The Department of Labor (DOL) announced a new pilot program Tuesday that will allow business owners to report themselves for potentially violating overtime and minimum wage laws to avoid hefty fines.
The Payroll Audit Independent Determination system is a self-auditing program that the DOL’s Wage and Hour Division said it will implement nationwide for six months.
The agency said the program aims to resolve claims expeditiously without litigation to improve employers’ compliance with overtime and minimum wage obligations under the Fair Labor Standards Act.
“Right now if a company is aware of a mistake there is no simple mechanism for them to come forward and say we made a mistake we want to voluntarily come forward and pay our back wages,” Labor Secretary Alexander AcostaAlex Alexander AcostaOn The Money: Trump slams relief bill, calls on Congress to increase stimulus money | Biden faces new critical deadlines after relief package | Labor rule allows restaurants to require broader tip pooling Labor rule allows restaurants to require broader tip pooling Federal litigator files complaint alleging Labor secretary abused his authority MORE told lawmakers Tuesday at a House subcommittee hearing on the Labor Department budget.
“So the Wage and Hour Division through this program will assess the amount of wages due and supervise payments to employees. Employees will receive 100 percent of back wages owed without costs of fees, without attorneys fees,” he said.
The agency said companies that participate in the program by reporting violations and proactively working to resolve issues will not be forced to pay any civil monetary penalties.
DOL said employers, however, are not allowed to participate if they are in litigation or currently under investigation for wage and hour violations.
Members of the business community were quick to hail the administration for testing a new approach in enforcing labor laws.
“This is a much fairer and more sensible approach to regulation,” Job Creators Network CEO Alfredo Ortiz said in a statement. “The previous administration shot first and asked questions later. The Trump administration is primarily concerned with making sure businesses are compliant.”
At the end of the six months, DOL said it will evaluate the effectiveness of the pilot program, as well as potential modifications and whether to make the program permanent.