Three years ago, I floated the idea that perhaps an agency could come up with a modest “amnesty” program that would give employers a chance to get into compliance with FLSA laws, without facing the draconian consequences such an admission might entail.
Now, late yesterday, the United States Department of Labor announced its own pilot program doing exactly this.
It’s being called the “PAID” program (Payroll Audit Independent Determination), and is designed to expedite “resolution of inadvertent overtime and minimum wage violations under the FLSA.”
According to a press release:
Employees will receive 100 percent of the back wages paid, without having to pay any litigation expenses, attorneys’ fees, or other costs that may be applicable to private actions.
The PAID program facilitates resolution of potential violations, without litigation, and ensures employees promptly receive the wages they are owed. Under this program, the Wage and Hour Division will oversee resolution of the potential violations by assessing the amount of wages due and supervising their payment to employees.
The Division will not impose penalties or liquidated damages to finalize a settlement for employers who choose to participate in the PAID program and proactively work with the Division to fix and resolve their potential compensation errors.
But there will be limits. Employers who are in litigation or currently under investigation are excluded, for example. Moreover, it is a one-time use; employers can’t keep coming back under it. And it will require employers to take other steps as well.
The pilot program is being run nationwide for approximately six months, after which the Department will evaluate the pilot program and consider future options.
Employers and their counsel are going to need to do a crash course to learn about its availability. Some FAQ are available on the DOL website but there’s still more that needs to be filled in.
It’s clear, for example, that this won’t necessarily prevent a private lawsuit from flowing or from employees who might reject this and seek out their own counsel.
And for employers in Connecticut, a word of extreme caution: There will still be the issue of STATE law violations that aren’t addressed by this program.
Indeed, when I floated this idea with a CT Department of Labor official years ago, he noted that legislation would have to be written because the CTDOL didn’t have the ability to create such a program.
I will continue to monitor this as well as my firm but if you have any interest in FLSA issues, you’ll want to contact your employment counsel to stay up to date on this very important development.