On March 6th the Wage and Hour Division (WHD) of the U.S. Department of Labor announced a new pilot program called the Payroll Audit Independent Determination ( PAID) Program. According to the DOL PAID is designed to expedite the resolution of “inadvertent overtime and minimum wage violations under the Fair Labor Standards Act “(FLSA).
Participation in PAID is voluntary. If an employer chooses to participate in the program and FLSA violations are discovered the WHD will not impose penalties or liquidated damages as part of any settlement. Instead, the employer will only pay the backpay owed to the employee or employees.
Employers may not participate in the program if they are in litigation (presumably involving the FLSA but the press release does not specify) or currently under investigation by the WHD for the wage and hour practices at issue. Participation in PAID also requires employers to review the WHD’s compliance assistance materials, carefully audit their pay practices and agree to correct the pay practices at issue going forward.
WHD will implement PAID nationwide for approximately six months and will then evaluate the program and consider future options. More information about PAID is available at http://www.dol.gov/whd/paid
For employers who believe they may have “inadvertent” violations of the FLSA participation in PAID may be a good option. But before you agree to invite the WHD into your place of business I recommend that you conduct your own audit of your compensation practices to identify any potential violations or areas of concern. We assist clients with self-audits frequently. Remember, an ounce of prevention is worth a pound of cure!