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March 7, 2018

Feds to help employers resolve OT and wage violations without penalty

The Wage and Hour Division of the U.S. Department of Labor has launched a new pilot program, the Payroll Audit Independent Determination program, which expedites resolution of inadvertent overtime and minimum wage violations under the Fair Labor Standards Act.

The PAID program will ensure that more employees receive back wages they are owed — faster. Employees will receive 100% of the back wages paid, without having to pay any litigation expenses, attorneys' fees or other costs that may be applicable to private actions.

The program also helps employers by facilitating resolution of potential violations, without litigation, and ensures employees promptly receive the wages they are owed. Under this program, the Wage and Hour Division will oversee resolution of the potential violations by assessing the amount of wages due and supervising their payment to employees.

Pilot to run six months

The U.S. Department of Labor stated in a news release that the Wage and Hour Division won't penalize employers who choose to participate in the PAID program and proactively work with the division to fix and resolve their potential OT and minimum wage violations.

However, the department added, employers may not participate in the PAID program if they are in litigation or currently under investigation by the Division for the practices at issue. Employers likewise cannot use the pilot program repeatedly to resolve the same potential violations, as this program is designed to identify and correct potentially non-compliant practices.

Settlements will be limited in scope to only the potential violations at issue. The program further requires employers to review the division's compliance assistance materials, carefully audit their pay practices, and agree to correct the pay practices at issue going forward. These requirements improve the employers' compliance with their minimum wage and overtime obligations, which helps ensure employees' rights are protected.

The Wage and Hour Division will implement the pilot program nationwide for approximately six months, after which it will evaluate the pilot program and consider future options. More information concerning the pilot program is available here.

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