Hey Compliance Warriors!
FLSA litigation can take forever it seems. The Wage and Hour Division is testing a program called The Payroll Audit Independent Determination program (PAID). PAID is a new pilot program that’s being tested for 6 months hoping to speed up the process. Read on for more information…
Article via: www.mondaq.com
“PAID should be welcome news for compliance-minded employers. In the vast majority of cases, FLSA claims must be resolved through litigation or under WHD’s supervision. Given the proliferation of FLSA litigation, many employers have, in recent years, conducted proactive audits with legal counsel to ensure compliance with the Act. Oftentimes, employers who identified past issues through those efforts were reluctant to approach an enforcement-happy WHD to request supervision of back wage payments due to concern that doing so would trigger litigation. Employers were stuck between a rock and a hard place.
By providing a mechanism for proactively resolving wage-hour issues without the need for litigation, the PAID program should increase the incentive for employers to conduct formal audits of their wage-hour practices.
While we expect details on the PAID program, including an official launch date, to crystallize in the weeks to come, the WHD has already provided guidance on the contours of the program. According to WHD, an eligible employer who wishes to participate in the program must:
- Specifically identify the potential violations,
- Identify which employees were affected,
- Identify the timeframes in which each employee was affected, and
- Calculate the amount of back wages the employer believes are owed to each employee.
The employer must then contact WHD to discuss the issue(s) for which it seeks resolution. Following that discussion, WHD will inform the employer of the manner in which the employer must provide required information, including:
- Each of the calculations described above—accompanied by evidence and explanation;
- A concise explanation of the scope of the potential violations for possible inclusion in a release of liability;
- A certification that the employer reviewed all of the information, terms, and compliance assistance materials;
- A certification that the employer is not litigating the compensation practices at issue in court, arbitration, or otherwise, and likewise has not received any communications from an employee’s representative or counsel expressing interest in litigating or settling the same issues; and
- A certification that the employer will adjust its practices to avoid the same potential violations in the future.
At the conclusion of the process, the employer must make back wage payments. That process may look similar to the end of a WHD investigation in which violations are found. If an employee accepts the back wages, she will waive her rights to a private cause of action under the FLSA for the identified issues and timeframe. An employee who chooses not to accept the back wages will not be impacted.
We will share more as additional information becomes available.”
For more information visit:
http://www.mondaq.com/unitedstates/x/680646/Employee+Benefits+Compensation/Tired+Of+Waiting+For+FLSA+Litigation+Meet+PAID+WHDs+Pilot+Program+For+Proactive+EmployersUntil Next Time, Be Audit Secure!
Lisa Smith
