DOL Resurrects PAID Program: Employers Can Self-Report, Resolve Violations

Takeaways

• DOL’s Wage and Hour Division has reinstated its Payroll Audit Independent Determination program, which allows employers to self-audit, voluntarily report, and remedy statutory violations through the agency.
• The program has been expanded to include certain potential FMLA leave violations.
• Employers considering using PAID to resolve potential violations should consult with counsel to discuss the benefits and risks.

Related links

• Payroll Audit Independent Determination (PAID)
• Questions and Answers About PAID

Article

The Department of Labor’s Wage and Hour Division (WHD) has relaunched its voluntary Payroll Audit Independent Determination (PAID) program, the agency announced July 24, 2025. The PAID program is an opportunity for employers to resolve certain statutory violations without litigation. By self-auditing their practices and voluntarily reporting violations to WHD, employers can settle violations quickly, without incurring liquidated damages or civil penalties and can obtain a binding release of certain claims.

Through PAID, employers can settle Fair Labor Standards Act (FLSA) minimum wage and overtime violations. The program has also been expanded to allow employers to resolve and remedy certain potential violations of Family and Medical Leave Act (FMLA) leave requirements. (WHD enforces both statutes.)

WHD first rolled out PAID in April 2018, but the Biden Administration discontinued the program in January 2021.

How PAID Works

To participate in the relaunched PAID process, an employer must start with a mandatory review of WHD compliance assistance materials, then self-audit its pay or FMLA compliance practices to identify potential violations. The employer identifies affected employees, calculates back wages and other remedies owed to them, and reports its findings to WHD.

WHD will review the employer’s report, including the back-wage and remedies calculations, and provide a summary of unpaid wages or other relief due. The employer must pay affected employees within 15 days of receiving WHD’s summary of unpaid wages. For FMLA violations, the employer must make all remedies within 15 days of receiving the WHD summary of remedies due.

Who Can Participate?

There are limits to employers’ use of the PAID program. An employer cannot participate if it is under WHD investigation or in litigation (either a private lawsuit or agency enforcement action) alleging violations of the same pay or leave practices at issue in the proposed self-audit. An employer also cannot use the program if the WHD, a court, or other adjudicating agency found the employer has violated the FMLA or the FLSA’s minimum wage or overtime requirements during the last three years. And an employer cannot use PAID if it participated in the program within the last three years to resolve potential violations from the same practices.

Employers seeking to participate in PAID must inform the WHD of any recent known complaints against it asserting violations of the same practices at issue.

Employees included in the proposed self-audit cannot be subject to prevailing wage requirements under the H-1B, H-2B, or H-2A visa programs; the Davis-Bacon Act or Related Acts; or the Service Contract Act.

More details on participation requirements can be found in the WHD’s Q&A document.

Risks and Benefits

PAID offers employers an incentive to review their compensation and FMLA leave practices to address violations and resolve them efficiently. Use of the program allows employers to provide make-whole relief to employees without the risk of liquidated damages from a lawsuit or civil money penalties from a WHD-initiated audit. The program can help employers that have identified wage and hour violations (or potential violations) resolve those potential claims quickly without the threat and cost of litigation. It also helps employees, who can receive payments for potential violations quickly.

There are important considerations for employers, however:

• WHD reviews the backpay calculations that the employer submits but will make its own determination of how much the employer owes.
• Employees have the option of rejecting WHD-proposed backpay. They retain the right to file a private suit.
• With respect to FMLA compliance, employers should review the full range of remedies that may be required by WHD before participating in the program.
• A PAID settlement may not resolve state law claims.

Employers should consult legal counsel when weighing the benefits and risks of participating in the PAID program.

Please contact a Jackson Lewis attorney if you have questions about the PAID program and the benefits and risks of utilizing the procedure.