THE DOL’S “PAID” PROGRAM MAY NOT PAY OFF FOR EMPLOYERS

This review of the Department of Labor’s recently-announced Payroll Audit Independent Determination (“PAID”) program comes with side of skepticism.  With all new voluntary programs, trust but verify.

PAID was rolled out in March 2018 with much fanfare about its benefits.  PAID is a 6-month pilot program sponsored by the DOL’s Wage and Hour Division (WHD) whereby an employer can voluntarily engage in a self-audit of its payroll practices.  If that audit reveals suspected or actual violations of overtime or minimum wage provisions of federal law, the employer discloses those to the WHD.  Specifically, the employer must identify the violations, the affected employees, the timeframe, and a calculation of back wages owed to each affected employee.  The WHD then begins a process with the employer to identify and remedy violations.  The process will likely include the WHD asking for information which must then be provided. Continue reading

Sixth Circuit Deems Unlawful a Policy Requiring Employees to Repay Advanced “Draws” Upon Termination

The employer, hhgregg, Inc., has a compensation system where the sales employees (non-exempt) are paid commissions.  They are advanced a “draw” in any week in which they do not make enough sales to have the commission payments cover the minimum wage requirements.  The “draw” is then deducted from future commissions.  Upon termination, the employee – per policy – is required to immediately repay any outstanding draws.

A collective action was brought against hhgregg, and various wage and hour claims were asserted.  We are going to focus on one.

Interestingly, the employees did not focus on the policy which required them to repay any outstanding “draws” upon their termination.  In fact, the company represented it did not enforce that part of the policy.  But, the Court of Appeals found it quite interesting. Continue reading