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DOL Launches Pilot Program Allowing Employers to Resolve Payroll Errors Without Fees or Penalties

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On March 6, 2018, the Wage and Hour Division of the U.S. Department of Labor (WHD) announced a pilot program designed to expedite resolution of payroll errors.  Dubbed with the convenient acronym PAID, the Payroll Audit Independent Determination program will allow employers to correct inadvertent overtime and minimum wage violations without having to pay fees, fines, or liquidated damages. 

Under the PAID program, employees will receive 100 percent of the back wages owed.  Employers – and employees -- will be spared any litigation expenses, attorneys’ fees, or other costs that may be applicable to private actions. WHD will assess the amount of wages due and supervise payment to employees. No penalties or liquidated damages will be imposed on employers who participate in the PAID program, self-report errors to WHD, and agree to future compliance.  (The program is not open to employers currently being investigated or engaged in litigation.) 

WHD is implementing the pilot program nationwide for approximately six months, after which it will evaluate the results and decide whether to make it permanent.  Employers are encouraged to audit their compensation practices to identify and correct potential non-compliant practices. 

COMMENT:  PAID is an example of how DOL can be a compliance partner, not just an adversary to employers.  “Good faith” traditionally allowed employers to avoid liquidated damages where inadvertent errors were made.  The prospect of attorneys’ fees often makes FLSA cases an expensive “gotcha” for employers and an impediment to settlement:  PAID should help short-circuit the litigation lottery, getting employees made whole sooner without letting their attorneys get fat in the process.

More information concerning the pilot program is available at www.dol.gov/whd/paid

Questions?  Need more information?  Contact Larry Stine (jls@wimlaw.com) or call 404-365-0900.

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