The U.S. Department of Labor recently announced the relaunch of the Payroll Audit Independent Determination ("PAID") program. PAID is a voluntary program that allows employers to self-identify and correct potential minimum wage, overtime, and certain FMLA violations before they become formal enforcement actions or private lawsuits.
To participate in PAID, an employer must be covered by the FLSA and/or the FMLA and must not be under investigation or a party to litigation over the same issues. Importantly, participating in the PAID program does not affect employees' rights under state or local laws.
The PAID program follows a four-step process:
- Employer Self-Audit – Employers review compliance materials; identify potential minimum wage, overtime, or FMLA violations; calculate the amount of back wages owed to each employee; and determine any other FMLA remedies that are necessary for compliance (such as recategorizing an unexcused absence as FMLA leave).
- Report to the Wage and Hour Division ("WHD") – Employers contact WHD to share their findings, calculations, remedies due, supporting evidence, and methodology. They must also submit a statement regarding the scope of the potential violations, and a certification that all program requirements have been met.
- WHD Review – WHD evaluates the submission, requests additional information if necessary, and provides guidance on next steps.
- Resolution and Payment or Other Remedies – WHD issues a summary of unpaid wages and settlement forms for each employee. Employees may voluntarily accept the settlement terms, which release only the specific claims identified under the PAID program.
Additional information about the PAID program is available here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
