Sec. 2. Findings
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Congress finds the following: In 2018, the Department of Labor launched the nationwide Payroll Audit Independent Determination pilot program (referred to in this section as PAID pilot program ). The Secretary of Labor, acting through the Administrator of the Wage and Hour Division, established the PAID pilot program to complement enforcement and compliance assistance tools undertaken by the Wage and Hour Division of the Department of Labor. The Secretary has a longstanding practice of providing self-audit and office audit programs, as noted by Secretary Marty Walsh in a response for the record following a hearing before the Committee on Education and Labor of the House of Representatives on June 9, 2021.
The Wage and Hour Division, through the PAID pilot program, worked with employers on a voluntary basis to remedy unintentional violations of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 201 et seq. ), which is the Federal statute establishing minimum wage, overtime pay, recordkeeping, and youth-employment requirements affecting employees in the private sector and in Federal, State, and local governments. The PAID pilot program yielded positive results for employers and employees.
Between April 1, 2018, and September 15, 2019, the Wage and Hour Division concluded 74 PAID pilot program cases, representing less than one percent of all compliance actions under the Fair Labor Standards Act of 1938, with a total of $4,131,238 in back wages paid to 7,429 employees through such PAID pilot program cases. Self-audits through the PAID pilot program by employers returned more back wages to employees in less time than compliance actions overall. In fact, during the period described in paragraph (5)— the average back wages paid per case for PAID pilot program cases ($55,828) were more than 4 times the average back wages paid per compliance action ($11,355); the average back wages paid per enforcement hour for PAID pilot program cases ($2,864) was more than 10 times greater than the average back wages paid per enforcement hour for compliance actions ($279); on average, nearly 10 times more employees received back wages in each PAID pilot program case than in investigations conducted using traditional methods; self-audits through the PAID pilot program averaged 19 hours per case as compared to 41 hours per case for the Secretary conducted using traditional methods; and self-audits through the PAID pilot program reached employers that the Wage and Hour Division would not typically prioritize for enforcement, including government establishments and industry sectors with higher wage occupations.
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U.S. Code