Department of Labor (DOL) Announces a Six Month Pilot Program to Resolve Potential Wage Hour Claims

 

On March 6, 2018 the DOL announced a pilot program designed to more expeditiously resolve wage and hour claims without any party resorting to costly and time-consuming litigation.  The program is called the Payroll Audit Independent Determination (PAID) program, and involves the Wage and Hour Division (WHD).

Any employer who is covered under the Fair Labor Standards Act (FLSA) is eligible to participate in PAID.  Generally, employers with at least $500,000 in annual revenue or that engage in interstate commerce (e.g., orders involving parties in other states) are subject to the FLSA.

A quick resolution approved by the DOL/WHD is advantageous to employers and employees.  Further, a resolution under the PAID program reduces the likelihood that the WHD would assess additional costs against the employer, including liquidated damages and other civil monetary penalties.  Employers will still be liable to pay all back wages.

Here is an overview of the steps to take:

  1. The employer should conduct an internal audit of potential instances of non-compliance with the wage and hour laws. Existing WHD notices of, or investigations of, wage and hour non-compliance are not eligible for the PAID program.
  2. The employer identifies the possible employees affected.
  3. The employer identifies the timeframes involved.
  4. The employer contacts the WHD for determination of whether the matter will be handled under the PAID program.
  5. If the matter will be handled under the PAID program, the employer must provide detailed documentation to the WHD, and deliver certain certifications.
  6. The WHD will review the information and make a determination of non-compliance.
  7. The affected employee has the choice to accept the determination, and resolve the non-compliance claims. The employee may reject the offer, and pursue a wage claim against the employer.
  8. Any settlement will be limited to the specific instances of non-compliance and timeframes. The employee must be paid 100% of the back wages.
  9. Employers must pay all back wages due by the end of the next full pay period after receiving the summary of unpaid wages, and provide proof of payment to WHD expeditiously.

Do not hesitate to contact Beard Kultgen Brophy, Bostwick & Dickson, PLLC for assistance with the PAID program.