New Bill Proposes 'PAID' Program for Employers to Self-Correct Wage Errors: Faster Back Pay or Less Accountability?

A new piece of legislation, the "Ensuring Workers Get PAID Act of 2025," is proposing a permanent program based on a 2018 pilot. It aims to let employers voluntarily fix unintentional mistakes in paying minimum wage or overtime required by the Fair Labor Standards Act (FLSA). The core idea is the Payroll Audit Independent Determination (PAID) program, designed to get back wages paid faster by encouraging employers to self-report and settle up.

How the PAID Program Works (The Nuts and Bolts)

Here's the breakdown: An employer realizes they messed up on pay (think miscalculated overtime or minimum wage errors). If they aren't already being investigated or sued for it, they can apply for the PAID program in 'good faith' (Sec 3). This involves doing a 'self-audit' to figure out who was underpaid, by how much, and when. They submit this info, along with proof they've fixed the underlying issue, to the Department of Labor's Wage and Hour Division.

The Administrator then has 30 days to review the application (Sec 4). If it looks accurate and the employer meets the criteria (like no similar violations in the past 5 years), the Administrator approves it and supervises the settlement. The employer gets official release forms to give affected employees, detailing the back pay owed. Crucially, employees then get a choice: accept the payment and waive their right to sue for that specific issue, or decline the offer and keep their legal options open. Accepting means getting the full amount calculated in the self-audit.

The Pitch: Faster Fixes, Less Hassle?

The bill points to pilot program data suggesting this approach could be efficient (Sec 2). The findings claim the pilot recovered over $4.1 million for nearly 7,500 workers, with higher average payouts per case and much faster resolution times compared to traditional investigations (19 hours vs. 41 hours average). For workers, the potential plus is getting owed wages quicker without a lengthy fight. For employers, it's a path to resolve potentially costly mistakes without facing additional penalties or drawn-out legal battles, provided the violation was unintentional.

The Catch: Who's Really Benefiting?

While faster back pay sounds good, there are some potential wrinkles. The system relies heavily on the employer's own audit. Will companies always calculate the full amount owed, or might they lowball it, knowing employees might take a smaller, faster payout rather than risk a complex legal challenge? The bill says the Administrator reviews the calculations, but the process starts with the employer's numbers.

There's also a significant protection for employers: if their PAID application is denied, the information they submitted generally can't be used against them in a later investigation (Sec 4). This raises questions about accountability, especially for employers whose applications might reveal serious issues but get rejected on technicalities. Furthermore, the program specifically excludes certain workers, like those on H-1B, H-2B, or H-2A visas (Sec 3), leaving them out of this potential resolution path. While the bill adds protection against retaliation for employees who participate (or don't) in a settlement (Sec 4), the core tension remains: does this streamline compliance or create an easier out for employers at the potential expense of workers getting everything they're legally owed?