What Is the PAID program?

The Department of Labor is starting a new pilot program designed to get employers to self-audit and self-report violations of the overtime labor laws (the “FLSA”).  This program is scheduled to run for approximately 6 months on a national basis.  PAID stands for Payroll Audit Independent Determination.

What Types of Overtime Pay Violations Are Covered?

The program covers any type of overtime or minimum wage violations under federal law. With regard to overtime pay, this includes common violations based on:

  • Paying hourly employees straight time for overtime, instead of paying time and a-half;
  • Using a Day Rate pay scheme and not paying overtime after 40 hours per week;
  • Misclassification of salaried or highly paid employees as exempt from the overtime pay requirements when they are non-exempt.
  • Misclassification of workers as an independent contractor (1099 “employee”) instead of an employee to avoid paying overtime;
  • Employees working “off-the-clock” to avoid paying overtime;
  • Failing to calculate and pay overtime at the correct rate – often not including bonuses or incentives in the calculation.

What Employees Owed Back Overtime Pay Need to be Aware of

Consistent with the DOL’s recent focus on improving compliance going forward, versus insuring that workers are fully compensated for any past violations of their rights, the program seeks to entice employers who have been breaking the law to turn themselves in by offering them a huge potential discount on their back pay liability, or as some have labeled it, a “get out of jail free card”.  This incentive comes at the expense of the employees who were wrongfully denied the pay they were legally entitled to.

The New York Attorney General’s statement sums it up:

“The Trump Labor Department’s ‘PAID Program’ is nothing more than a Get Out of Jail Free card for predatory employers.

Employers have a responsibility under state and federal laws to pay back stolen wages, as well as damages intended to deter them from breaking the law again. The PAID Program allows employers to avoid any consequences for committing wage theft, while blocking lawsuits intended to vindicate employees’ rights.”

The New York AG has been joined by the Pennsylvania AG, and others, in opposing the Department of Labor’s PAID program.

Workers Need to Know This about the PAID Program:

  • If you receive a payment for unpaid back overtime from your employer – know your rights before signing anything or cashing a check. Talk to a lawyer who represents employees with overtime claims, not to one who typically represents companies and management.  Consultations are free and confidential.
  • The Department of Labor is NOT your lawyer, and the company is not obligated to act in your best interest.
  • The big draw for employers is not having to pay employees everything they are legally entitled to. Specifically, the program only requires an employer to pay workers only for their unpaid past overtime (ie. back wages).  It does not require them to pay any additional amounts for liquidated damages or penalties.  In many cases, this will amount to a 50% or greater discount for employers.
  • Legally, employees are entitled to recover double the amount of their unpaid back overtime This is to compensate them for the loss of use of the money they should have been paid, but that instead was wrongfully kept by their employer.  The PAID program lets employers off the hook for this amount.
  • The amount of back overtime owed to workers will likely be determined and calculated by the employer. (Fox – Hen House?)
  • It eliminates the protection of the workers being represented by their own private lawyer, whose sole job is to maximize their compensation. Normally, employers are liable for attorney’s fees in addition to the damages due to workers. [How do you know if it’s fair without consulting an overtime pay rights attorney?]
  • Employees are NOT required to accept payments for back overtime pay sent to them via the program or sign a release, and employers are prohibited from retaliating against the employee for his or her choice.
  • If an employee decides not to accept the payment offered, they will not release any rights or their ability to hire their own lawyer to pursue collection of all amounts owed to them.
  • Even if an employee does accept payment, the employer may only obtain a release of the identified violations and for the time period for which back wages are actually paid. So, employees may be able to hire their own attorney to recover additional overtime pay that was not covered by the payment – for example, overtime pay going back further than 2 years which is the typical period covered by DOL settlements.

How Do I Know if My Employer Is Trying to Take Advantage of the PAID Program?

If your employer goes through the process set up by the DOL, you will receive a form describing the settlement terms which you are required to sign in order to receive payment.  This form will contain a release for all wage violations mentioned for the period of time specified.  Your employer is responsible for making prompt payment.  Any check will come from your employer, not the Department of Labor.

If you have any doubt as to your rights, the amount you are legally owed or what claims you are giving up by taking a payment, get advice from a lawyer who is protecting your rights – before you decide.

What Types of Employers Are Covered?

All employers who are required to comply with the federal overtime pay laws are eligible to take advantage of the program.  The following are some of the industries and job types that are likely to be at issue:


Job Types

  • Independent contractors
  • Any Job paid on a Day Rate basis
  • Oilfield Field Specialist
  • Oilfield Operators and Drillers
  • MWD / LWD
  • Inspectors
  • Assistant Manager
  • Help Desk / IT Support
  • Executive Assistant / Clerk
  • Call Center Operator
  • Inside Sales / Account Manager
  • Factory / Production
  • Restaurant
  • Service Technicians and Installers

When workers get a check for back overtime from one employer, they should not only question if this payment is fair – they should also think about other past employers who may not have paid them correctly.

For more information, contact our lawyers who represent workers, not companies, in overtime pay claims.  Call or submit your information using our convenient Case Evaluation form for a FREE and CONFIDENTIAL review of your circumstances.