarers, which puts them on a par with nannies who are employed, and you start getting into the whole distinction between a nanny and an au pair. You can't do it by nationality, you can't do it by hours, you can't do it by duties, you're hard pressed to so it by attendance at language classes because you only have to look at MN to see how many au pairs don't.

They could sort it out so easily and no one would argue. In fact is fully support reintroducing a proper scheme with exemptions from certain rights and obligations, possibly capped earnings under the threshold, capped hours, the requirement to attend language lessons etc, possibly even a Govt sanctioned contract like many other countries have where all you have to fill in is your details.

The problem at the moment is saying they aren't employees but not saying what they really are and having absolutely no legal basis for it anyway is that an au pair can all too easily be exploited and can't go to anyone about it because there's no one to go to. So the au pair usually gets fed up and leaves and the family finds another one. It's crap all round and the Powers That Be have stitched themselves up because they've said this and can't prove it.

Even with live in nannies, given they could be working a 60 hour week or more with babysitting on top, then a live in nanny may be on less than NMW with accommodation offset.

So I feel that you should treat them like an employee, give them as many rights as possible as an employee would get but ignore NMW as they are living with a family, not in separate accommodation provided by the employer. Outbuildings, self contained flats, should not be used for au-pair accommodation as if they were used then the NMW rules I feel would apply, as it is not living with the family.

Without there being strict Government requirements about this, I feel you need to use common sense and do the best you can to provide for basic employment rights.

If things go wrong, would an au-pair take their host family to employment tribunal? I can't imagine that happening very often, so getting more case law on the are they/are they not an employee will take a long time.

I agree it could be sorted out very easily, but the bottom line is on the government website it says that au pairs are not employees.
Government creates legislation and judges merely interpret them.

Why would having a separate flat disallow someone from being an au pair as long as its in the employers home? Again the gov.uk webpage states that only most of its conditions need to apply for the person to be considered an au pair.

You can't pick and choose which parts of being an employee you would like to apply to you - either they are an employee or they aren't and if they are they should be getting NMW.

Our new au pair will be starting in March, she will have a separate flat in our home, she has asked for 4 weeks paid holiday a food allowance and £90/week, gym membership and a rail pass. All of which I think is fair and reasonable.

If flat is part of house and does not have council tax or tv license of its own then not a problem. If it does then it may complicate things if anything ever went to court but thats unlikely. Aupair will probably be glad to have somewhere that the children don't get access.

We pay our AP under the National Insurance Lower Earnings Limit so technically don't need to operate PAYE and do Real Time Information reporting to HMRC. However, we had to fire our latest AP for poor performance. As she had accrued holiday pay it pushed final weeks pay above the NI lower earnings threshold. Hence, we had to register as employers for the last payment!