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Creates a voluntary Payroll Audit Independent Determination (PAID) program run by the Department of Labor so employers who unintentionally violated the Fair Labor Standards Act can self-audit, correct unpaid minimum wages or overtime, and settle with oversight rather than face traditional enforcement. The program defines key terms (affected employee, employer, good faith, self-audit), sets application and documentation rules, authorizes an Administrator to review and supervise settlements, protects certain application information from use if an application is denied, and changes an FLSA anti-retaliation provision.
The Department of Labor launched the nationwide Payroll Audit Independent Determination pilot program (PAID pilot program) in 2018.
The Secretary of Labor, acting through the Administrator of the Wage and Hour Division, established the PAID pilot program to complement enforcement and compliance assistance tools used by the Wage and Hour Division.
The Secretary has a longstanding practice of providing self-audit and office audit programs, as noted by Secretary Marty Walsh in a response for the record following a House Committee on Education and Labor hearing on June 9, 2021.
Through the PAID pilot program, the Wage and Hour Division worked with employers voluntarily to remedy unintentional violations of the Fair Labor Standards Act of 1938, which sets federal rules on minimum wage, overtime, recordkeeping, and youth employment.
Between April 1, 2018 and September 15, 2019, the Wage and Hour Division concluded 74 PAID pilot program cases (less than one percent of all FLSA compliance actions) with total back wages of $4,131,238 paid to 7,429 employees.
Primary effects fall on employers, employees, and the Department of Labor. Employers: Creates an incentive and a structured path for employers who unintentionally violated the FLSA to self-audit, disclose errors, pay owed wages, and resolve exposures with DOL supervision—potentially reducing litigation risk and civil‑penalty exposure for good‑faith participants. Payroll, HR, and legal teams will need to document self-audits and meet application requirements. Employees: Can receive back wages faster than through standard enforcement and litigation, but may receive settlements that differ from outcomes a court might order (for example, potential differences in liquidated damages or penalties depending on program terms). Department of Labor and Administrator: Will have new administrative responsibilities to review applications, supervise settlements, and implement confidentiality/use protections; the program aims to free enforcement resources by resolving certain matters administratively. Courts and enforcement landscape: May see fewer contested FLSA cases because some matters are resolved through PAID; however, protections that limit use of denied‑application materials could constrain later enforcement actions in some situations. Overall tradeoffs include faster payment to workers and administrative efficiency versus concerns about reducing deterrent penalties or uneven access depending on employer participation and program approval criteria.
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Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
Introduced July 14, 2025 by Timothy Patrick Sheehy · Last progress July 14, 2025
Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
Introduced in Senate