Posted on 04/04/2018 at 11:38 AM by Mike Staebell
On April 3, 2018 the US Department of Labor announced the immediate start of its “Payroll Audit Independent Determination” program, known by the acronym PAID. Last month, Wage & Hour Watch blogged about this six-month pilot program designed to facilitate resolution of potential overtime and minimum wage violations under the Fair Labor Standards Act (FLSA).
According to the DOL, the program’s primary objectives are to resolve FLSA violations expeditiously and without litigation, to improve employers’ compliance with overtime and minimum wage requirements, and to ensure that employees timely receive the back wages they are owed.
Under the PAID program, employers conduct self-audits and report FLSA violations they find to DOL’s Wage and Hour Division (WHD). If accepted into the PAID Program, employers then work with WHD to correct the violations and to pay 100% of the back wages due to affected employees. Resolution of violations under the PAID program include WHD supervision of back wage computations and payment, including the use of WHD-issued release/receipt forms. Employers thereby obtain official DOL approval of the settlement providing for the payment of back wages. Employees who sign the DOL forms and accept the back wage payments release their FLSA rights to privately sue the employer for the unpaid wages.
For more information on the PAID program, check out Wage and Hour’s PAID web page here.
DOL has added details about the program to its PAID website, but unanswered questions remain. As noted in our March blog, the PAID program has pros and cons for employers. As we await more information from DOL, at this point it is worth considering the advantages to employers who conduct self-audits to determine their FLSA compliance status. Such measures can put an end to FLSA violations and limit the firm’s back wage liability without the downside of having a WHD Investigator on site. Even if the employer elects not to participate in PAID program, a well-conducted self-audit still minimizes the odds of being assessed liquidated damages and civil money penalties by WHD.
To get the most benefit and to ensure correct application of the law, it is always advisable to consult an Employment & Labor Law professional before embarking on any FLSA self-audit, whether or not it involves WHD and the PAID program.
The material in this blog is not intended, nor should it be construed or relied upon, as legal advice. Please consult with an attorney if specific legal information is needed.