Technical corrections only. The changes between v1 and v2 are limited to updated legislative status information, additional sponsors, and formatting instructions for printing the reported bill. No substantive policy changes were made to the bill text.
Ensuring Workers Get PAID Act of 2025
- Sponsor
- Rep. Grothman, Glenn [R-WI-6]
- Committees
- Education and Workforce Committee (primary)
- Last action
- Mar 3, 2026
Bottom line
The bill creates a voluntary Department of Labor program for employers to self-audit and resolve unintentional wage violations, offering a quicker resolution for workers but requiring them to waive future litigation rights.
What it actually does
This bill establishes a permanent Payroll Audit Independent Determination (PAID) program within the Department of Labor. The program allows employers to voluntarily conduct self-audits to identify and remedy unintentional violations of minimum wage or overtime compensation requirements under the Fair Labor Standards Act (FLSA). Upon approval by the Administrator of the Wage and Hour Division, employers can settle these violations by paying back wages to affected employees, who in turn waive their private right of action for those specific claims.
Proponents argue
Supporters argue that the PAID program provides a more efficient and less adversarial mechanism for workers to recover unpaid wages compared to traditional enforcement methods or litigation. They point to the success of the pilot program, which returned more back wages to employees in less time and reached employers not typically prioritized for enforcement, demonstrating its effectiveness in promoting compliance and ensuring workers are compensated.
Opponents contend
Critics contend that by requiring employees to waive their private right of action and potential liquidated damages, the program may incentivize employers to underpay wages, knowing they can later settle for less than what might be awarded through litigation. They argue it could undermine worker protections under the FLSA and reduce the deterrent effect of potential lawsuits, potentially benefiting employers more than employees in the long run.
The bill is relatively concise and accessible, allowing an informed reader to understand its core provisions and implications within a reasonable timeframe.
Section 4(a)
Establishment of Payroll Audit Independent Determination (PAID) Program
This section formally establishes the PAID program within the Department of Labor. Its purpose is to foster collaboration with employers to voluntarily correct unintentional violations of the Fair Labor Standards Act (FLSA) regarding unpaid minimum wages or overtime compensation. The program aims to resolve these issues within the statute of limitations.
Supporters argue
Supporters argue this program is a valuable tool for encouraging voluntary compliance, allowing employers to proactively correct errors and ensuring workers receive back wages more quickly than through traditional enforcement or litigation. It complements existing enforcement efforts by focusing on unintentional violations.
Critics contend
Critics might argue that formalizing such a program could be seen as a 'get out of jail free' card for employers, potentially reducing the incentive for strict compliance from the outset. They may also question if the program adequately protects workers' rights compared to full legal recourse.
Tradeoffs
The provision balances the goal of encouraging employer compliance and quick wage recovery for employees against concerns that it might reduce the deterrent effect of full legal penalties for wage violations.
Section 4(b) and (c)
Application, Review, and Approval Process
These sections detail the requirements for employers to apply to the PAID program, including submitting self-audit results, proof of corrected practices, and assurances of no ongoing litigation. The Administrator reviews these applications, can request amendments, and approves them if the self-audit is accurate, the employer acts in good faith, has no prior FLSA violations in the last 5 years, and has not previously used the program for the same type of violation.
Section 4(d)
Settlement and Waiver of Private Right of Action
This section outlines the settlement process. If an application is approved, the Administrator provides settlement terms to the employer and a release form to each affected employee. Employees can accept or decline the offer. Acceptance, upon full payment of back wages, constitutes a waiver of the employee's private right of action under FLSA for the specific violations addressed by the settlement, including any liquidated damages.
Section 4(e)
Protections for Employers and Limitations on Administrator's Authority
This section includes several key protections for employers. If an application is denied, the Administrator cannot use the submitted information in an investigation against the employer (with limited exceptions for child labor or H-2A/H-2B visa program violations). The Administrator cannot expand the scope of violations beyond what the employer identified, require payment to participate, or subject application information to discovery in court without employer consent. The Administrator also cannot notify employees of their private right of action based on a denied application.
Defines 'good faith' for employer participation, requiring that an employer is not under investigation by the Secretary or subject to a lawsuit related to alleged minimum wage or overtime violations at the time of application.
Section 3(5)
Why it matters:Standard legislative practice to define terms upfront, though this definition is crucial for program eligibility.
Case for: Ensures that the program is genuinely for employers seeking to correct unintentional errors, not those already facing legal action or investigation.
Case against: Some might argue it's too restrictive, potentially excluding employers who, despite being under investigation for one issue, genuinely want to resolve other, unrelated unintentional violations.
Estimated impact: Significantly impacts which employers are eligible to participate, shaping the program's reach and focus.
Prohibits the Administrator from using information submitted in a denied application in an investigation against the employer, or using the application itself as a basis for future investigation, with narrow exceptions for health/safety risks related to child labor or H-2A/H-2B visa programs.
Section 4(e)(1)
Why it matters:This is a critical incentive for employer participation, designed to reduce perceived risk. Its placement ensures it's part of the program's operational rules.
Case for: This protection is vital for encouraging employers to voluntarily conduct self-audits and apply, as it mitigates the risk of self-incrimination if their application is not approved.
Case against: Critics might argue that this provision creates a 'shield' for employers, potentially allowing them to reveal violations without consequence if they fail to qualify for the program, thereby hindering the Department of Labor's enforcement capabilities.
Estimated impact: Crucially influences employer willingness to engage with the program, potentially increasing participation but also limiting DOL's investigative options in certain scenarios.
States that an employee's acceptance of a settlement offer, upon full payment, constitutes a waiver of their private right of action under FLSA for the violations addressed by the settlement, including liquidated damages.
Section 4(d)(2)(B)
Why it matters:This is a core mechanism of the program, providing legal finality for employers. Its placement within the settlement details is logical.
Case for: Provides legal certainty for employers who rectify unintentional errors and ensures a definitive resolution, encouraging them to participate. It also ensures employees receive back wages without the delays and costs of litigation.
Case against: This is a major point of contention for worker advocates, who argue that waiving the right to liquidated damages (often double the back wages) and private litigation significantly diminishes worker protections and the deterrent effect of FLSA.
Estimated impact: Fundamentally alters the legal recourse available to employees for settled violations, potentially reducing total compensation received compared to a successful lawsuit.