Ensuring Workers Get PAID Act of 2023

Subjects: Labor and Employment

Summary:  <p><strong>Ensuring Workers Get PAID Act of 202</strong><b>3</b></p> <p>This bill reestablishes the Payroll Audit Independent Determination program, which is administered by the Department of Labor and allows employers to self-report federal minimum wage and overtime compensation violations as an alternative to litigation.</p> <p>Employers may apply to the program by submitting certain information from a self-audit that includes calculations of any unpaid minimum or overtime wages. Labor must verify the calculations and, if the application is approved, supervise a settlement with affected employees that provides payment of any unpaid wages. Employees who accept a settlement under the program waive their private right of action to recover the unpaid wages provided under the settlement.</p>

<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 122 Introduced in Senate (IS)]

&lt;DOC&gt;






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 Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Ensuring Workers Get PAID Act of 
2023''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) In 2018, the Department of Labor launched the 
        nationwide Payroll Audit Independent Determination pilot 
        program (referred to in this section as ``PAID pilot 
        program'').
            (2) The Secretary of Labor, acting through the 
        Administrator of the Wage and Hour Division, established the 
        PAID pilot program to complement enforcement and compliance 
        assistance tools undertaken by the Wage and Hour Division of 
        the Department of Labor.
            (3) The Secretary has a longstanding practice of providing 
        self-audit and office audit programs, as noted by Secretary 
        Marty Walsh in a response for the record following a hearing 
        before the Committee on Education and Labor of the House of 
        Representatives on June 9, 2021.
            (4) The Wage and Hour Division, through the PAID pilot 
        program, worked with employers on a voluntary basis to remedy 
        unintentional violations of the Fair Labor Standards Act of 
        1938 (29 U.S.C. 201 et seq.), which is the Federal statute 
        establishing minimum wage, overtime pay, recordkeeping, and 
        youth-employment requirements affecting employees in the 
        private sector and in Federal, State, and local governments.
            (5) The PAID pilot program yielded positive results for 
        employers and employees. Between April 1, 2018, and September 
        15, 2019, the Wage and Hour Division concluded 74 PAID pilot 
        program cases, representing less than one percent of all 
        compliance actions under the Fair Labor Standards Act of 1938, 
        with a total of $4,131,238 in back wages paid to 7,429 
        employees through such PAID pilot program cases.
            (6) Self-audits through the PAID pilot program by employers 
        returned more back wages to employees in less time than 
        compliance actions overall. In fact, during the period 
        described in paragraph (5)--
                    (A) the average back wages paid per case for PAID 
                pilot program cases ($55,828) were more than 4 times 
                the average back wages paid per compliance action 
                ($11,355);
                    (B) the average back wages paid per enforcement 
                hour for PAID pilot program cases ($2,864) was more 
                than 10 times greater than the average back wages paid 
                per enforcement hour for compliance actions ($279);
                    (C) on average, nearly 10 times more employees 
                received back wages in each PAID pilot program case 
                than in investigations conducted using traditional 
                methods;
                    (D) self-audits through the PAID pilot program 
                averaged 19 hours per case as compared to 41 hours per 
                case for the Secretary conducted using traditional 
                methods; and
                    (E) self-audits through the PAID pilot program 
                reached employers that the Wage and Hour Division would 
                not typically prioritize for enforcement, including 
                government establishments and industry sectors with 
                higher wage occupations.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Affected employee.--The term ``affected employee'' 
        means an employee affected by a violation of a minimum wage or 
        overtime hours requirement of the Fair Labor Standards Act of 
        1938 (29 U.S.C. 201 et seq.), excluding any employee subject to 
        prevailing wage requirements under the H-1B, H-2B, or H-2A visa 
        programs, subchapter IV of chapter 31 of title 40, United 
        States Code (commonly referred to as the ``Davis-Bacon Act''), 
        or chapter 67 of title 41, United States Code (commonly known 
        as the ``Service Contract Act'').
            (2) Administrator.--The term ``Administrator'' means the 
        Administrator of the Wage and Hour Division of the Department 
        of Labor.
            (3) Employee.--The term ``employee''--
                    (A) has the meaning given such term in section 3 of 
                the Fair Labor Standards Act of 1938 (29 U.S.C. 203); 
                and
                    (B) with respect to an employer, includes a former 
                employee of such employer.
            (4) Employer.--The term ``employer'' has the meaning given 
        such term in section 3 of such Act.
            (5) Good faith.--The term ``good faith'' means, with 
        respect to an employer applying for participation in the 
        Payroll Audit Independent Determination program established 
        under section 4, that such employer is not, at the time such 
        employer submits an application for such program--
                    (A) under investigation by the Secretary for an 
                alleged violation of a minimum wage or overtime hours 
                requirement of the Fair Labor Standards Act of 1938 (29 
                U.S.C. 201 et seq.); or
                    (B) subject to a lawsuit related to an alleged 
                violation of such a requirement.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Labor.
            (7) Self-audit.--The term ``self-audit'' means an audit 
        conducted by an employer to resolve inaccuracies by the 
        employer in the computation of wages and overtime compensation 
        required under the Fair Labor Standards Act of 1938 within the 
        statute of limitations described in section 6(a) of the Portal-
        to-Portal Act of 1947 (29 U.S.C. 255(a)).

SEC. 4. PAYROLL AUDIT INDEPENDENT DETERMINATION PROGRAM.

    (a) Program Establishment.--The Administrator shall establish a 
Payroll Audit Independent Determination program (referred to in this 
section as the ``program'') to foster collaboration with employers that 
inadvertently violate the Fair Labor Standards Act of 1938 (29 U.S.C. 
201 et seq.) to voluntarily remedy, within the statute of limitations 
described in section 6(a) of the Portal-to-Portal Act of 1947 (29 
U.S.C. 255(a)), unpaid minimum wages or overtime compensation owed to 
any affected employee under the Fair Labor Standards Act of 1938.
    (b) Application Requirements.--
            (1) Resources for compliance assistance.--Not later than 30 
        days after the date of enactment of this Act, the Administrator 
        shall make available to employers resources for assistance in 
        complying with the Fair Labor Standards Act of 1938, including 
        content regarding wage and hour requirements, which shall be 
        offered online, through printed materials, and through other 
        outreach activities.
            (2) Application.--An employer seeking to participate in the 
        program shall submit an application to the Administrator that 
        includes--
                    (A) materials related to and the results of a self-
                audit, including--
                            (i) an identification of any practice of 
                        such employer identified in a self-audit that 
                        may violate a minimum wage or overtime 
                        compensation requirement of the Fair Labor 
                        Standards Act of 1938; and
                            (ii) a list of each employee who may be an 
                        affected employee with respect to such 
                        violation, including--
                                    (I) the period of time such 
                                employee would have been affected by 
                                such violation;
                                    (II) payroll records related to 
                                such employee for such period with 
                                information on the hours of work 
                                performed by such employee;
                                    (III) calculations of unpaid 
                                minimum wages or overtime compensation 
                                owed to such employee under the Fair 
                                Labor Standards Act of 1938 with a 
                                description of the methodology of such 
                                calculation and supporting evidence; 
                                and
                                    (IV) contact information for such 
                                employee;
                    (B) an explanation of the scope of potential 
                violations of a minimum wage or overtime compensation 
                requirement of such Act for inclusion in a release of 
                claims under subsection (d);
                    (C) an assurance that any practice of such employer 
                that violates a minimum wage or overtime compensation 
                requirement of the Fair Labor Standards Act of 1938 
                that is identified in the self-audit has been corrected 
                to comply with such Act;
                    (D) an assurance that such employer has, prior to 
                submitting such application, reviewed the compliance 
                assistance resources made available under paragraph (1) 
                and all program information, terms, and requirements;
                    (E) an assurance that, on the date of submission of 
                such application, such employer--
                            (i) is not involved in any litigation 
                        regarding any practice of such employer that is 
                        identified in the self-audit; and
                            (ii) has not received any communications 
                        from an employee or a representative of an 
                        employee seeking to litigate or settle claims 
                        related to any such practice; and
                    (F) an assurance that no employee listed in 
                subparagraph (A)(ii) is subject to a prevailing wage 
                requirement under the H-1B, H-2B, or H-2A visa 
                programs, subchapter IV of chapter 31 of title 40, 
                United States Code (commonly referred to as the 
                ``Davis-Bacon Act''), or chapter 67 of title 41, United 
                States Code (commonly known as the ``Service Contract 
                Act'').
    (c) Application Review and Approval.--
            (1) Review and amendment.--The Administrator shall review 
        each application submitted by an employer under subsection 
        (b)(2). As part of such review, the Administrator shall--
                    (A) as necessary, consult with such employer 
                regarding--
                            (i) the self-audit and supporting materials 
                        submitted in the application; and
                            (ii) the process for approval of such 
                        application and settlement of unpaid minimum 
                        wages or overtime compensation owed to any 
                        affected employee under the Fair Labor 
                        Standards Act of 1938 (29 U.S.C. 201 et seq.);
                    (B) inform such employer in a timely manner and 
                prior to a determination on the approval of the 
                application if additional information is needed to 
                assess the unpaid minimum wages or overtime 
                compensation owed to any affected employee for the 
                violations of such Act identified in the application 
                through the self-audit; and
                    (C) provide such employer an opportunity to amend 
                such application to revise the scope of the practices 
                of such employer that violate a minimum wage or 
                overtime compensation requirement of the Fair Labor 
                Standards Act of 1938 that are identified in the 
                application through self-audit, to update the list of 
                affected employees with respect to the practices at 
                issue in the self-audit, and to update the calculations 
                of unpaid minimum wages or overtime compensation owed 
                to any affected employee as a result of such 
                violations.
            (2) Approval.--
                    (A) In general.--If the conditions under 
                subparagraph (B) are satisfied with respect to an 
                application submitted under subsection (b)(2), the 
                Administrator shall--
                            (i) approve the application--
                                    (I) in the case the application has 
                                not been amended under paragraph 
                                (1)(C), not later than 30 days after 
                                such submission; or
                                    (II) in the case the application 
                                has been amended under paragraph 
                                (1)(C), not later than 30 days after 
                                the date of submission of such amended 
                                application; and
                            (ii) supervise the settlement under 
                        subsection (d), including the payment of any 
                        unpaid minimum wages or overtime compensation 
                        under the Fair Labor Standards Act of 1938 (29 
                        U.S.C. 201 et seq.) required through such 
                        settlement.
                    (B) Conditions for approval.--An application 
                submitted under subsection (b)(2) shall be approved 
                under subparagraph (A) if--
                            (i) within the scope of the violations 
                        identified by the employer through the 
                        application or an amendment to the application 
                        under paragraph (1)(C), the Administrator 
                        verifies that the self-audit and calculation of 
                        unpaid minimum wages or overtime compensation 
                        owed to any affected employee under the Fair 
                        Labor Standards Act of 1938 submitted in such 
                        application or amendment are accurate; and
                            (ii) the employer submitting the 
                        application--
                                    (I) is determined to be acting in 
                                good faith regarding violations of the 
                                Fair Labor Standards Act of 1938 
                                identified in such application or 
                                amendment;
                                    (II) has not been found by the 
                                Administrator or any court of law to 
                                have violated a minimum wage or 
                                overtime compensation requirement of 
                                such Act during the 5 years immediately 
                                preceding submission of such 
                                application; and
                                    (III) has not been approved for 
                                participation in the program prior to 
                                the submission of such application, 
                                unless--
                                            (aa) such participation was 
                                        for a distinct violation of the 
                                        Fair Labor Standards Act of 
                                        1938 than the practice 
                                        identified in the self-audit 
                                        under subsection (b)(2); and
                                            (bb) such employer has 
                                        submitted the necessary 
                                        materials for the Administrator 
                                        to verify that such employer is 
                                        not engaging in the practice 
                                        addressed by the previous 
                                        participation of the employer 
                                        in the program.
    (d) Settlement.--
            (1) In general.--For each employer that submits an 
        application under subsection (b)(2) that is approved under 
        subsection (c)(2), the Administrator shall--
                    (A) provide to the employer a description of the 
                scope of the potential release of claims for violations 
                of minimum wage or overtime compensation requirements 
                of the Fair Labor Standards Act of 1938 (29 U.S.C. 201 
                et seq.) and a summary of any unpaid minimum wages or 
                overtime compensation owed to each affected employee 
                under such Act for such violations; and
                    (B) issue a release form to each affected employee 
                of such employer that describes the settlement terms, 
                which shall include a written explanation of--
                            (i) the waiver under paragraph (2)(B); and
                            (ii) the right of the affected employee 
                        receiving the offer for settlement to decline 
                        the offer for settlement and preserve any 
                        private right of action of the employee to 
                        recover any unpaid minimum wages or overtime 
                        compensation owed to the employee under the 
                        Fair Labor Standards Act of 1938 as a result of 
                        such violations.
            (2) Acceptance of settlement.--
                    (A) In general.--An affected employee offered a 
                settlement through a release form under paragraph 
                (1)(B) may accept or decline the offer.
                    (B) Waiver of private right of action.--The 
                acceptance by an affected employee of an offer of 
                settlement under subparagraph (A) shall, upon payment 
                in full of any amounts owed to the employee under the 
                settlement, constitute a waiver by such employee of any 
                right such employee may have under section 16 of the 
                Fair Labor Standards Act of 1938 (29 U.S.C. 216) to a 
                private right of action to recover unpaid minimum wages 
                or overtime compensation, including any liquidated 
                damages, for the violations addressed by the 
                settlement.
            (3) Payment of settlement.--For each affected employee that 
        accepts a settlement through a release form under paragraph 
        (1)(B), the employer shall--
                    (A) pay such employee the full amount of unpaid 
                minimum wages or overtime compensation owed to such 
                employee under the Fair Labor Standards Act of 1938 (29 
                U.S.C. 201 et seq.) for the violations addressed in the 
                settlement; and
                    (B) submit proof of payment of such full amount to 
                the Administrator.
    (e) Additional Requirements.--
            (1) Denials.--In the case of an application submitted by an 
        employer under subsection (b)(2) and not approved under 
        subsection (c)(2), the Administrator may not--
                    (A) use information submitted in the application in 
                an investigation against the employer;
                    (B) use the fact such employer applied to the 
                program as a basis for any future investigation, except 
                in a case in which the Administrator has reason to 
                believe that the health and safety of an employee is at 
                risk due to an alleged violation related to a 
                requirement enforced by the Secretary involving child 
                labor, agricultural worker protections, or housing or 
                transportation requirements under the H-2A or H-2B visa 
                programs; or
                    (C) communicate to any affected employee of such 
                employer in response to receipt of such application to 
                notify such employee of the private right of action of 
                such employee to resolve potential violations of the 
                Fair Labor Standards Act of 1938 (29 U.S.C. 201 et 
                seq.), particularly with respect to the wage practices 
                at issue in the self-audit.
            (2) Expansion of scope.--The Administrator may not expand 
        the scope of the violations to be investigated or settled 
        through an employer's participation in the program beyond the 
        violations identified by the employer in the application 
        submitted by the employer under subsection (b)(2) or the 
        amended application submitted by the employer under subsection 
        (c)(1)(C).
            (3) No payments required.--The Administrator may not 
        require any form of payment by an employer to apply, qualify, 
        or participate in the program.
            (4) Exemption from discovery.--Any information submitted in 
        an application to the program under subsection (b)(2), or an 
        amendment to such application under subsection (c)(1)(C), may 
        not be subject to discovery in a Federal or State court 
        proceeding without the consent of the employer that submitted 
        the application.
    (f) Retaliation.--Section 15(a)(3) of the Fair Labor Standards Act 
of 1938 (29 U.S.C. 215(a)(3)) is amended by inserting before the 
semicolon the following: ``, or has accepted or declined to accept an 
offer for settlement under section 4(d) of the Ensuring Workers Get 
PAID Act of 2023''.
                                 &lt;all&gt;
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