Eleven Attorneys General address their concerns
The Dept. of Labor (DOL) just announced the launch of its PAID (Payroll Audit Independent Determination) program, which was designed to give companies a reprieve from fines and other penalties when they self-report wage issues.
Although the PAID program’s in its infancy, it’s already facing some significant criticism in several states.
Multiple attorneys general have signed a letter written to Labor Secretary Alexander Acosta asking him to review the program.
In the letter, attorneys general from California, Connecticut, Delaware, Illinois, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Washington and Washington DC, raised several concerns about the potential impact of the PAID program.
Primarily, they’re worried workers will be encouraged to waive their legal rights to obtain their full back pay and damages as part of their company’s agreement with the DOL.
Because the PAID programs is a federal initiative, employees would still have a right to pursue back wages and other damages at the state level.
However, the attorneys general said, some companies may pressure workers not to file additional complaints with the state as part of their settlements.
Workers may also lose out on higher wage payments, since the PAID program doesn’t require employers to calculate back wages owed using state and local minimum wage rates. It also doesn’t mandate that employers pay wages owed during longer state statute of limitation periods.
And, the letter says, total penalty forgiveness may not be enough of a deterrent to keep companies from committing future wage violations.
It’s likely the effectiveness and necessity of the PAID program will be debated for some time.
The DOL plans to release data about the pilot program after it’s been in place for approximately six months.
In the meantime, if you discover any potential wage and hour violations during a routine self-audit, it’s best to contact a legal expert to find out how to proceed.