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Businesses may soon be able to avoid federal penalties for certain overtime and minimum wage violations by proactively working with the U.S. Department of Labor to correct potential violations. A new pilot program, the Payroll Audit Independent Determination (PAID) program, was announced March 6 by the department’s Wage and Hour Division and will be launched in the near future.

The idea is to expedite resolution of inadvertent overtime and minimum wage violations under the Fair Labor Standards Act.

“The PAID program will ensure that more employees receive back wages they are owed—faster,” the division said in a news release. “Employees will receive 100 percent of the back wages paid, without having to pay any litigation expenses, attorneys’ fees, or other costs that may be applicable to private actions.

“The division will not impose penalties or liquidated damages to finalize a settlement for employers who choose to participate in the PAID program and proactively work with the division to fix and resolve their potential compensation errors,” the release stated. The pilot program will last for six months, after which the division will evaluate the results before deciding how to proceed.

The division says employers may not participate if they are in litigation or currently under investigation by the division, or if they repeatedly try to resolve the same potential violations.

The program further requires employers to review the division’s compliance assistance materials, carefully audit their pay practices, and agree to correct the pay practices at issue going forward.  These requirements improve the employers’ compliance with their minimum wage and overtime obligations, which helps ensure employees’ rights are protected.

More information concerning the pilot program is available at

Before deciding to participate in a program like this, NJBIA recommends employers speak with an employment and labor attorney.