Overtime and Wage Errors Corrected with PAID Program

PAID Payroll Program | Correct Data | Ohio CPA Firm
The PAID program not only incentivizes employers to review their wage practices but provides compliance assistance, too. The primary goals of the program are to promptly resolve claims without litigation and boost employer compliance with overtime and minimum wage obligations. The program ensures that employees quickly receive 100 percent of any owed back wages without incurring any costs. Read on to learn more.

In an effort to encourage legal compliance from employers, earlier this year the Department of Labor (DOL) employed a nationwide “PAID program” through the Wage and Hour Division (WHD). Basically, the PAID (Payroll Audit Independent Determination) Program is a voluntary disclosure agreement in which employers work with the DOL to resolve and correct any errors or violations in regard to overtime and minimum wage under the Fair Labor Standards Act (FLSA). Due to the fact that the program has been well received by both employers and employees, the program has been extended through April 2019.

Read Also: The Future Of Overtime Compensation

The PAID program not only incentivizes employers to review their wage practices but provides compliance assistance, too. The primary goals of the program are to promptly resolve claims without litigation and boost employer compliance with overtime and minimum wage obligations. The program ensures that employees quickly receive 100 percent of any owed back wages without incurring any costs.

Under the program, employers are encouraged to conduct wage and overtime audits. If any violations are discovered, they should self-report those violations and work with WHD to correct any mistakes and expedite any back wages.

So how do employers go about this?

Determine If You Are Eligible To Participate In The Program.

Acceptance to the PAID program is at the WHD’s discretion, but participants must:

  • Be covered by the FLSA. Find out if you are covered here
  • Want to resolve any wage or overtime claims under the FLSA
  • Commit to future FLSA compliance
  • Prove employees included are not subject to various wage requirements
  • Not be in violation of FLSA, involved in any litigation or under any investigation
  • Continue to update WHD on any changes to the above information and/or representations

Employers can review information about the program and compliance assistance materials and apply on the PAID website.

Next Steps

If an employer is accepted, the WHD will inform them on next steps and how to submit the required information. Once it is confirmed that you will comply and participate in PAID, you must review all compliance assistance materials, which will help you understand the program and your wage and overtime obligations.

Employers must then audit their compensation practices for any non-compliant practices. If an employer identifies any potential claims to resolve, the employer must identify the violations, employees and timeframes affected, plus calculate the back wages. Then the WHD needs to be contacted in order to discuss any issues that need resolved. If any additional information is needed, the WHD will explain it, then evaluate all materials and discuss next steps. If wages are owed, the WHD will provide any settlement terms for each employee. Employers must pay all back wages by the end of the next full pay period and provide payment proof to the WHD. If an employer refuses to pay back the wages due, the WHD may use its enforcement authority to recover those wages.

While some states do not condone this program, the majority of the states are in favor of it and believe it is a win all around. Employees receive the wages they earn, and employers get help to resolve their noncompliance issues without any litigation with no payment other than the wages due. In addition, this is an effective and efficient use of taxpayer resources so the WHD can focus more attention on those who intentionally violate laws.

By: Dee Gray, CPP (New Philadelphia)

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