New York Sues DOL for “PAID” Data

August 7, 2018

New York State has filed a lawsuit against the Department of Labor (DOL), asking the court to compel the Department to respond to its Freedom of Information Act (FOIA) request for documents on DOL’s “Payroll Audit Independent Determination” (PAID) Program.

The state alleges that the six-month pilot PAID Program allows employers to circumvent potential state prosecution or civil penalties for violations of state-based employment laws by paying back pay under federal statutes.

“The PAID Program is nothing more than a get-out-of-jail-free card for predatory employers,” said New York Attorney General Barbara Underwood. “New York workers have a right to know why the Secretary of Labor decided to let employers off the hook when they don’t pay their workers. The Labor Department failed to provide required information — so we’re taking them to court to get the information to which we are legally entitled.”

The PAID Program was announced by DOL earlier this year and is designed to resolve potential wage and hour and overtime violations quickly and without the expense and difficulties associated with litigation. All employers covered by the Fair Labor Standards Act (FLSA) are eligible to participate, but may not do so if the claim at issue is already being investigated by a state or is the subject of litigation.

Employers who detect an issue with back wages or unpaid overtime can contact DOL for a quick resolution. Once agreed by the employer and DOL, the Department sends forms to the employee that contain the proposed settlement terms and a general release from further liability regarding the specific claims. Once signed, the employer distributes the funds and the matter is “closed.” Under the PAID Program, there are no liquidated damages, interest, or penalties.