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Employers Get PAID: But is DOL's New Program as Good as It Sounds?


When it comes to enforcement of the Fair Labor Standards Act (FLSA), the notion of a more employer-friendly Department of Labor (DOL) is quite foreign to human resources professionals. But with the agency's latest move, it seems like that is exactly what it is going for.

The DOL just announced a new pilot program called the Payroll Audit Independent Determination (PAID) program.

Employer benefits

Under PAID, employers would conduct a self-audit of its FLSA compliance and, if they discover wage-and-hour violations, come forward to the DOL to correct mistakes and provide back wages in an expedited manner.

The incentive for turning yourself in: Employers that voluntarily self-report and work with the DOL to take corrective action under the PAID program will not be subject to liquidated damages.

The DOL's Wage-and-Hour Division would oversee the program to determine the amount of backpay and oversee the companies' payments to workers.

In addition to self-auditing pay practices, the PAID program would require employers to accept compliance assistance and correct any practices that led to the problems.

To prevent abuse and protect employees, the DOL says the program will also have a number of safeguards included. It would also prevent repeat violators from using the PAID program.

Employee, DOL benefits

For employees, the program would ensure back wages are paid faster — without the hassle of drawn-out court cases or investigations.

They would also receive 100% of the back wages paid and would not ever have to worry about any additional expenses like litigation costs, attorney's fees or other costs.

From the DOL's standpoint, the PAID program would require only a fraction of the resources it normally uses to resolve FLSA investigations and lawsuits.

Of course, not everybody is so keen on this program. One employee advocacy group recently told the Wall Street Journal that the program essentially amounts to a "get out of jail free card" for employers.

Posted In: Fair Labor Standards Act (FLSA); Department of Labor (DOL)

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