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Bill Would Allow Employers to Self-Audit and Correct Potential Fair Labor Standards Act Violations

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Authors: Chatrane Birbal

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Representative Elise Stefanik (R-NY) and Senator Mike Braun (R-IN) reintroduced the Ensuring Workers Get PAID Act this week.  

Background: In March 2018, the U.S. Department of Labor launched the PAID pilot program to provide an efficient method for employers to proactively rectify inadvertent overtime and minimum wage violations under the Fair Labor Standards Act (FLSA). The PAID program encouraged employers to conduct payroll self-audits and voluntarily self-report to DOL any FLSA wage and hour violations that were discovered in order to quickly resolve claims and improve compliance moving forward. If self-reported and corrected by paying 100 percent of the back wages that are owed, employers were then protected from litigation and penalties for their potential FLSA violations. The program resulted in employees receiving back wages in a more timely manner, as opposed to traditional DOL investigations that generally take more time and are more costly. Despite the program’s success, the PAID program was discontinued by the new administration in January 2021.  

The Ensuring Workers Get PAID Act would resume the PAID program to allow employers once again to proactively correct any mistakes without the threat of violation, litigation, negative publicity and assist in continuing to affirm positive employer-employee relationships. HR Policy Association supported this proposal in the last Congress and plans to support the bill this Congress once again.  

Outlook: With Republican control of the U.S. House of Representatives, and with Chairwoman Virginia Foxx (R-VA) at the helm of the House Education and Workforce Committee, the PAID Act is likely to pass out of committee and the House chamber. However, the bill is likely to stall in the Democratic majority Senate.


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