For the past three years, the Department of Labor has been trying to get employees PAID for their unpaid overtime and minimum wages. That's PAID, as in the Payroll Audit Independent Determination program, a creation of the Trump administration that allowed employers to self-report FLSA violations to the Department of Labor without risk of litigation, enforcement proceedings, or liquidated damages.As of last week, however, the PAID program is history, as the DOL announced its immediate end.
"Workers are entitled to every penny they have earned," said Wage and Hour Division Principal Deputy Administrator Jessica Looman. "The Payroll Audit Independent Determination program deprived workers of their rights and put employers that play by the rules at a disadvantage. The U.S. Department of Labor will rigorously enforce the law, and we will use all the enforcement tools we have available."Pay close attention to that last sentence: "The U.S. Department of Labor will rigorously enforce the law, and we will use all the enforcement tools we have available." The era of federal agencies playing nice with employers through education and outreach is over. At least for the next four years, businesses should expect agency priorities to be enforcement, not education.
In the context of the FLSA, the question is not whether companies need to audit their wage and hour compliance, but whether they properly prioritize doing so before someone calls them on it. It is immeasurably less expensive to get out in front of a potential problem and audit on the front-end instead of litigating or settling a claim on the back-end. The time for companies to get their hands around these issues is now, and not when employees, their lawyers, or the DOL start asking the difficult questions about how employees are paid.
I've long provided a free employment practices audit for any company that asks. That offer still stands.