U.S. DOL Announces New Payroll Audit Pilot Program

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On March 6, 2018, the U.S. Department of Labor (“DOL”) announced a new pilot program: the Payroll Audit Independent Determination (“PAID”) program.  The PAID program’s primary objectives are to expedite resolution of wage and hour claims, improve employer FLSA compliance, and facilitate payment of back wages owed to employees. The PAID program will be administered by the DOL’s Wage and Hour Division (“WHD”) and will be implemented for a trial period of six months.  At the end of the trial period, the WHD will evaluate the effectiveness of the program and determine if modifications are needed. The WHD has not yet announced when the program will start.

All FLSA-covered employers may voluntarily participate in the program, except those who are currently under investigation or engaged in litigation, acting in bad faith, or have committed repeat violations.  The PAID program is intended to help employers self-identify and correct non-compliant federal pay practices, such as misclassification issues, off-the-clock work, and failure to pay minimum wage or overtime. The PAID program may not resolve wage and hour violations of state law. If compensation issues are identified and employees voluntarily agree to resolve and release the specific wage and hour claims, employers must pay 100% of back pay owed, and may avoid liquidated damages, civil monetary damages, attorney’s fees, and other costs associated with litigation.

Employers interested in the PAID program can learn about how the program works and sign up for e-mail updates by visiting the WHD’s webpage.

Action Items

  1. Visit the DOL’s wage page on the PAID program here.
  2. Consult with legal counsel on how the PAID program may affect wage and hour violations.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2018 ManagEase

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