On March 6, 2018, the U.S. Department of Labor (“DOL”) issued a news release announcing a new pilot program that is designed to expedite resolution of inadvertent overtime and minimum wage violations under the Fair Labor Standards Act (“FLSA”). The pilot program is called the “Payroll Audit Independent Determination” (“PAID”) program. According to the DOL, it will ensure that more employees receive back wages they are owed – faster. Further, employees will receive 100% of the back wages paid, without having to pay any litigation expenses, attorneys’ fees, or other costs that may be applicable to private actions.

1. Payment Without Litigation

The DOL explained that 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.

2. Resolution Through Cooperation

Notably, the Division will not impose penalties for 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. Employers may not participate in the PAID program if they are in litigation or currently under investigation by the Division for the practice at issue. Employers likewise cannot use the pilot program repeatedly to resolve the same potential violations, as the program is designed to identify and correct potentially non-compliant practices. Settlements will be limited in scope to only the potential violations at issue.

3. Prospective Compliance Is Key

The program further requires employers to review the Division’s compliance assistance materials, carefully audit their pay practices, and agree to correct the pay practices at issue going forward. These requirements improve the employers’ compliance with their minimum wage and overtime obligations, which helps ensure employees’ rights are protected.

The DOL announced that the Division will implement the pilot program nationwide for approximately six months, after which it will evaluate the program and consider future options. The Division encourages employers to proactively audit their compensation practices to identify potential non-compliant practices. More information concerning the program is available at   To read more articles like this one, subscribe to the ALERT Newsletter today!