DOL Ends Self-Reporting Program for Wage And Hour Violations

The U.S. Department of Labor (DOL) has terminated its Payroll Audit Independent Determination (PAID) program that allowed employers to self-report federal minimum wage and overtime violations under the Fair Labor Standards Act (FLSA). 

The DOL made the announcement via press release on January 29, 2021. The PAID program was launched in March 2018 and quickly drew criticism. Attorneys general from 11 states sent a letter to the DOL protesting the move to allow employers to self-audit and self-report violations without requiring any penalties for the violations. 

Under the PAID program, employers that self-reported were allowed to submit their calculation of back wages owed to the DOL and agree to pay the outstanding back wages over a two-year period, after which the claim would be released. To further incentivize employers to participate in the program, the DOL agreed not to investigate the claim’s merits and limit its review to the accuracy of the back wages calculated by the employer. 

In the DOL press release, Wage and Hour Division (WHD) Principal Deputy Administrator Jessica said, “The Payroll Audit Independent Determination program deprived workers of their rights and put employers that play by the rules at a disadvantage. The U.S. Department of Labor will rigorously enforce the law, and we will use all the enforcement tools we have available.”

For the 2020 fiscal year, the WHD collected approximately $257 million in back wages, the lowest amount in five years. In 2019, the WHD collected $322 million in back wage and hour claims, a record for the agency.

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