HR-2299-119
Placed on the Union Calendar, Calendar No. 464.
Sponsored by Glenn Grothman (R-WI)
What it does
This bill would permanently establish the Payroll Audit Independent Determination (PAID) program within the Department of Labor's Wage and Hour Division. It would allow employers to voluntarily self-audit their payroll practices, report unintentional violations of minimum wage and overtime requirements under the Fair Labor Standards Act (FLSA), and pay back wages owed to affected employees in exchange for a supervised settlement. Employees who accept a settlement would receive full back wages but would waive their right to sue for additional liquidated damages; employees who decline may pursue private legal action. Employers currently under investigation or facing related lawsuits would be ineligible, and application information from denied employers could not be used against them in future enforcement actions.
Who benefits
Employers — particularly small and mid-sized businesses, government establishments, and firms in higher-wage industries — who have made unintentional payroll errors and want to correct them without litigation risk. Workers who receive back wages faster and in larger amounts per case than through traditional enforcement, based on the 2018–2019 pilot data. The Department of Labor's Wage and Hour Division, which would resolve more cases with fewer enforcement hours. Workers at employers the Division would not typically prioritize for investigation. Employers in sectors with complex overtime rules (e.g., healthcare, hospitality) who face genuine compliance difficulty.
Who is hurt
Workers who accept settlements would waive their right to liquidated damages — which under the FLSA can equal the amount of back wages owed — potentially leaving money on the table. Workers who are unaware of their rights or feel pressure to accept settlements may be disadvantaged. Plaintiffs' employment attorneys who handle FLSA private actions would see a reduction in potential cases. Workers covered by H-1B, H-2B, H-2A, Davis-Bacon, or Service Contract Act prevailing wage requirements are explicitly excluded from the program. Competing employers who comply fully with wage laws may face a disadvantage if non-compliant competitors can self-correct without penalty or reputational consequence.
Supporters argue
Supporters argue that the 2018–2019 PAID pilot delivered back wages to workers more efficiently than traditional enforcement: the average back wages per enforcement hour were more than 10 times higher ($2,864 vs. $279), and nearly 10 times more employees received back wages per case. They contend that many wage violations are unintentional and that a voluntary correction pathway incentivizes compliance, reaches employers the Wage and Hour Division would never audit, and gets money into workers' pockets faster — without requiring workers to navigate complex litigation.
Opponents argue
Opponents argue that the program systematically strips workers of their right to liquidated damages — a statutory remedy Congress specifically designed to deter wage theft — without requiring any penalty from the employer beyond paying what was already owed. They contend that shielding application materials from discovery and barring the Department of Labor from notifying workers of their private rights of action tilts the program heavily toward employer interests, and that the pilot's efficiency statistics reflect cherry-picked, cooperative cases rather than the broader universe of wage violations, including willful ones.
Constitutional context
Congress has broad authority to regulate wage and hour standards under the Commerce Clause (Art. I, §8, cl. 3), as affirmed in Wickard v. Filburn (1942) and the longstanding constitutional foundation of the FLSA itself. The bill modifies how the Department of Labor administers FLSA enforcement, which falls squarely within that authority. Post-Loper Bright (2024), any implementing regulations the Administrator issues would face independent judicial scrutiny rather than deference, though the bill's statutory text is detailed enough to limit significant agency discretion.
Checks and balances
The executive branch (Department of Labor/Wage and Hour Division) gains a new administrative program with structured discretion over approvals and settlements; Congress constrains that discretion through explicit eligibility criteria, timelines, and prohibitions on expanding investigation scope or using denied applications against employers.
Historical precedent
The Department of Labor operated a PAID pilot program from April 2018 to September 2019 under the Trump administration; the Biden administration discontinued it in 2021, and this bill would permanently codify a version of that program in statute.