Paul DeCamp Quoted in "DOL Extends Violation Self-Reporting Program — But Should Employers Bite?"

Last week, the U.S. Department of Labor (DOL) announced a six-month extension of its Payroll Audit Independent Determination (PAID) pilot program.

PAID encourages employers to audit their pay practices, self-report any violations of the Fair Labor Standards Act (FLSA), and then work with the DOL’s Wage and Hour Division (WHD) to correct the errors and get workers their back pay as quickly as possible.

But how is it working out in practice? HR Dive spoke with two employment lawyers — both former WHD administrators — who had starkly different views of the program. DOL did not respond to a request for comment.

Good in theory but risky in practice?

“The PAID program is a good way to address the challenges that workers and employers face when the law prevents private enforcement of FLSA settlements,” said Paul DeCamp, a member of the firm in the Washington, D.C., office of Epstein Becker & Green, PC. DeCamp also served as WHD administrator under President George W. Bush.

DeCamp said PAID represents essentially the same practice that was in place for decades, before the Obama administration, but now is, in some ways, even more protective of workers’ rights.

He noted that the biggest challenge is that 11 states have voiced strong opposition to the PAID program and have all but threatened employers that if they participate in the program, there will be retaliation.

“Employers with operations in these 11 states are somewhat nervous about participating in this program — the basic concern is that an employer that had settled a matter via PAID would face a FOIA request by either a state agency or private plaintiff’s lawyer or union,” he said.

And that fear may not be completely misplaced. The day after DOL announced the extension, Politico reported that at least nine employers, collectively owing more than $508,000, participated in the program in the first six months, and published their names.

As a result of that concern, a lot of employers and employers’ counsel have adopted a “wait and see” approach to PAID to get a better read on whether employers that participate in the program later get hit with state actions or private litigation, he said.

So why are states so upset? Those that object, DeCamp said, have claimed that PAID shortchanges workers by not requiring liquidated damages or interest on any of the back wages, by not collecting penalties, and by not advising employees of potentially greater remedies available under state law.

“The response to that, of course, is that it’s not DOL’s job to enforce state law — and the remedies that employees are getting through the PAID program are the same remedies that employees traditionally got when they would settle matters through the DOL,” he said. “In addition, settlements under the PAID program are entirely voluntary — no worker is required to give up rights and accept the money; that’s only if the worker chooses to.”