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Getting PAID: new way for employers to address wage & hour violations

FLSA icon3 min read

HR professionals face tremendous pressure to process payroll on time and manage regulations. Under the Fair Labor Standards Act (FLSA), many employers and HR managers struggle to understand its nuances and complexities in the realm of compliance. It can be difficult to fully understand where employees fall under the rules, especially if they’re not properly classified. However, there may be another way to address wage and hour violations. A new program is roaming the halls of HR, and it’s called PAID, otherwise known as the Payroll Audit Independent Determination.

The WHD recently announced the national pilot program for employer self-audit of wage and hour violations under the FLSA. The PAID program aims to ease resolution of potential overtime and minimum wage offenses. Catered to employers, the program hopes to help correct wage and hour violations while limiting risk to pay additional damages and costs of litigation.

While PAID has its benefits…

Employers working under PAID are able to:

  • Correct minimum wage and overtime violations without litigation
  • Avoid costs of liquidated damages or civil monetary penalties when employer make payments for all back wages due
  • Execute limited release of violations identified under the FLSA after accepting payment under the PAID program

...critics see potential downsides too:

Employers are not able to:

  • Join the PAID program after violations are disclosed
  • Release any private right of action if employees choose not to accept payment
  • Exceed the scope of employee identified violations for the time period in which the employer is paying back wages
  • Avoid any future investigations that WHD chooses to conduct
  • Rely on data protection, which means information submitted to WHD could be available to employees who wish to pursue litigation

Starting in April 2018, the WHD will roll out the program nationwide for six months. In its finish, WHD will evaluate the results and determine next steps.