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US Tests Wage-and-Hour Amnesty Program

April 10, 2018
 
The U.S. Department of Labor (DOL) recently announced a six-month pilot amnesty program designed to encourage companies that owe back wages to repay them. The Payroll Audit Independent Determination program (PAID) will allow employers to self-report wage-and-hour violations without legal consequences, provided they get back pay to the affected workers and aren't prior offenders.
 
DOL will operate the PAID program for six months and then reevaluate to determine if it is achieving its goals. 
 
U.S. Secretary of Labor Alexander Acosta believes the PAID program will encourage employers to comply with the program’s intent since it comes coupled with an amnesty.
 
In recent testimony before the Congress he stated, "If an employer currently sees that it has made a mistake, right now there is little incentive for them to come forward."
 
DOL contends that employees will also benefit because they won't need to hire lawyers to recover their unpaid wages. The program is likely to be controversial since some believe that it will not do anything to improve the failure to enforce the wage-and-hour laws that lead to the problem I the first place. 
 
The PAID program comes as recent studies have shown that in 41 percent of non-payment of wage cases in which wage payments were ordered, the money was never recovered. 
 
There are some caveats and some open questions about the program.
 
For example, if an employer is audited in the future, will new violations be deemed repeat violations resulting in penalties? 
 
Some other concerns are that after violations are disclosed:
 
the DOL does not have to accept the employer into the program;
workers may sue if individual employees decline a settlement payment; and
state-law claims may survive the DOL settlement. (A state-law claim in Massachusetts may enable an employee who prevails to recover treble damages.) 
 
Interested employers should review the DOL web links to determine whether they may wish to participate in the program.
 
Please contact the AIM Employer Hotline at 800-470-6277 if you have any questions about this or any other HR-related matter.
 
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