DOL is Still Pushing Its Revival of the PAID Program

“In the words of one … official, it is like peeing in bed to keep warm. While it might feel good at first, it soon becomes messy and difficult to clean up.”

--Anonymous

In the on again, off again, world of government labor policy, we’ve written before about the so-called Payroll Audit Independent Determination (PAID) program, an initiative from President Trump’s first term of office, which was killed during the Biden years, but is now being revived. See https://www.awrcounsel.com/blog/2021/4/7/another-trump-era-program-fails-to-survive-the-administrations-transition?rq=PAID%20program  and https://www.awrcounsel.com/blog/2018/4/13/the-paid-program-under-the-flsa-everything-old-is-new-again?rq=PAID%20program.

Late this July, the Department of Labor (DOL) relaunched the PAID program. In a recent blog, DOL Deputy Secretary Keith Sonderling explained how DOL supervised self-audits “enable you to identify and fix potential violations, reduce the likelihood of litigation, and demonstrate a good-faith commitment to following the law. They also help ensure that workers get the protections and benefits they are entitled to — like timely wages, fair and safe working conditions, and benefits security.”

With PAID back in the saddle, DOL is spotlighting how employers can use the PAID program to engage with specific labor laws and regulations. PAID allows employers to do a voluntary self-audit under the PAID program and clear themselves from potential violations. The program is most closely associated with the Fair Labor Standards Act (FLSA), the federal minimum wage and overtime law, But employers can also self-audit their compliance with the Family and Medical Leave Act (FMLA), which provides for unpaid medical leave in specified circumstances.

Here is what DOL says you should do if you think your business may have violated the FLSA or the FMLA:

1.     Make sure you’re eligible

In order to participate in PAID, you must be covered under the FLSA or the FMLA. You can’t have any previous labor law violations from the past three years or not be a party to any litigation involving compensation practices. Please visit the PAID website to review other requirements and confirm that you’re eligible.  

2.     Review your pay and leave history

Once you establish that you’re eligible for PAID, you must review and complete our compliance checklist. The material is informative and brief, designed to give employers a detailed overview without taking too much time from their busy workday. After filling out the required material, you’ll receive a certificate, and the self-audit can begin.

3.     Contact us

During the self-audit, review your pay and leave history to identify FMLA and FLSA violations that may have occurred within the past two years, and the workers involved. Contact your local Wage and Hour Division office, and staff from the division will walk you through all the information and data you need. Once the division staff review the materials and determine whether you can conduct the self-audit, they will explain the specific details so you can return any unpaid back wages to employees without any further delay. 

DOL maintains that PAID is a great opportunity for employers to avoid costly penalties for proactively correcting non-compliance with complex labor laws. The pitch is made that “by signing up for the program and getting assistance from Wage and Hour Division staff who are eager to help, you will provide an invaluable service by protecting your employees, along with your business.” 

Whether that will be how the programs works in real life is yet to be determined. In the past, I have told clients to clean up their own mess, and usually not to involve DOL. The ramifications of bringing DOL into any self-audit need to be carefully considered, although it is possible that it could be helpful if the agency is willing to be business friendly, which isn’t something at least historically one could expect from DOL. I suppose that decision to try out the PAID program depends on whether you believe them when they say, “I am from the government and am here to help you.”