Paul DeCamp, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Washington, DC office, was quoted in Law360, in “Employers Pass on DOL’s Self-Reporting Wage Theft Program,” by Anne Cullen. (Read the full version – subscription required.)
Following is an excerpt:
The U.S. Department of Labor reported on Tuesday that its voluntary compliance program allowing employers to self-report wage violations turned up just $7 million in back pay since its launch more than two years ago, indicating that businesses are largely skipping the initiative.
The controversial Payroll Audit Independent Determination, or PAID, program, shields businesses from litigation over accidental overtime and minimum wage violations if they come forward with the mistake and pay back their workers in full.
When the department rolled out the self-audit plan in April 2018, regulators touted it as a way to get employees their money faster by sidestepping potentially protracted, expensive litigation.
Critics, including a vocal coalition of state attorneys general, quickly panned the measure as blatantly pro-employer, arguing it lacks needed federal oversight and deprives workers of additional damages they are entitled to under federal labor laws through traditional recovery routes, like a private lawsuit or a DOL enforcement action.
Despite claims that the PAID program is too employer-friendly, businesses don’t seem to be biting.
In its first year-and-a-half on the books, less than 100 employers took the DOL up on the offer, according to department data. Between April 2018 and September, the PAID program turned up roughly $4.1 million for roughly 7,500 employees, compared to the $450 million in back wages recouped through the department’s traditional enforcement routes during the same time frame.
Tuesday’s figures, which cover October through May, show another $3 million or so was returned to about 3,500 workers under the PAID program.
Labor experts point to different reasons for the dismal participation rates.
Epstein Becker Green member Paul DeCamp, a former labor official in the George W. Bush administration, said the attorneys general who voiced opposition to the measure have chilled businesses’ willingness to take part.
In a letter spearheaded by New York shortly after the program was launched, the coalition declared it was still open season on wage theft under state law even if companies participate in the voluntary federal initiative. While it’s not clear if any state has made good on the threat, DeCamp said the prospect alone took its toll.
“I have not advised a single client to participate in the PAID program, at least if they have operations in any of the states where the attorneys general signed the letter,” DeCamp told Law360. Attorneys general from California, Connecticut, Delaware, Illinois, Maryland, Massachusetts, New Jersey, Pennsylvania, Washington and the District of Columbia joined New York’s effort.
DeCamp, who represents employers in wage and hour matters and served as Wage and Hour Division administrator during the Bush era, said those states have made it too risky for employers to sign on.
“I think it created an atmosphere where employers are quite rightly concerned that if they settle a matter through the PAID program and their state attorney general hears about it, the employer should expect a visit from state enforcement personnel,” he said. …
While critics may welcome the measure’s failure to gain traction, DeCamp lamented the low participation rates.
“I don’t think that the criticism of the PAID program is especially fair,” he said. “It’s not realistic. It doesn’t recognize the value to workers of having the option of getting their money promptly.”
He said he believes the program has become “a victim to politics as opposed to legitimate policy beefs.”