The U.S. Department of Labor (DOL) just launched a major new initiative to help employers voluntarily identify and correct workplace law violations—before a government investigation begins.
Under the umbrella of the agency’s newly expanded self-audit programs, employers can now take a proactive approach to compliance by reviewing their own wage practices, recordkeeping, and employee classifications, and potentially avoid penalties, litigation, or reputational damage.
What Employers Need to Know About the New DOL Self-Audit Program
On July 24, 2025, the DOL announced updates to six of its agency programs, each offering a pathway for employers, unions, and benefits administrators to voluntarily report and correct violations. For employers, the most important component is the Payroll Audit Independent Determination (PAID) program, managed by the Wage and Hour Division (WHD).
Originally launched as a pilot and now revived with additional support, the PAID program allows businesses to:
- Conduct internal audits of wage practices under the Fair Labor Standards Act (FLSA) or certain provisions of the Family and Medical Leave Act (FMLA);
- Report identified violations to the DOL (such as unpaid overtime or minimum wage shortfalls); and
- Pay back wages to employees in coordination with the DOL without penalties or litigation (provided certain conditions are met).
Benefits of Using the DOL’s Self-Audit and PAID Programs for Employers
Employers who use PAID or other DOL self-audit programs correctly can:
Resolve inadvertent violations before they lead to enforcement actions;
Avoid liquidated damages, penalties, and attorney’s fees;
Demonstrate good-faith compliance to employees and regulators; and
Reduce risk in advance of a potential DOL audit or employee complaint.
The DOL is encouraging use of these programs as part of a broader effort to build a “culture of compliance and trust,” in the words of Deputy Secretary Keith Sonderling.
Who Is Not Eligible for the DOL Self-Audit Program? Key Limitations for Employers
Participation in the PAID program is not available if:
- The employer is currently being investigated by the DOL’s Wage and Hour Division;
- The violation was previously resolved or is currently in litigation;
- The employer is involved in ongoing litigation (or arbitration) related to the same alleged violations; or
- The employer fails to pay all required back wages after approval.
Further, participation doesn’t shield employers from potential claims under state laws, which may provide broader wage protections than federal law.
Should Your Business Use the DOL’s Self-Audit or PAID Program?
If you’re concerned about past payroll practices or want to reduce your risk proactively, a guided legal audit can help you uncover—and correct—issues before they escalate. This is especially critical for employers with:
- Commission-based compensation models
- Overtime-eligible staff working off the clock
- Fluctuating workweeks or bonuses
- Incomplete or outdated job classifications
- Complex or multi-state employee structures
We routinely help employers navigate the PAID process and other self-audit programs in a way that maximizes protection and limits exposure.
Ready to Take a Closer Look?
If you’re considering a wage audit, or want help determining whether you qualify for these new voluntary programs, schedule a discovery call with us. We’ll help you decide on the right path forward.
Information contained in this blog is provided for informational purposes and does not constitute legal advice or opinion. You should consult with an attorney regarding the specifics of your matter or legal issue.
The post Client Alert: New DOL Self-Audit Program Lets Employers Fix Wage Violations Before a Costly Investigation first appeared on Morea Law LLC.