End of PAID program: wage and hour changes in Biden administration

In March 2018, the Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL) announced a new pilot program, the Payroll Audit Independent Determination (PAID) program. The employer-friendly program was intended to expedite the resolution of inadvertent overtime and minimum wage violations under the Fair Labor Standards Act (FLSA) by encouraging employers to audit their payroll practices and self-report unintended payroll errors. After the initial pilot period ended, it became a permanent feature of the WHD until January 29, 2021, when the division announced its immediate termination. The Biden administration explained its rationale by stating the program “deprived workers of their rights and put employers that play by the rules at a disadvantage.”

PAID program encouraged audits and self-reporting

It’s unclear how many employers actually took advantage of the PAID program during the last three years, but employers that did enjoyed two primary benefits in exchange for self-reporting FLSA violations. First, if violations were uncovered, then employers could work with the WHD to resolve payroll mistakes without costly and time-consuming investigation and litigation.