In a win for workers and small business, the Department of Labor (DOL) has reinstated the Payroll Audit Independent Determination (PAID) program, allowing employers the opportunity to self-audit and report unintentional wage violations. This common-sense initiative cuts the costs of protracted federal investigations while allowing employers to correct accidental fault.
Originally launched in the first Trump administration, the PAID program offered a streamlined, cooperative mechanism by which employers could comply with the Fair Labor Standards Act (FLSA). With its conception, employers who discovered accidental overtime or minimum wage violations could self-adjust via reports and disclosures to the Wage and Hour Division (WHD) of the DOL and compensate employees as they were due. In return the DOL would be able to cease penalties and remove damages by the good faith of the employer.
But in 2021, the Biden administration shut down the program, removing the efficient tool that both employers and workers benefited from. If anything, wage compliance became less certain due to their dismal efforts.
Under the new Trump administration, the WHD has now brought back the PAID program. In their announcement, they stated that the program permits “employers to correct mistakes efficiently and ensure employees receive back wages or other remedies promptly, all while avoiding litigation.” These benefits have real impacts whereby labor enforcement can be done proactively instead of by the adversarial bureaucracy. Furthermore, the PAID program fosters a culture of faster payment with early fixes and active audits so that penalizations for such mistakes are limited. As a result, the PAID program cuts costs for small businesses and helps employees get paid while also saving money for the taxpayer.
In previous years, Americans for Tax Reform has supported codifying the PAID program into permanent law. Congress should build on the progress of the Trump DOL by codifying the program into statute to prevent any anti-worker or anti-business administrations in the future from suspending the program as President Biden did. Earlier this year, Americans for Tax Reform once again issued a coalition letter in support of the Ensuring Workers Get PAID Act, introduced in the House as H.R. 2299.In an age when regulation is overbearing and the government is bloated, positive initiatives like the PAID program can go a long way to improving the lives of workers and employers alike. The Trump DOL should be commended for restoring this important program. The next step is for Congress to finish the job and make the PAID program permanent.
