On March 6, 2018 the Department of Labor launched a pilot program allowing employers to audit their own pay practices and catch and report their own wage and hour mistakes. It’s called the Payroll Audit Independent Determination (PAID) Program and will operate for six months as a pilot program.
Prior to now, wage and hour mistakes would land employers in court where they would have to pay court and lawyer fees, back wages, and liquidated damages. With the PAID program, if mistakes are caught independently and in good faith, employers can avoid the extra costs and simply pay employees back for the mistakes made.
Simplifying the process of wage and hour disputes is a win for everyone. It benefits the Department of Labor by allowing them to focus their resources on real offenders, and it benefits both employers and employees.
Benefits to Employers
Employers don’t have to feel like they’re walking on egg shells with wage and hour violations anymore. Before now, with no way to resolve violations outside of court, employers had to be very careful not to make any mistakes. If they did catch an error, they’d be better off ignoring it and hoping they didn’t get caught. Of course, that attitude doesn’t benefit anyone so the DOL is trying to solve that with this new program.
The program aims to be more efficient and less expensive for employers. It encourages employers to resolve issues outside of court, while working directly with the Wage and Hour Division to fix the errors.
Benefits to Employees
The program is clearly cheaper for employers but it benefits employees too. Employers will be able to pay their employees in a much more timely manner than would have previously been possible within the court system. And this is a huge benefit for employees because the longer it takes to get paid, the more hardship employees must endure. Keeping settlements out of court is a quicker process so employees get their money faster. They also will spend less time involved with the process and so can attend to the work and personal matters they might have missed while dealing with the court.
Employees may not be granted other monetary compensation with this program that they might see with a full court case. Employers that self-report and work with the DOL to resolve issues do not have to pay liquidated damages. This is one more way in which the program benefits employers but there is a trade off for employees. While employees won’t receive liquidated damages, they will always receive 100% of back wages and receive them in a much more timely manner.
Employees do not have to accept the terms of their employer’s offer. If the offering is not satisfactory, like say the employee suffered extreme hardship from the error and requires liquidated damages, employees are still free to take employers to court. The program isn’t intended to completely eliminate wage and hour court cases but it will reduce them.