Employers who would like to work with the Department of Labor to correct potential wage and hour violations before they get sued may get their wish: the DOL has launched a Payroll Audit Independent Determination (PAID) program. The agency has invited all employers covered by the Fair Labor Standards Act to consider participating in this six-month pilot program. However, is it worthwhile?
To participate in PAID, the DOL still requires the employer to undertake its own internal assessment of its compensation practices and how those practices have been applied to employees. For instance, if an employer suspects that employees have worked off the clock, the employer first must determine: (i) which employees are affected; (ii) the time period for which the employees’ hours are short; and (iii) the amount of back wages owed to the affected employees. Then, prior to making payment, the employer submits the information for each such violation to the DOL for the agency to determine whether it agrees with the calculations. The agency will examine the employer’s records to verify the information and the calculations submitted, and review whatever other information it deems necessary to confirm the back wages due, and then issue a summary of unpaid wages. Employers will need to have their checkbooks ready, as all back wages must be paid by the end of the next full pay period after receiving the summary of unpaid wages. Continue Reading