DOL’s PAID Program Will Launch in Early April

 

Allen Smith, J.D. By Allen Smith, J.D. March 28, 2018
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​A Department of Labor (DOL) program designed to help employers settle overtime and minimum wage violations will launch April 3, the DOL has told Politico. The Payroll Audit Independent Determination (PAID) program, announced March 6, is a pilot program that will last six months from the launch date.

We've rounded up the latest news on the PAID program, including articles that highlight the pros and cons of participating in it. Here are SHRM Online resources and news articles from other trusted media outlets.

Worker Advocates Skeptical of Program

Secretary of Labor Alexander Acosta is a proponent of the program, which he has testified before Congress will give employers more of an incentive to settle because they won't face "liquidated damages"—double damages. But worker advocates say the program will undermine enforcement of the Fair Labor Standards Act (FLSA).
(Politico)

Proceed with Caution

Some employment attorneys believe employers should proceed with caution before participating. There are unanswered questions about the program. For instance, if an employer is audited in the future, will new violations be deemed repeat violations resulting in penalties? Also, if an employer uses the PAID program to resolve similar violations in the future, assuming the program is in place then, it's unclear if this means the department will refuse to allow program participation and instead conduct an audit.
(Lexology)

Other Cons

There are other potential cons with attempting to participate in the program: After violations are disclosed, the DOL does not have to accept the employer into the program; if individual employees decline a settlement payment, the workers may sue; and state law claims may survive the DOL settlement.
(LR Workplace Defender)

[SHRM members-only toolkit: Complying with U.S. Wage and Hour Laws and Wage Payment Laws]

Win-Win?

Bryan Jarrett, acting administrator for the DOL's Wage and Hour Division, has called the program a win for companies and workers. Wage and hour laws "preclude employers from simply paying the wages due to conclusively settle overtime or minimum-wage violations. Fearing full-scale federal investigations or costly litigation, employers may choose not to address the violations at all—resulting in losses to employees, employers and taxpayers," he has written. The PAID program rectifies that problem, according to Jarrett.
(The Hill)

Many Employer Attorneys Welcome Program

The PAID program presents employers with a "huge opportunity" to voluntarily correct FLSA violations, according to Robert Boonin, an attorney with Dykema in Ann Arbor, Mich., and Detroit. The clock will soon be ticking on the pilot program though, and it's uncertain whether it will continue beyond six months. So, Tammy McCutchen, an attorney with Littler in Washington, D.C., has recommended that "if employers want to participate, they need to get moving."
(SHRM Online)

 

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