PAID program would ensure wages legally due to employees are received faster and without penalties
In 2018, the Department of Labor (DOL) introduced the Payroll Audit Independent Determination (PAID) pilot program. The program allowed small businesses to correct minor wage and hour violations without being penalized. The Ensuring Workers Get PAID Act of 2023 has been introduced in both the U.S. House of Representatives and the U.S. Senate to permanently establish a PAID program.
The PAID program was first launched in 2018 as a six-month trial for employers and employees to resolve Fair Labor Standards Act (FLSA) disputes. The program allowed employers to conduct self-audits of their payroll and self-report any violations they discover to the Wage and Hour Division (WHD). Employers then worked with WHD to correct their mistakes and provide any back wages due to the affected employees without incurring penalties. Unfortunately, the DOL ended the program on Jan. 29, 2021.
“The stakes are high when dealing with the Fair Labor Standards Act,” explained Elizabeth Milito, Small Business Legal Center Executive Director. “Enforced by the U.S. Department of Labor, noncompliance with the numerous requirements can result in expensive civil and criminal penalties. That’s time and money that you cannot afford to waste.”
Allowing small business owners the flexibility to correct unintentional errors is a step in the right direction to ensure fairness for both employees and employers. For employees, it helps to ensure that wages legally due back are received faster. For employers, this process effectively aims to resolve wage and hour claims quickly and without litigation or penalties while also improving employers’ compliance with the FLSA.
According to the Wage and Hour Division, 74 PAID pilot program cases were concluded between April 1, 2018, and September 15, 2019. This constituted less than 1% of all compliance actions and resulted in a total of $4,131,238 in back wages paid to 7,429 employees. The program averaged nearly 10 times more employees receiving back wages in each PAID pilot program compared to investigations utilizing traditional methods.
Take Action: Urge your Senators and Representatives to support the Ensuring Workers Get PAID Act of 2023.
