The Open Competition Center supports the passage of S. 3074/H.R. 5743, the “Ensuring Workers Get PAID Act,” introduced by Sen. Mike Braun (R-Ind.) and Rep. Elise Stefanik (R-N.Y.).
This legislation codifies the DOL’s Payroll Independent Determination (PAID) pilot program established in 2018. The PAID program allowed employers to revise accidental wage and hour violations under the Fair Labor Standards Act (FLSA) without triggering a costly DOL investigation. The program incentivized employers to self-audit and report accidental violations to the DOL without triggering costly and time-consuming investigations.
Americans for Tax Reform President Grover Norquist has also recently released a letter in support of this legislation, which you can read here.
During the pilot period of the PAID program, employees were able to receive 100% of back wages in a quicker manner than is allowed by traditional DOL investigative procedures. However, within the first ten days of the Biden Administration, the program was ended based on the erroneous claim that it banned workers from pursuing a private right of action.
Ending this program harmed employees by forcing them to rely on less efficient investigative procedures as their only means of recouping these losses. A DOL report on the effectiveness of the PAID program found that the average back wages paid to employees per case under the PAID program was more than four times the wages paid out under a traditional investigation and more than 10 times the back wages per Wage and Hour Division staff hour invested. Additionally, self-audits through the PAID program took less than half the time to complete per case compared to a traditional investigation.
Without the PAID program, employees need to rely on the less effective option in recouping their losses, creating a lose-lose situation for both employers and employees. Employers who have committed minor mistakes are subjected to lengthy DOL investigations. Employees must wait longer recoup less money than under the PAID program.
Officially codifying the PAID program, on the other hand, benefits both employers and employees. Employers will once again have an avenue to voluntarily report inadvertent FLSA violations, increasing compliance with the law. Employees will recoup back wages on an expedited basis without the expenses of litigation.
Open Competition Center urges lawmakers to support the passage of the “Ensuring Workers Get PAID Act” to ensure that employees can recoup their earnings in a fair and expeditious manner without unnecessarily exploiting employers to a long, drawn-out investigation.