On March 6, the United States Department Of Labor launched a pilot program for employers to self-audit and correct minimum wage and overtime violations that are covered by the Fair Labor Standards Act. The program is called the Payroll Audit Independent Determination program, or PAID for short. It is overseen and administered by the Wage and Hour Division of the Department of Labor, and will be implemented for a six month trial period. Following the six-month trial period, the Wage and Hour Division will perform an evaluation to determine the program’s effectiveness.
The PAID program allows employers that are covered by the FLSA to enroll in the program to proactively correct any potential violations of the FLSA. The purpose of the program is to expedite the resolution of minimum wage and overtime violations without litigation (which saves the employer money). However, for employees, it may be an easy way for employers to escape paying the full amount of wages owed to employees for wage and overtime violations.
Are Employees Required to Participate in the PAID Program?
While the program is designed to encourage employers to comply with the FLSA, and it is employers that will initiate participation in the PAID program, the PAID program does not require an employee who is owed wages under the FLSA to participate in the program or to accept payment for wages owed by an employer. Therefore, an employees should contact an overtime lawyer before accepting back pay under the PAID program for minimum wage and overtime violations.
If an employee refuses payment for back wages owed by an employer for minimum wage and overtime violations, the employer is not allowed to retaliate against the employee. Accepting payment of back wages under the PAID program is completely the employee’s decision and one the employee should not accept until consulting with an overtime lawyer.
Additionally, refusing to accept payment under the program does not affect whether an employee can sue his or her employer in a court of law. Oftentimes, an employee is owed much more than can be recovered by the DOL and this new PAID program is no exception. Employees oftentimes recover much more by hiring an overtime lawyer, filing suit, and pursuing minimum wage and overtime violations through litigation.
What Happens if an Employee Accepts Payment Under the PAID Program?
If an employee decides to accept payment under the PAID program, the employee will only have to release the right to sue in court for the specifically identified violations for the time period that is at issue. For example, if an employer has failed to pay overtime violations for hours to an employee and pays the employee what he or she is owed for that violation under the program, an employee will still be allowed to bring a lawsuit against the employer for a different violation of the FLSA such as not being paid for ‘off-the-clock’ work. However, an employee should consult with an employment lawyer before accepting payment under the PAID program for an wage or overtime violation.
When can an Employer Not Use The PAID Program?
The PAID program is not always available to employers to resolve FLSA violations. If the employer is already being investigated for wage and overtime violations, the employer cannot use the PAID program to resolve the wage and overtime violations. Furthermore, an employer may not use the PAID program multiple times for the same violations of the FLSA.
Additionally, if an employee has already filed a lawsuit against the employer or has communicated to the employer that they are interested in settling the violation or litigating the matter, the PAID program cannot be used by the employer to resolve the violations.
The PAID program is meant to encourage employers to be proactive and to comply with the FLSA when an employer discovers that a violation has occurred. It is not meant to be used after and employee discovers that they have not been fairly paid as required by law. If you think you are being treated unfairly by your employer in the Fort Worth, Texas area, contact Herrmann Law to speak with an experienced employment law attorney about your situation.