The U.S. Department of Labor’s Wage and Hour Division’s (WHD) Payroll Audit Independent Determination (PAID) pilot program is running from April through early October. In June, APA Government Relations staff met with the WHD to discuss the PAID pilot program. Under the voluntary program, employers perform an audit of their Fair Labor Standards Act (FLSA) practices and self-report minimum wage and overtime violations to the WHD. If the WHD and the employees agree with the assessment and the employer agrees to amend its practices going forward then the employer can settle the back wage dispute with the employees.
According to the WHD, advantages of PAID include that employers will not be subject to liquidated damages and civil monetary penalties and litigation is avoided. Employees will receive wages faster and will receive 100% of the amount owed, with assurances that the same violations will not recur.
After the pilot concludes in early October, WHD will evaluate whether to continue the program on a permanent basis or make any modifications.
State Violations Are Not Covered
The PAID program only applies to federal rules. Many states have minimum wage rates higher than the federal level. In early August, New York’s Attorney General filed a lawsuit against the DOL for failing to respond to records requests concerning the PAID program. The lawsuit follows a letter from the New York Attorney General and 10 other state attorneys general sent to the DOL Secretary claiming that the PAID program undermines state labor laws.
To learn more about federal and state laws, regulations, and information to keep your company's payroll operations in compliance, check out Payroll Source Plus!
