Self-report FLSA overtime or minimum wage violations through pilot program

April 5, 2018|Thomas Schultz

The Payroll Audit Independent Determination (PAID) pilot program allows employers to self-report violations of the Fair Labor Standards Act (FLSA).

The U.S. Department of Labor’s Wage and Hour Division recently announced a new nationwide program to help employers resolve potential overtime and minimum wage violations under the FLSA.

PAID is a pilot program designed to improve employers’ compliance with FLSA regulations and confirm or support employees receiving the wages they are owed. Employers participating in this voluntary program can self-report any violations and potentially avoid a lengthy litigation process and costly court fees. PAID will run nationwide for approximately six months, after which time the department will evaluate its effectiveness and determine next steps.

What should employers do?

To participate, conduct a wage-and-hour audit to identify alignment with compliance requirements. Then, self-report any overtime or minimum wage violations to the Wage and Hour Division. You will be required to pay any back wages owed to employees; however, you do not have to pay liquidated damages or attorneys’ fees to the employees.

The Wage and Hour Division will oversee each case to evaluate the amount of wages owed and ensure the employers’ payments to the employees are made. Employees will not be required to accept the back wage settlement if they disagree with them.

FLSA violations could include:

  • Miscalculating overtime
  • Misclassifying employees as exempt from wage and overtime requirements
  • Paying employees for “off-the-clock” work

Employers will be required to accept compliance assistance and correct the practices that led to the errors.

Who is eligible to participate in the PAID program?

All FLSA-covered employers are eligible to participate in the pilot; however there are a few restrictions. Employers meeting the following criteria would not be allowed to participate:

  • Those who act in bad faith
  • Those who are involved in current wage and hour litigation
  • Repeat offenders

What happens if you choose not to participate in the program?

Employers are not required to conduct an audit or report any alleged violations, but if you are the subject of an FLSA / DOL review, you would be responsible for back wages, liquidated damages, and your attorney fees as well as those for the plaintiff.

The government is still putting final touches on the PAID program and additional information will be released. Learn more about the .

Schenck’s Human Resources consultants bring years of experience guiding organizations in diverse industries through operational challenges and strategic approaches, including HR compliance issues. Our HR Consulting team is here to help. Call 800-236-2246 to find out how we can help review and audit your compensation practices.


Thomas Schultz, PHR, is a manager – HR Consulting with Schenck. He has more than 20 years of human resources experience, including building human resource systems and structures that match the changing needs of businesses. He brings a broad blend of skills in areas such as leadership coaching, employee relations, benefits, training and development, change leadership and employment law.