By Mark Adams
The United States Department of Labor (DOL) has announced two separate voluntary compliance programs.
The first is driven by the DOL’s Office of Federal Contract Compliance Programs (OFCCP) who are inviting federal contractors to voluntarily submit information about their efforts to wind down affirmative action programs following the revocation of Executive Order 11246 by Executive Order 14173 (as reported on in our EAlert that you can find here).
Under this program, federal contractors would log into the OFCCP Certification and submit a letter or narrative that describes what they have done to unwind their previous practices. Examples referenced by the OFCCP that may be relevant for such a submission include:
- Confirmation that race- or sex-based placement goals have been discontinued;
- Adjustments to leadership programs, mentorships, or training previously limited to specific demographic groups;
- Any changes made to compensation structures tied to DEI-related metrics;
- Updates to hiring or recruiting practices that previously used race or sex as a “plus factor”; and
- Removal of mandatory trainings focused on race- or gender-based content.
The deadline to participate in this program is September 25th. Interested federal contractors can do so today by visiting the portal here.
The second is driven by the DOL’s Wage and Hour Division (WHD) and called the “Payroll Audit Independent Determination” or PAID for short. The underlying objective is to encourage employers to do self-assessments of their pay practices to identify instances of improper payments of employees and to remedy those situations as quickly as possible.
The PAID program sets forth several steps for employers to go through:
#1 – Register and complete two compliance assistance review modules with WHD: https://www.dol.gov/agencies/whd/paid/compliance-assistance-reviews#flsa
Employers that are not eligible to register and take part include employers who have previously taken part in past PAID initiatives within the last 3 years to resolve violations, those found to have violated the FLSA within the past 3 years by a court or by the WHD or are currently party to such litigation or amid a current investigation.
#2 – Conduct a self-audit to identify:
- potential FLSA and/or FMLA violations that may have occurred in the last two years;
- which employees were affected within the last two years;
- the timeframes, within the last two years, in which each employee was affected; and
- the amount of back wages you believe are owed to each employee, and/or specify any other FMLA remedies that are necessary to be complying.
#3 – Report findings to the WHD District Office for review:
At this point, you will need to provide the following which will be evaluated by the WHD:
- The names, addresses, and phone numbers of all affected employees;
- Your back wage calculations along with supporting evidence and methodology used to make those calculations;
- Any other FMLA remedies described above, along with supporting evidence and methodology;
- Payroll records and any other relevant evidence;
- For FLSA violations, records demonstrating hours of work of each affected employee during the time frame at issue;
- For FMLA violations, records demonstrating the nature of the violation and impact to affected employee(s);
- Records to show that you have corrected the compensation and/or leave practices to comply with the FLSA and/or the FMLA;
- A concise explanation of the scope of the potential violations for possible inclusion in a release of liability;
- A certification that you reviewed all of the program’s information, terms, and compliance assistance materials; and
- A certification that you meet all eligibility criteria of the program
It is important to note two points here. First, those who go through these steps and submit their information to the WHD are not automatically admitted into the PAID program – it is still subject to WHD approving the request and they hold the discretion there. Second, employees who are directly paid by their employers for unpaid wages discovered during a self-audit prior to submitting their self-audit to WHD first for review and approval do not forgo or waive their rights.
#4 – Pay Employees Timely
Once the submission has been review and the employer has been accepted into the PAID program, the WHD will issue a summary of and forms describing settlement terms for the affected employees. Employers then have 15 days to pay employees – though have the choice nonetheless to accept or decline the payment (and employers cannot retaliate against employees who choose the later).
Both initiatives are designed to encourage employers to be more collaborative by demonstrating that their practices are in alignment with agency requirements and avoid adversarial situations that could materialize from individuals that could spawn audits or litigation. Whether they provide enough incentive for employers to step forward to engage is another story.