DOL Ends Program Shielding Employers from Wage Theft Litigation and Penalties

The U.S. Department of Labor has discontinued its Payroll Audit Independent Determination (PAID) program, launched by the Department’s Wage and Hour Division (WHD) in 2018.

PAID encouraged employers to self-report minimum wage and overtime violations under the Fair Labor Standards Act (FLSA), submit a calculation of back wages, and agree to pay workers all back wages owed over a two-year period. In exchange, the program shielded reporting employers from additional liability. If an employer went through PAID, its employees were prohibited from taking any private action, such as a lawsuit, under the FLSA. The DOL also agreed to not seek liquidated damages (double the amount of back pay), interest, or civil penalties against the employer. PAID also helped employers avoid negative publicity by keeping reports and settlements confidential. The DOL even agreed not to investigate the underlying merits of the reported wage theft, limiting their investigations to a review of the employer’s back wages calculation.

With the end of PAID, the WHD appears to be returning to a more transparent and balanced enforcement standard for FLSA violations. Through a normal WHD wage theft investigation, the WHD can recover back wages, liquidated damages, and interest for workers. Employers can also be subject to civil penalties if violations are reoccurring or willful. And workers maintain the right to pursue private legal action for their wages and damages.

More details can be found at: https://www.dol.gov/newsroom/releases/whd/whd20210129.

For more information, please contact your labor law counsel.

By Kara Gordon | April 6, 2021

Legal Developments