The US Department of Labor (DOL) is once again offering a deal for employers: Audit yourself for potential wage-hour and family leave violations, then report yourself to the DOL and pay employees any back wages or other remedies they are due; in return, you can avoid costly litigation.
The DOL’s Wage and Hour Division (WHD) today announced it is relaunching its Payroll Audit Independent Determination (PAID) program, which was first rolled out in 2018 under the first Trump administration and then terminated in 2021 under the Biden administration.
“Self-audits are one of the most effective ways to build a culture of compliance and trust,” Deputy Secretary of Labor Keith Sonderling said. “These programs are designed to give employers, unions and benefit plan officials the tools they need to correct potential violations proactively. By empowering the regulated community with clarity and collaboration, we are continuing to fulfill the Department of Labor’s mission to put both workers and employers first.”
The original 2018 version covered only minimum wage and overtime violations under the Fair Labor Standards (FLSA). The reboot has been expanded to include violations of the Family and Medical Leave Act (FMLA) as well.
Employers may not participate if they have been found to have violated the FLSA or the FMLA in the past three years or if their pay practices are currently in litigation or under investigation.
An eligible employer must review FLSA and/or FMLA compliance materials and then audit its compensation practices. If an employer identifies potential claims it wants to resolve, it must provide the WHD information about potential violations.
If the WHD accepts an employer into the PAID program, it will provide the employer a proposed scope of the release of liability for the potential violations presented. In an email to Brightmine, the DOL confirmed that employers will not be assessed liquidated damages and civil money penalties if they resolve issues through the PAID program.
After WHD reviews the back wages due, it will issue a summary of unpaid wages to the employer. WHD also will issue forms describing the settlement terms for each employee, which employees may sign to receive payment. The employee may freely choose to accept or decline the payment. Employers must pay all back wages due within 15 days of receiving the summary of unpaid wages and provide proof of payment to WHD.
It should be noted that employers are not released from claims under state wage and hour laws. After the launch of the original PAID program in 2018, attorneys general for several states advised that they intend to “continue to prosecute labor violations to the fullest extent of our authority, both civilly and criminally, regardless of whether employers have participated in the PAID Program.”
