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On July 24th, 2025, the U.S. Department of Labor (DOL) announced the return of its Payroll Audit Independent Determination program, also known as the PAID program. Specifically, the PAID program (Program) was initially launched in April 2018 but was discontinued in 2021. The purpose of the program was to facilitate early resolution of Fair Labor Standards Act (FLSA) compliance issues. Generally, the new version of the Program includes some additional requirements when compared to the 2018 version. The Program has also been expanded to resolve violations of the Family and Medical Leave Act (FMLA). Indeed, the FLSA and the FMLA are two of the five employment laws that all businesses must be aware of. Earlier this month, the DOL announced that it would stop seeking liquidated damages in wage and hour cases.
Overview of the Fair Labor Standards Act (FLSA)
Explicitly, the FLSA establishes minimum wage and overtime protections for non-exempt part-time and full-time employees. However, under section 13(a)(1) of the FLSA, employees paid above the FLSA’s current salary basis are generally exempt from overtime provisions. To qualify for an overtime exemption, employees must have been paid on a salary basis at a rate of not less than $684 per week. These exempt employees must also perform at least one of the duties of an executive, administrative, or professional employee.
Additionally, every covered employer must maintain specific records for each covered employee. Records do not have to be in a particular form. However, they must include the following information:
- specific identifying information about the employee,
- data on hours worked,
- pay rate, and
- wages earned.
Brief Overview of the Family and Medical Leave Act (FMLA)
Overall, the FMLA applies to private sector employers with 50 or more employees, as well as to public agencies. Public agencies include state, local, and federal governments, as well as public schools. Under the FMLA, employees may take unpaid, job-protected leave for specific family and medical reasons. This includes taking leave under the FMLA for mental health care. Qualified individuals may even request FMLA leave as a reasonable accommodation. The law outlines the procedure for calculating FMLA leave in most circumstances. Specifically, covered employees may receive:
- Twelve workweeks of leave in a 12-month period for qualifying reasons.
- Twenty-six workweeks of leave during a single 12-month period to care for a covered servicemember with a serious injury or illness. The eligible employee must be the servicemember’s spouse, son, daughter, parent, or next of kin (military caregiver leave).
To qualify for FMLA leave, an employee of a covered employer must have been employed for at least 12 months. They must have also worked at least 1,250 hours during the 12-month period right before their FMLA leave.
How Does the PAID Program Work?
Chiefly, the Program was reinstated to help employers accomplish the following:
- Conduct self-audits to identify potential FLSA or FMLA violations
- Work with the DOL’s Wage & Hour Division (WHD) to correct FLSA or FMLA violations
- Pay back wages (if any) or implement other remedies
It is essential to note that the Program is voluntary. Specifically, it was created to promote compliance without resorting to litigation related to minimum wage, overtime, and FMLA leave.
Employer Takeaways
In conclusion, to participate in the PAID program, employers must meet specific qualifications, including being covered under the FMLA or the FLSA. After it is confirmed that the business must comply with either law, the company must then review compliance assistance materials. According to the DOL, this material helps employers understand the Program and their obligations regarding minimum wage, overtime, and medical leave.
The U.S. Department of Labor (DOL) has reinstated its PAID Program, which helps employers resolve FLSA and FMLA violations without litigation. Employers should utilize this program to ensure compliance with FMLA regulations, using the DOL’s resources, including the FMLA compliance guide, to avoid legal issues.
Lastly, for additional information, interested parties may visit the Compliance Assistance page or contact the DOL at 1-866-487-9243.
