DOL Introduces “PAID” ProgramMarch 13, 2016 Alert
Under the Payroll Audit Independent Determination (PAID) program, employers who uncover FLSA violations during voluntary self-audit can pay back wages.
Employers Are Invited to Self-Report FLSA Violations
On March 6, 2018, the US Department of Labor (DOL) announced that they are piloting a new voluntary program that enables employers to self-report potential FLSA wage violations. Under the Payroll Audit Independent Determination (PAID) program, employers who uncover potential FLSA violations during a voluntary self-audit would be permitted to pay all back-wages while possibly avoiding penalties and litigation expenses associated with violations under Federal wage and hour regulations.
The program, which is designed to appeal to both employers and employees, aims to facilitate resolution of potential violations without litigation while ensuring employees receive wages they are owed more quickly. The Wage and Hour Division (WHD) will operate the program and oversee all resolutions.
The program aims to help employers meet compliance requirements with the minimum wage and overtime regulations; it requires employers to review compliance assistance materials provided by the agency, self-audit pay practices and agree to proactively correct future pay practice issues. As part of the program, the WHD will not impose penalties or liquidated damages on employers who participate in the PAID program.
Employers currently in litigation or under investigation by the agency are not eligible to participate in the PAID program and the DOL will not permit employers to repeatedly use the pilot to resolve reoccurring violations. It is not yet clear how the program will interact with wage violation claims under various state laws, but the scope of the PAID program is clearly limited to the federal FLSA. Employers should use caution before agreeing to participate in any voluntary compliance program and should consult with their labor and employment counsel to determine whether this program may be beneficial to their organization.
The DOL anticipates that the pilot program will last for six (6) months. Additional details about the PAID program and FAQs are available here: https://www.dol.gov/whd/paid/.
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This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.