What if I told you that conducting a wage-and-hour audit and discovering a Fair Labor Standards Act violation could save you money?
“Uh, Eric. Is the air up there in the cloud getting thin?”
The PAID program
On Tuesday, the U.S. Department of Labor’s Wage and Hour Divison (WHD) announced “a new nationwide pilot program, the Payroll Audit Independent Determination (PAID) program, which facilitates resolution of potential overtime and minimum wage violations under the Fair Labor Standards Act (FLSA)”
Here’s how it works:
- You audit your pay practices;
- You discover that you accidentally violated the FLSA (e.g., violations based on alleged “off-the-clock” work, failures to pay overtime at one-and-one-half times the regular rate of pay, or misclassification of employees as exempt from the FLSA’s minimum wage and overtime requirements);
- You self-report to the WHD;
- You pay the back wages that you owe to the employees; and
- You don’t have to pay liquidated damages (100% of the back wages owed) or attorneys’ fees to the employees.
What’s the alternative?
- You don’t audit (or you sweep known problems under the rug);
- You may get blindsided by an FLSA collective action;
- You pay back wages;
- You pay liquidated damages and the plaintiffs’ attorney’s fees; and
- You pay your lawyers to defend a lawsuit in which you have no chance of success.
Oh, I’ll take what’s behind door number 1, please.
But, just to be clear, the first option is not available: (a) if the employer acts in bad faith, (b) to moot existing wage and hour litigation, or (c) if the employer is a repeat offender. Plus, the relief the PAID program affords only extends to whatever the employer self-reports, nothing more.
Proactive employers, read on
Hey folks, I know the idea of conducting a wage-and-hour audit is right up there with chugging sour milk. But, if you want what’s behind door number two, I know many lawyers who would love to get rich defending the inevitable wage-and-hour action.
The reality is that, if you’re like most businesses in America, you probably have a wage-and-hour violation lurking in your workplace and you don’t even know it.
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Now isn’t the time to sit idly while the government works out the details of the PAID Program. Many of my FisherBroyles partners across the country and I have experience conducting wage-and-hour audits. (For example, I have done them on both a state and federal level.)
If you’d like to find out more about how we can help, drop me a line to discuss.
Or don’t. This isn’t communist Russia.
Unless, of course, that’s where you live. In which case, I’m not sure why you stuck with me through the first 460 words of this post.