On March 6, 2018, the Wage and Hour Division of the U.S. Department of Labor (WHD) announced a new pilot program: the Payroll Audit Independent Determination (PAID ). The PAID program is intended to expedite resolution of inadvertent overtime and minimum wage violations under the Fair Labor Standards Act (FLSA).

The PAID program launched on April 3, 2018 and employers covered by the FLSA have 6 months to participate.
Which employers may be interested in the program?

To be eligible to participate in the PAID program, an FLSA covered employer must be seeking to address potential violations of FLSA’s overtime and minimum wage requirements. PAID cannot be used to resolve claims that are already being investigated by the WHD or litigated. 

What does an employer need to do to participate in the program?

  • Conduct a self-audit to identify potential violations and employees affected
  • Identify the time-frames in which each employee was affected and calculate the amount of back wages the employer believes is owed
  • Self-report these issues to the WHD

What will happen next?

The WHD will require a participating employer to provide:
  • support explaining each calculation of back wages and explain the scope of the potential violations; and 
  • a certification that the employer has reviewed all requisite information and certifying that the employer is not already litigating the issue in court or arbitration, or has not been contacted by an employee’s representative or counsel expressing an interest in litigating; and
  • a certification that it will adjust its practices to avoid potential future violations. 

Should you participate in the amnesty program?

There are advantages and disadvantages of participating in the program. On the plus side, participating provides an opportunity to address potential violations efficiently without having to incur litigation expenses and while PAID requires payment of all back ages, the program will NOT impose additional payment of liquidated damages or civil monetary penalties. 

On the down side, participation does not immune employers from future wage and hour investigations; it does not require employees to waive their rights or accept the employer’s offered payment (exposing the employer if an employee decides to pursue litigation). In addition, the program only covers federal wage and hour violations and not state/local law.

NFC will continue to monitor the status of the PAID program and keep you up to date as new information is released.

If you have any questions or would like to discuss whether the PAID program is right for your Company, please contact the NFC attorney with whom you normally work or Diane Sugrue, Esq
Employment Law Solutions That Work.
This publication/newsletter is for informational purposes only and does not contain or convey legal advice regarding any specific situation. This material may also be considered attorney advertising under court rules of certain jurisdictions.