On July 24, 2025, the U.S. Department of Labor’s Wage and Hour Division (WHD) announced the return of its Payroll Audit Independent Determination (PAID) program, a voluntary initiative first introduced in 2018. The program allows employers to identify and correct inadvertent wage and hour violations under the Fair Labor Standards Act (FLSA) and now, leave violations under the Family and Medical Leave Act. 

The initial iteration of the PAID program provided a structured means for employers to self-audit and address FLSA compliance gaps related to minimum wage and overtime pay. By voluntarily disclosing these issues to WHD, employers could remedy back wage obligations without facing liquidated damages or civil monetary penalties, provided the violations were not willful or repeat offenses. After a period of suspension, WHD is now reviving the PAID program, signaling the Administration’s renewed focus on proactive compliance and employer accountability. 

A few key points to consider when it comes to the PAID program: 

• No Impact on State or Local Laws:  
  • Participation in the PAID program does not affect employee rights under state or local laws.
• The program has strict eligibility and certification requirements: 
  • Employers must apply and receive WHD approval to initiate a self-audit under PAID and certify they have not participated in PAID within the last three years. 
  • Employers must have no prior FLSA violations or pending litigation within the last three years and must certify they are not under current WHD investigation. 
  • Employers must disclose any recent employee complaints to WHD concerning the practices at issue. 
• Other Important Considerations: 
  • PAID has expanded its scope to include self-audits for certain FMLA violations. 
  • Employers must disclose their company name and the name of the person reaching out as part of the certification process. 
  • Form settlement documents will be issued by DOL, with payment confirmation required within 15 days. 
  • Settlement releases will be limited to identified violations and specific time periods, and WHD may not supervise payments or provide releases for state law violations. 

What Does it Mean 

The revised PAID program enables eligible employers to self-audit and resolve certain FLSA and FMLA violations, provided they meet strict eligibility criteria, disclose relevant information to WHD, and follow prescribed settlement procedures.  

However, voluntary participation is not without risk. Most notably, releases and settlements under the PAID program will be limited in scope and may have no impact on an employee’s ability to file a claim under state or local law based on the same core facts. There is also potential risk for employers who meet eligibility requirements but are ultimately declined participation; all potentially harmful facts that have been disclosed to the WHD may impact the company’s ability to address corrections quietly. The merit of the program  for the disclosure of potential FMLA violations, which have not historically been a WHD focus, is even less certain. While the potential to use the program to proactively mitigate a class action wage & hour complaint is arguably worth considering, such collective actions in the FMLA context are virtually non-existent, such that the benefits of a voluntary disclosure program are questionable at best.  

Given the complexity of the requirements and the potential legal ramifications of self-reporting and remediation, employers are strongly advised to consult with legal counsel before participating in the revised PAID program.