The U.S. Department of Labor (DOL) has introduced a new program to expedite payment to American workers. It is a national pilot program, the Payroll Audit Independent Determination (PAID) program, that will expedite resolution of inadvertent overtime and minimum wage violations under the Fair Labor Standards Act (FLSA). The FLSA is a federal statute that governs payment of minimum wage and overtime pay for nonexempt employees. The program began April 2018 and will run for approximately 6 months after which it will evaluate the pilot program and consider future options. If the employer is accepted as a PAID participant, the Wage and Hour Division (WHD) will evaluate the information submitted and enter into talks with the employer. Once WHD assesses the back wages due, it will issue a summary of unpaid wages. The WHD will also provide the employer with forms describing the settlement terms for each employee, which employees may sign to receive payment.
The program is designed to resolve unintentional violations discovered, reported and corrected by the employer. The division will not impose penalties or liquidated damages to finalize a settlement for employers who choose to participate in the PAID program and proactively work with the Division to fix and resolve their potential compensation errors. The program, however, does not bar an employee from pursuing his or her own claims for the unpaid wages, liquidated damages and attorney’s fees because it does not require employees to surrender any rights unless the employee accepts the amount calculated by the employer under supervision of the DOL.
The Department of Labor is encouraging employers to proactively audit their compensation practices to identify potential non-compliant practices.