DOL Announces New Overtime Audit Program

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DOL WHD PAID audit overtime minimum wage Alabama Employment Law
The DOL’s PAID program hopes that voluntary audits will result in better compliance with overtime and minimum wage requirements.

On March 6, 2018, the United States Department of Labor’s Wage and Hour Division (“WHD”) announced a new, voluntary audit program aimed at improving employers’ compliance with overtime and minimum wage requirements.  The program is called the Payroll Audit Independent Determination (“PAID”) program.  Here is a link to the DOL’s question-and-answer sheet on PAID:  Coming Soon: PAID

At this point, details on the program are scarce.  It will be a pilot program for six months, after which WHD will evaluate its effectiveness.  All employers covered by the Fair Labor Standards Act (“FLSA”) will be eligible to participate.  Employers will self-audit their compensation practices and identify potentially non-compliant wage practices.  They will then identify the potential violations to WHD.  Potentially, employers can benefit from this program because WHD will not require them to pay liquidated damages or civil monetary penalties for any voluntarily-disclosed violations.

WHD’s Acting Administrator, Bryan Jarrett, wrote an op-ed for The Hill discussing the new program, and it can be found here:  PAID Program a Win-Win-Win.  One interesting aspect of Mr. Jarrett’s op-ed is his observation that current laws prevent “employers from simply paying the wages due to conclusively settle overtime or minimum wage violations.”  That statement correctly recognizes that the only way to conclusively settle an FLSA claim is through litigation and a settlement in which a Judge finds the settlement fair and reasonable for the employee.  Rather than facing the issues arising from such suits, some employers simply refuse to pay money legally owed to an employee.

As with any new area of the law, the devil is in the details.  I will keep an eye out for details on the PAID program as they emerge, and attempt to keep you up-to-date.

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