It’s one of the few government programs that rewards employers for doing the right thing before getting sued.
TL;DR: The U.S. Department of Labor has relaunched the Payroll Audit Independent Determination (PAID) program. PAID allows employers to voluntarily disclose and correct federal wage violations under the Fair Labor Standards Act (FLSA)—and now, certain FMLA violations as well—without facing penalties, liquidated damages, or prolonged investigations. Employers that identify and fix issues proactively may benefit from a more efficient and lower-risk resolution process.
🔗 Read the DOL’s press release
🔗 Visit the PAID program website
🔗 Read the DOL’s PAID Q&A
A Voluntary Program for Employers Who Want to Get It Right
First introduced in 2018, the PAID program offers a path for employers to correct wage-and-hour violations before they become formal enforcement actions or private lawsuits. After being discontinued in 2021, the program has now been reintroduced by the DOL with the same core structure—and a new reference to certain FMLA violations.
Employers that discover past issues—such as unpaid overtime, misclassified employees, or FMLA compliance gaps—can use PAID to voluntarily report those violations to the Wage and Hour Division (WHD), pay back wages or provide remedies, and close the matter without further penalties.
How the PAID Program Works
The Department of Labor outlines a four-step process:
- Employer Self-Audit
Employers review compliance materials and conduct a self-audit. This includes identifying potential minimum wage, overtime, or FMLA violations; calculating back wages owed; and determining any other remedies necessary for compliance (such as leave restoration). - Report to WHD
Employers contact the Wage and Hour Division to discuss their findings, calculations, supporting evidence, and methodology. They must also provide a concise statement describing the scope of the potential violations and certify that all program requirements have been met. - WHD Review
WHD evaluates the submission and may request additional information. It then provides guidance on next steps, including review of compensation or leave practices and calculation of any remedies due. - Resolution & Payment or Other Remedies
Employers must pay back wages and/or implement remedies within 15 days of receiving WHD’s summary of unpaid wages. They must also provide proof of payment and documentation of other compliance steps.
Benefits of the Program
✔️ Voluntary resolution. Employers control the timing and scope of the disclosure.
✔️ No penalties or liquidated damages. The DOL agrees not to assess civil money penalties or seek double back wages.
✔️ Fewer litigation risks. Employees who accept payment sign a limited release of claims related to the issue disclosed.
✔️ Efficient closure. Participation may help avoid extended investigations or protracted legal disputes.
✔️ Supports good-faith compliance efforts. The program recognizes and rewards early correction.
Things to Keep in Mind
- Not every employer will qualify. To use the PAID program, you have to meet certain conditions—for example, you can’t already be under investigation or in court over the same issues. There are other eligibility requirements, too.
- State and local laws still apply. PAID covers only federal wage and certain FMLA issues. It won’t protect you from liability under state or local laws.
- Employee participation is voluntary. If employees don’t accept payment or sign the release, they may still bring claims. If they do sign, the release is limited—it applies only to the specific FLSA or FMLA violations and timeframes the employer disclosed. It does not waive unrelated claims or those under state law.
- The program doesn’t cover everything. PAID applies only to specific kinds of FLSA and FMLA violations. It’s not a fix for all compliance problems.
What Employers Should Do Now
✅ Review your wage and leave practices. Focus on common FLSA and FMLA pitfalls—misclassified employees, unpaid overtime, insufficient leave tracking, and recordkeeping issues.
✅ Consult with counsel. Legal input is essential—not just for preparing the submission, but for deciding whether PAID is the right option in the first place. Eligibility, strategy, and downstream risk should all be considered.
✅ Act early. PAID is available only before litigation or investigation begins. Timing is critical.
Bottom line:
The PAID program offers a practical way to resolve FLSA and certain FMLA violations before they lead to legal or regulatory consequences. Employers that take compliance seriously—and act early—may find this program to be a valuable option.
Missed yesterday’s Zoom on the One Big Beautiful Bill?
We covered tax, payroll, and benefits issues employers should be thinking about right now—with no slides and no fluff. You can watch the full recording here:
🎥 https://youtu.be/cWxCOeReDXA