US Department of Labor Reinstates Self-Audit PAID Program

On July 24, 2025, the Department of Labor Wage and Hour Division (WHD) restarted its Payroll Audit Independent Determination (PAID) program which allows employers to self-audit and resolve minimum wage and overtime pay violations under the Fair Labor Standards Act (FLSA). The renewed version of the program has expanded coverage to include potential violations under the Family Medical Leave Act (FMLA). The program allows employers to identify and settle potential violations quickly. Employers may implement the approved remedies, obtain a binding release of claim, and then avoid litigation and the payment of liquidated damages (an award of double back wages), other civil penalties, and attorney fees and costs. 

The process begins with the employer’s review of WHD compliance materials. The employer then conducts a self-audit to identify potential violations and calculate back wages and other remedies owed to its employees. The employer self-reports any identified violations, back wages, and remedies to the WHD. Upon evaluation of the submission,  WHD provides the employer with a summary of unpaid wages and other relief, a proposed release of liability for the employees to sign, and other guidance to bring the employer into compliance. Resolution requires implementation of these remedies. Employees receive a summary of unpaid wages and forms to sign allowing them to accept or decline the settlement. Employees who settle waive their right to litigate the federal claims—though they may still have state law claims. Employees who reject the settlement may file an action in court.

Some employers are not eligible to use the self-audit PAID program including: (1) employers under investigation by the WHD or in court on the same violations; (2) employers who have been adjudicated to have violated the FLSA or FMLA during the past three years; and (3) employers who have participated in the program in the past three years. Some employees are excluded from the PAID program including employees subject to prevailing wage requirements under certain visa programs, the Davis Bacon Act, or the Service Contract Act.     

Eligible employers are urged to consider using the PAID program due to the large fee awards made to prevailing plaintiffs. Plaintiffs and their attorneys are highly motivated to file and maintain claims because of the mandatory fee-shifting that requires the employer to pay a prevailing plaintiff’s attorney fees. Plaintiff’s attorney fees frequently dwarf the amount of the original claim. In class or collective actions, the complexity and length of the litigation further increase the fees. The PAID program gives employers the option to avoid the high cost of such litigation.