What This Bill Does
This bill creates a new Payroll Audit Independent Determination program within the Department of Labor. The program lets employers voluntarily fix unpaid wages by conducting their own audits and then settling with workers who were owed money. Employees can either accept the settlement or keep their right to sue the employer.
Who It Affects
- Employers who want to voluntarily fix wage violations
- Workers who were underpaid on minimum wage or overtime
- The Wage and Hour Division of the Department of Labor
- Employees of federal, state and local governments
Key Provisions
- The Administrator of the Wage and Hour Division must establish the program to help employers voluntarily fix unpaid minimum wages or overtime violations (Sec. 4(a))
- Employers applying must submit a self-audit (an audit they conduct themselves) showing which workers were underpaid, how much they owe each worker, and proof they fixed the problem (Sec. 4(b)(2))
- The Administrator has 30 days to approve or reject applications, and can ask employers to provide more information or change their applications (Sec. 4(c)(1) and (c)(2)(A))
- Workers can accept the settlement offer and give up their right to sue the company, or decline the offer and keep their right to sue (Sec. 4(d)(2))
- Employers cannot be investigated based on information they submit in their application, with limited exceptions for child labor or safety issues (Sec. 4(e)(1))
- The government cannot require employers to pay any fees to participate in the program (Sec. 4(e)(3))
What Changes
If this bill becomes law, employers will have a new way to voluntarily fix wage violations without facing penalties. Workers affected by underpayment will get a chance to receive back wages quickly through this program. The law also adds new protections against retaliation (unfair treatment by an employer) for workers who accept or decline settlement offers under this program (Sec. 4(f)).
Important Definitions
- "Affected employee" means a worker harmed by a minimum wage or overtime violation
- "Self-audit" means an employer's own investigation to find and fix wage calculation mistakes
- "Good faith" means the employer is not currently being investigated or sued for wage violations when they apply
- "Employee" includes both current and former workers
Effective Date
Not specified in bill text
II
118TH CONGRESS
1ST SESSION
S. 122
To establish the Payroll Audit Independent Determination program in the
Department of Labor.
IN THE SENATE OF THE UNITED STATES
JANUARY 26, 2023
Mr. BRAUN introduced the following bill; which was read twice and referred
to the Committee on Health, Education, Labor, and Pensions
A BILL
To establish the Payroll Audit Independent Determination
program in the Department of Labor.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Ensuring Workers Get
4
PAID Act of 2023’’.
5
SEC. 2. FINDINGS.
6
Congress finds the following:
7
(1) In 2018, the Department of Labor launched
8
the nationwide Payroll Audit Independent Deter-
9
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mination pilot program (referred to in this section as
1
‘‘PAID pilot program’’).
2
(2) The Secretary of Labor, acting through the
3
Administrator of the Wage and Hour Division, es-
4
tablished the PAID pilot program to complement en-
5
forcement and compliance assistance tools under-
6
taken by the Wage and Hour Division of the De-
7
partment of Labor.
8
(3) The Secretary has a longstanding practice
9
of providing self-audit and office audit programs, as
10
noted by Secretary Marty Walsh in a response for
11
the record following a hearing before the Committee
12
on Education and Labor of the House of Represent-
13
atives on June 9, 2021.
14
(4) The Wage and Hour Division, through the
15
PAID pilot program, worked with employers on a
16
voluntary basis to remedy unintentional violations of
17
the Fair Labor Standards Act of 1938 (29 U.S.C.
18
201 et seq.), which is the Federal statute estab-
19
lishing minimum wage, overtime pay, recordkeeping,
20
and youth-employment requirements affecting em-
21
ployees in the private sector and in Federal, State,
22
and local governments.
23
(5) The PAID pilot program yielded positive re-
24
sults for employers and employees. Between April 1,
25
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2018, and September 15, 2019, the Wage and Hour
1
Division concluded 74 PAID pilot program cases,
2
representing less than one percent of all compliance
3
actions under the Fair Labor Standards Act of
4
1938, with a total of $4,131,238 in back wages paid
5
to 7,429 employees through such PAID pilot pro-
6
gram cases.
7
(6) Self-audits through the PAID pilot program
8
by employers returned more back wages to employ-
9
ees in less time than compliance actions overall. In
10
fact, during the period described in paragraph (5)—
11
(A) the average back wages paid per case
12
for PAID pilot program cases ($55,828) were
13
more than 4 times the average back wages paid
14
per compliance action ($11,355);
15
(B) the average back wages paid per en-
16
forcement hour for PAID pilot program cases
17
($2,864) was more than 10 times greater than
18
the average back wages paid per enforcement
19
hour for compliance actions ($279);
20
(C) on average, nearly 10 times more em-
21
ployees received back wages in each PAID pilot
22
program case than in investigations conducted
23
using traditional methods;
24
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(D) self-audits through the PAID pilot
1
program averaged 19 hours per case as com-
2
pared to 41 hours per case for the Secretary
3
conducted using traditional methods; and
4
(E) self-audits through the PAID pilot
5
program reached employers that the Wage and
6
Hour Division would not typically prioritize for
7
enforcement, including government establish-
8
ments and industry sectors with higher wage
9
occupations.
10
SEC. 3. DEFINITIONS.
11
In this Act:
12
(1) AFFECTED
EMPLOYEE.—The term ‘‘af-
13
fected employee’’ means an employee affected by a
14
violation of a minimum wage or overtime hours re-
15
quirement of the Fair Labor Standards Act of 1938
16
(29 U.S.C. 201 et seq.), excluding any employee
17
subject to prevailing wage requirements under the
18
H–1B, H–2B, or H–2A visa programs, subchapter
19
IV of chapter 31 of title 40, United States Code
20
(commonly referred to as the ‘‘Davis-Bacon Act’’),
21
or chapter 67 of title 41, United States Code (com-
22
monly known as the ‘‘Service Contract Act’’).
23
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(2) ADMINISTRATOR.—The term ‘‘Adminis-
1
trator’’ means the Administrator of the Wage and
2
Hour Division of the Department of Labor.
3
(3) EMPLOYEE.—The term ‘‘employee’’—
4
(A) has the meaning given such term in
5
section 3 of the Fair Labor Standards Act of
6
1938 (29 U.S.C. 203); and
7
(B) with respect to an employer, includes
8
a former employee of such employer.
9
(4) EMPLOYER.—The term ‘‘employer’’ has the
10
meaning given such term in section 3 of such Act.
11
(5) GOOD
FAITH.—The term ‘‘good faith’’
12
means, with respect to an employer applying for par-
13
ticipation in the Payroll Audit Independent Deter-
14
mination program established under section 4, that
15
such employer is not, at the time such employer sub-
16
mits an application for such program—
17
(A) under investigation by the Secretary
18
for an alleged violation of a minimum wage or
19
overtime hours requirement of the Fair Labor
20
Standards Act of 1938 (29 U.S.C. 201 et seq.);
21
or
22
(B) subject to a lawsuit related to an al-
23
leged violation of such a requirement.
24
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(6) SECRETARY.—The term ‘‘Secretary’’ means
1
the Secretary of Labor.
2
(7) SELF-AUDIT.—The term ‘‘self-audit’’ means
3
an audit conducted by an employer to resolve inac-
4
curacies by the employer in the computation of
5
wages and overtime compensation required under
6
the Fair Labor Standards Act of 1938 within the
7
statute of limitations described in section 6(a) of the
8
Portal-to-Portal Act of 1947 (29 U.S.C. 255(a)).
9
SEC. 4. PAYROLL AUDIT INDEPENDENT DETERMINATION
10
PROGRAM.
11
(a) PROGRAM ESTABLISHMENT.—The Administrator
12
shall establish a Payroll Audit Independent Determination
13
program (referred to in this section as the ‘‘program’’)
14
to foster collaboration with employers that inadvertently
15
violate the Fair Labor Standards Act of 1938 (29 U.S.C.
16
201 et seq.) to voluntarily remedy, within the statute of
17
limitations described in section 6(a) of the Portal-to-Por-
18
tal Act of 1947 (29 U.S.C. 255(a)), unpaid minimum
19
wages or overtime compensation owed to any affected em-
20
ployee under the Fair Labor Standards Act of 1938.
21
(b) APPLICATION REQUIREMENTS.—
22
(1) RESOURCES
FOR
COMPLIANCE
ASSIST-
23
ANCE.—Not later than 30 days after the date of en-
24
actment of this Act, the Administrator shall make
25
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•S 122 IS
available to employers resources for assistance in
1
complying with the Fair Labor Standards Act of
2
1938, including content regarding wage and hour re-
3
quirements, which shall be offered online, through
4
printed materials, and through other outreach activi-
5
ties.
6
(2) APPLICATION.—An employer seeking to
7
participate in the program shall submit an applica-
8
tion to the Administrator that includes—
9
(A) materials related to and the results of
10
a self-audit, including—
11
(i) an identification of any practice of
12
such employer identified in a self-audit
13
that may violate a minimum wage or over-
14
time compensation requirement of the Fair
15
Labor Standards Act of 1938; and
16
(ii) a list of each employee who may
17
be an affected employee with respect to
18
such violation, including—
19
(I) the period of time such em-
20
ployee would have been affected by
21
such violation;
22
(II) payroll records related to
23
such employee for such period with in-
24
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formation on the hours of work per-
1
formed by such employee;
2
(III) calculations of unpaid min-
3
imum wages or overtime compensation
4
owed to such employee under the Fair
5
Labor Standards Act of 1938 with a
6
description of the methodology of such
7
calculation and supporting evidence;
8
and
9
(IV) contact information for such
10
employee;
11
(B) an explanation of the scope of poten-
12
tial violations of a minimum wage or overtime
13
compensation requirement of such Act for inclu-
14
sion in a release of claims under subsection (d);
15
(C) an assurance that any practice of such
16
employer that violates a minimum wage or over-
17
time compensation requirement of the Fair
18
Labor Standards Act of 1938 that is identified
19
in the self-audit has been corrected to comply
20
with such Act;
21
(D) an assurance that such employer has,
22
prior to submitting such application, reviewed
23
the compliance assistance resources made avail-
24
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able under paragraph (1) and all program in-
1
formation, terms, and requirements;
2
(E) an assurance that, on the date of sub-
3
mission of such application, such employer—
4
(i) is not involved in any litigation re-
5
garding any practice of such employer that
6
is identified in the self-audit; and
7
(ii) has not received any communica-
8
tions from an employee or a representative
9
of an employee seeking to litigate or settle
10
claims related to any such practice; and
11
(F) an assurance that no employee listed
12
in subparagraph (A)(ii) is subject to a pre-
13
vailing wage requirement under the H–1B, H–
14
2B, or H–2A visa programs, subchapter IV of
15
chapter 31 of title 40, United States Code
16
(commonly referred to as the ‘‘Davis-Bacon
17
Act’’), or chapter 67 of title 41, United States
18
Code (commonly known as the ‘‘Service Con-
19
tract Act’’).
20
(c) APPLICATION REVIEW AND APPROVAL.—
21
(1) REVIEW AND AMENDMENT.—The Adminis-
22
trator shall review each application submitted by an
23
employer under subsection (b)(2). As part of such
24
review, the Administrator shall—
25
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(A) as necessary, consult with such em-
1
ployer regarding—
2
(i) the self-audit and supporting mate-
3
rials submitted in the application; and
4
(ii) the process for approval of such
5
application and settlement of unpaid min-
6
imum wages or overtime compensation
7
owed to any affected employee under the
8
Fair Labor Standards Act of 1938 (29
9
U.S.C. 201 et seq.);
10
(B) inform such employer in a timely man-
11
ner and prior to a determination on the ap-
12
proval of the application if additional informa-
13
tion is needed to assess the unpaid minimum
14
wages or overtime compensation owed to any
15
affected employee for the violations of such Act
16
identified in the application through the self-
17
audit; and
18
(C) provide such employer an opportunity
19
to amend such application to revise the scope of
20
the practices of such employer that violate a
21
minimum wage or overtime compensation re-
22
quirement of the Fair Labor Standards Act of
23
1938 that are identified in the application
24
through self-audit, to update the list of affected
25
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•S 122 IS
employees with respect to the practices at issue
1
in the self-audit, and to update the calculations
2
of unpaid minimum wages or overtime com-
3
pensation owed to any affected employee as a
4
result of such violations.
5
(2) APPROVAL.—
6
(A) IN GENERAL.—If the conditions under
7
subparagraph (B) are satisfied with respect to
8
an application submitted under subsection
9
(b)(2), the Administrator shall—
10
(i) approve the application—
11
(I) in the case the application
12
has not been amended under para-
13
graph (1)(C), not later than 30 days
14
after such submission; or
15
(II) in the case the application
16
has been amended under paragraph
17
(1)(C), not later than 30 days after
18
the date of submission of such amend-
19
ed application; and
20
(ii) supervise the settlement under
21
subsection (d), including the payment of
22
any unpaid minimum wages or overtime
23
compensation under the Fair Labor Stand-
24
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ards Act of 1938 (29 U.S.C. 201 et seq.)
1
required through such settlement.
2
(B) CONDITIONS FOR APPROVAL.—An ap-
3
plication submitted under subsection (b)(2)
4
shall be approved under subparagraph (A) if—
5
(i) within the scope of the violations
6
identified by the employer through the ap-
7
plication or an amendment to the applica-
8
tion under paragraph (1)(C), the Adminis-
9
trator verifies that the self-audit and cal-
10
culation of unpaid minimum wages or over-
11
time compensation owed to any affected
12
employee under the Fair Labor Standards
13
Act of 1938 submitted in such application
14
or amendment are accurate; and
15
(ii) the employer submitting the appli-
16
cation—
17
(I) is determined to be acting in
18
good faith regarding violations of the
19
Fair Labor Standards Act of 1938
20
identified in such application or
21
amendment;
22
(II) has not been found by the
23
Administrator or any court of law to
24
have violated a minimum wage or
25
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overtime compensation requirement of
1
such Act during the 5 years imme-
2
diately preceding submission of such
3
application; and
4
(III) has not been approved for
5
participation in the program prior to
6
the submission of such application,
7
unless—
8
(aa) such participation was
9
for a distinct violation of the
10
Fair Labor Standards Act of
11
1938 than the practice identified
1
[Text truncated for display. Full text available on Congress.gov.]