DOL Ends Safe Harbor PAID Program

On January 29, the Wage Hour Division of the United States Department of Labor announced the immediate end of its Payroll Audit Independent Determination (PAID) Program. The program, initiated in 2018, provided a safe harbor from civil penalties for wage/hour violations to employers that agreed to self-report concerns and to participate in an agency-guided resolution process.

In its press release announcing the decision, the DOL suggested that the program disadvantaged workers by depriving them of penalties and damages under the law and allowed employers to “avoid accountability” for violations. The DOL further warned that, moving forward, it “will rigorously enforce the law.”

In itself, the end of the PAID Program will not have a dramatic impact on employers. Very few employers took advantage of the program, and many questioned the value of a program that required employers to voluntarily concede violations of the law to a government agency. However, the end of the program, and the rationale for doing so, signal that the Biden Administration will focus more on enforcement than education and that employers may see an increase in DOL audit activity.

Employers with questions about their compliance with the wage and hour laws are strongly encouraged to contact the attorneys at Employer Council to explore ways to protect themselves from enforcement actions.