This year has been a year for changes and flexibility in the workplace—particularly with respect to wage and hour practices. On January 1, the overtime threshold under the Fair Labor Standards Act (FLSA) increased to $684 per week, or $35,568 per year. Since then, challenges brought on by COVID-19 have spurred many changes in the workplace, and raised questions of compliance with traditional wage and hour laws.
The U.S. Department of Labor invites you to participate in the Payroll Audit Independent Determination (PAID) program, which expedites resolution of inadvertent overtime and minimum wage violations under the FLSA. The PAID program is overseen by the Department’s Wage and Hour Division (WHD), which is responsible for administering and enforcing some of the nation’s most comprehensive federal labor laws, including the FLSA.
In a typical investigation, WHD’s investigators evaluate an employer’s compliance with the laws WHD enforces. When FLSA violations are found, WHD has various enforcement mechanisms, including, but not limited to, recovering up to three years of back wages, liquidated damages (double amount paid to the employees), and civil money penalties (fines paid to the government).WHD collected a record-breaking $322 million in back wages from investigations conducted in Fiscal Year (FY) 2019, including $226 million from FLSA violations.
Some municipalities, local governments, and state governments engage in compensation practices that do not comply with the FLSA. In FY 2019 alone, WHD collected $29 million in back wages from investigations of municipalities, local governments, and state governments. Now is the time to reflect on your practices and ensure you are in compliance. The PAID program, which has helped 36 public employers come into compliance thus far, is a great resource to assist you.
If you find that you are out of compliance, you may conduct a self-audit under the PAID program. Under PAID, employers who proactively conduct a self-audit and work with WHD to resolve any inadvertent violations are able to pay their employees 100 percent of the back wages they were owed, but were not paid due to the employer’s inadvertent mistake. Employers who participate in good faith will not be subject to civil money penalties and (if the employee accepts the back wages) will repay up to two years of back wages, receive a full release for those claims, and will not be subjected to liquidated damages or litigation.
More information about the PAID program is available here. If you would like to discuss further, please contact the WHD at 1-866-487-9243.