DOL Announces Pilot Program to Test Voluntary Reporting of Wage Violations

The Department of Labor’s Wage and Hour Division (WHD) announced on March 6 that it was preparing to unveil a new pilot program aimed at encouraging employers to voluntarily report and resolve “inadvertent” violations of minimum-wage and overtime laws under the Fair Labor Standards Act (FLSA).

The new program — known as Payroll Audit Independent Determinations (PAID) — provides a framework “to resolve such claims expeditiously and without litigation, to improve employers’ compliance with overtime and minimum wage obligations, and to ensure that more employees receive the back wages they are owed — faster.” Employers who participate in the program and proactively work with WHD to resolve any issues with their compensation practices and pay 100 percent of back wages due will not be required to pay liquidated damages or civil monetary penalties.

Employers are not eligible to participate in the program, however, if the issues they are seeking to resolve are already under investigation by WHD, currently being litigated in court or arbitration, or the employee’s counsel has already made clear they have an interest in litigating or settling the issue. Furthermore, the program is voluntary for employees, who can decide whether or not to accept the payment of back wages resulting from a self-audit. Any employee that chooses not to accept payment of back wages has the right to sue the employer in private right of action.

The program is expected to launch in April and will last for six months, after which WHD intends to review effectiveness and determine next steps. We will be following these developments closely and continue to provide relevant updates as they come in. In the meantime interested individuals can explore a fact sheet and FAQ documents.