The Department of Labor (DOL) is reviving a program that allows employers to self-identify and correct wage and hour compliance issues without incurring liability.
Why it matters: The program enables employers to proactively identify and fix potential compliance issues with the DOL’s assistance, without risking broader and more expensive liability. The program’s re-launch underscores the DOL’s commitment to compliance assistance and cooperative enforcement.
The PAID Program: The Payroll Audit Independent Determination (PAID) program, originally launched during the first Trump administration, encourages employers to voluntarily self-audit potential wage and hour violations under the FLSA and FMLA – such as unpaid overtime or minimum wage issues – and report findings to the DOL to resolve potential violations without broader liability.
Eligibility requirements include:
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No findings of liability for wage and hour violations within the last three years and no current DOL investigations.
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Disclosure of any pending complaints.
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No participation in PAID within the last three years.
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Program participation must not limit any employee’s rights or claims under applicable state or local laws.
If eligible, the DOL will provide settlement forms which the employer must complete – including full back pay and any other required remedies – within 15 days.
Pros and cons of participation: Participation in the PAID program can help employers avoid costly litigation, reduce exposure to broader liability, reach faster resolutions, and avoid additional penalties such as attorneys’ fees or damages.
However, risks remain:
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Employers may still face liability under other laws.
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DOL may reject an employer’s participation, potentially exposing the employer to greater scrutiny without the benefit of resolution.
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Information submitted through the program may be subject to disclosure under the Freedom of Information Act (FOIA).
