Pay Violations and the DOL’s PAID Program

The U.S. Department of Labor’s wage and hour division recently released new information about its Payroll Audit Independent Determination program, which facilitates the resolution of potential overtime and minimum-wage violations under the Fair Labor Standards Act.

According to the DOL site, the program’s primary objectives are “to resolve such claims expeditiously and without litigation, to improve employers’ compliance with overtime and minimum-wage obligations and to ensure that more employees receive the back wages they are owed–faster.”

Under the PAID program, employers are encouraged to conduct audits and, if they discover overtime or minimum-wage violations, to self-report those violations. Employers may then work in good faith with WHD to correct their mistakes and to quickly provide 100 percent of the back wages due to their affected employees.

In order to be eligible to participate in the PAID program, an employer must be able to certify the veracity of the information identified below:

  • That the entity is an “employer” covered by the FLSA.
  • The employees included in the proposed self-audit are not covered by any federal prevailing wage laws, such as the Davis Bacon Act, the Service Contract Act, prevailing wages established by executive orders or under various immigration visa programs.
  • The pay practices that are the subject of the proposed audit cannot be the same pay practices that:
    • Either the WHD or any court of law, within the last five years, has found to be a violation of the FLSA’s minimum-wage and overtime provisions;
    • Are currently being litigated, to which the employer is a party to the litigation;
    • Are currently being investigated by the WHD;
    • Are the subject of recent complaints made by the company’s employees or made on the employees’ behalf by representatives to: (a) the company and its representatives, (b) the WHD or (c) state wage-enforcement agencies, about which the company specifically has knowledge of or is aware; or
    • Were addressed by the company in a previous PAID program submission.
  • The company has a continuing duty to update WHD on any changes to any of the previously identified information.

According to an analysis of the new program posted by attorneys at Littler, employers will be able to use PAID to settle any back-wages issues without paying damages or costly legal fees:

“Absent unusual circumstances, employers will pay 100 percent of back wages for two years, but no liquidated (double) damages or civil-money penalties with substantial attorney-fees savings. Although employees may decline the back wages and not sign the WHD waiver form, most will accept the back wages, leaving collective actions unlikely.  Nonetheless, participating in the program presents some risk and should not be undertaken without guidance from your attorney.”

To see more information on the PAID program’s eligibility and participation requirements, click here.

Michael J. O'Brien
Michael J. O’Brien is former web editor with Human Resource Executive®.