Last Updated on September 12, 2025 by MyHRConcierge

The U.S. Department of Labor (DOL) has reinstated the Payroll Audit Independent Determination (PAID) program- originally launched in 2018- after rescinding it in 2021. This move reflects the DOL’s renewed commitment to encouraging employer self-compliance, while offering a structured framework to resolve potential wage and leave law violations. With its July 2025 relaunch, the program has been expanded to cover both the Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA). Employers should understand how the program works, its benefits, and the steps necessary to remain compliant.

What is the PAID Program?

The PAID program is a voluntary initiative that allows employers to proactively identify and rectify potential violations of federal wage and hour laws under the supervision of the DOL’s Wage and Hour Division (WHD). Key features of the program include:

• Voluntary Participation: Employers initiate the process by conducting self-audits of their wage and hour practices.
• Wage and Hour Division (WHD) Oversight: Findings are submitted to the WHD, which reviews the employer’s audit and supervises the resolution process.
• Employee Protection: Employees receive back pay or other remedies owed, with the process ensuring they are made whole without litigation.
• No Liquidated Damages: As part of the program, the DOL will not seek liquidated damages or civil penalties in these pre-litigation settlements.

With the 2025 reinstatement, the program now also applies to potential FMLA violations, marking a significant expansion from its original scope.

Why the PAID Program Matters

Employers face increasing scrutiny from both federal and state agencies over wage, hour and leave practices. The PAID program provides a unique opportunity to:

• Correct compliance issues before they lead to costly investigations or lawsuits.
• Demonstrate good-faith efforts to comply with federal labor laws.
• Minimize financial exposure by avoiding liquidated damages and penalties.
• Resolve issues in a manner that is fair, timely, and supervised by the DOL.

For employees, the program ensures that they are promptly compensated for any unpaid wages or leave-related remedies.

Employer Eligibility and Participation

Not all employers will qualify to participate. To be eligible, employers must:

• Be covered under the FLSA and/or FMLA.
• Not currently be under investigation by the WHD for the same issues.
• Not be engaged in ongoing litigation concerning the same practices.
• Not have resolved similar issues through the PAID program within the last three years.
• The employer must acknowledge that participation in the PAID program does not cut off employee rights under other state, local, or federal laws (e.g., Title VII, the Americans with Disabilities Act).

Employers must also commit to paying all back wages or remedies identified within 15 days of receiving the WHD’s summary.

Additional Considerations for Employers

Employers should note several key rules when participating in the PAID program:

• The program does not apply retroactively; past wage payments outside PAID will not provide a release of claims.
• Employers must self-identify with the DOL- participation cannot be explored anonymously.
• A certification of compliance with the FLSA or FMLA is required, though its scope is not fully defined.
• Acceptance into the program is not guaranteed, and employees may reject payments and pursue private claims.
• Any release of claims is limited to the violations disclosed during the audit.
• Employers must issue payments within 15 days of the DOL’s summary and provide proof of payment.
• For FMLA-related remedies beyond wages, the DOL will review and require timely implementation.

Steps to Stay Compliant

Participation in PAID should not replace an ongoing culture of compliance. To reduce the risk of violations, employers should:

1. Conduct Regular Self-Audits: Review payroll practices, timekeeping systems and leave policies to identify potential issues.

2. Stay Informed of Regulatory Changes: Wage and leave laws evolve frequently; employers should monitor updates from the DOL and state agencies.
3. Update Policies and Procedures: Ensure employee handbooks, leave policies, and wage classifications are accurate and compliant.
4. Train Managers and Supervisors: Those overseeing scheduling, payroll and leave requests should be well-versed in FLSA and FMLA requirements.
5. Document Compliance Efforts: Maintain records of audits, training and policy changes to demonstrate good faith if issues arise.

Moving Forward with the PAID Program

The reinstatement of the PAID program presents a proactive option for employers seeking to correct wage and leave law violations without the heavy costs of litigation. By combining participation in PAID with robust internal compliance measures, employers can reduce legal risks, strengthen employee trust and demonstrate a clear commitment to fair workplace practices. Now more than ever, HR and compliance professionals should take advantage of this program as part of a broader compliance strategy.

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