We’ve said it before, and we’ll say it again: HR’s primary objectives are to mitigate risk for employers and to build a positive workplace culture. We want to update you on a way to do both of those things using a new program through the Department of Labor’s Wage and Hour Division.
Given the challenges that have arisen due to the virus-that-shall-not-be-named, it is entirely possible that you may have inadvertently committed an FLSA wage and hour violation. Has your organization missed a pay period or two over the course of the pandemic? Is it possible that you accidentally missed providing overtime pay rates to a nonexempt employee in the craziness that ensued in March and succeeding months? Are you concerned that you could discover some inaccuracies in your payroll if you look closely at your compensation data for the last few months?
If so, the U.S. Department of Labor Wage and Hour Division (WHD) and our staff at HRx understand. In recognition of the extraordinary circumstances of the last few months, the WHD has eliminated liquidated damages for wage and hour violations in many circumstances, including when employers can show that they are working in good faith to correct violations.
What does this mean?
Previously, if you committed a wage and hour violation, you could be responsible not only for paying back wages but also for additional liquidated damages that served as a punitive disincentive for FLSA violations. Essentially, violations could cost your organization much more than the money you owed to affected employees even if they were entirely unintentional. Now, if you’re working in good faith to correct wage and hour violations, you can avoid liquidated damages altogether. That’s where the WHD’s Payroll Audit Independent Determination (PAID) program comes into play.
What is PAID, and how can it help my employees and my organization?
PAID is a WHD program that allows employers to conduct audits of their wages and hours and self-report any violations they find. When employers self-report, they signal to the WHD that their organization is committed to compliance and to quickly resolving wage and hour issues they discover in their audit. This program allows employers to avoid liquidated damages by showing good faith, circumvent costly litigation that may arise if employees pursue legal action in the face of employer complacency, and provide back pay to employees as quickly as possible. It’s a win-win-win if you ask us!
The alternative to PAID is expensive – it is hoping against hope that you haven’t committed any FLSA violations and that, even if you have, employees won’t notice or pursue litigation to recover back pay. Ultimately, conducting an audit and self-reporting any violations is an easy way to commit yourself to mitigate risk and letting your employees know that you care about paying them fairly.
Considering conducting a compensation audit?
The team at HRx is here to help – let us be your partners in pay auditing! We know you care about paying your employees fairly, especially amid the pandemic and economic crisis, and we want to help you show them as much while mitigating risk for your organization. Sometimes, the easiest way to avoid future violations is to find past violations and commit yourself to compliance going forward. We’re excited to help you utilize the PAID program to do so going forward.