Introduced in Senate — S. 2267

119th CONGRESS

1st Session

S. 2267

IN THE SENATE OF THE UNITED STATES

July 14, 2025

Mr. Sheehy (for himself, Mrs. Blackburn, and Mr. Budd) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions

A BILL

To establish the Payroll Audit Independent Determination program in the Department of Labor.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

Section 1. Short title

This Act may be cited as the Ensuring Workers Get PAID Act of 2025.

Sec. 2. Findings

Congress finds the following:

(1)

In 2018, the Department of Labor launched the nationwide Payroll Audit Independent Determination pilot program (referred to in this section as PAID pilot program).

(2)

The Secretary of Labor, acting through the Administrator of the Wage and Hour Division, established the PAID pilot program to complement enforcement and compliance assistance tools undertaken by the Wage and Hour Division of the Department of Labor.

(3)

The Secretary has a longstanding practice of providing self-audit and office audit programs, as noted by Secretary Marty Walsh in a response for the record following a hearing before the Committee on Education and Labor of the House of Representatives on June 9, 2021.

(4)

The Wage and Hour Division, through the PAID pilot program, worked with employers on a voluntary basis to remedy unintentional violations of the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.), which is the Federal statute establishing minimum wage, overtime pay, recordkeeping, and youth-employment requirements affecting employees in the private sector and in Federal, State, and local governments.

(5)

The PAID pilot program yielded positive results for employers and employees. Between April 1, 2018, and September 15, 2019, the Wage and Hour Division concluded 74 PAID pilot program cases, representing less than one percent of all compliance actions under the Fair Labor Standards Act of 1938, with a total of $4,131,238 in back wages paid to 7,429 employees through such PAID pilot program cases.

(6)

Self-audits through the PAID pilot program by employers returned more back wages to employees in less time than compliance actions overall. In fact, during the period described in paragraph (5)—

(A)

the average back wages paid per case for PAID pilot program cases ($55,828) were more than 4 times the average back wages paid per compliance action ($11,355);

(B)

the average back wages paid per enforcement hour for PAID pilot program cases ($2,864) was more than 10 times greater than the average back wages paid per enforcement hour for compliance actions ($279);

(C)

on average, nearly 10 times more employees received back wages in each PAID pilot program case than in investigations conducted using traditional methods;

(D)

self-audits through the PAID pilot program averaged 19 hours per case as compared to 41 hours per case for the Secretary conducted using traditional methods; and

(E)

self-audits through the PAID pilot program reached employers that the Wage and Hour Division would not typically prioritize for enforcement, including government establishments and industry sectors with higher wage occupations.

Sec. 3. Definitions

In this Act:

(1) Affected employee

The term affected employee means an employee affected by a violation of a minimum wage or overtime hours requirement of the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.), excluding any employee subject to prevailing wage requirements under the H–1B, H–2B, or H–2A visa programs, subchapter IV of chapter 31 of title 40, United States Code (commonly referred to as the Davis-Bacon Act), or chapter 67 of title 41, United States Code (commonly known as the Service Contract Act).

(2) Administrator

The term Administrator means the Administrator of the Wage and Hour Division of the Department of Labor.

(3) Employee

The term employee—

(A)

has the meaning given such term in section 3 of the Fair Labor Standards Act of 1938 (29 U.S.C. 203); and

(B)

with respect to an employer, includes a former employee of such employer.

(4) Employer

The term employer has the meaning given such term in section 3 of such Act.

(5) Good faith

The term good faith means, with respect to an employer applying for participation in the Payroll Audit Independent Determination program established under section 4, that such employer is not, at the time such employer submits an application for such program—

(A)

under investigation by the Secretary for an alleged violation of a minimum wage or overtime hours requirement of the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.); or

(B)

subject to a lawsuit related to an alleged violation of such a requirement.

(6) Secretary

The term Secretary means the Secretary of Labor.

(7) Self-audit

The term self-audit means an audit conducted by an employer to resolve inaccuracies by the employer in the computation of wages and overtime compensation required under the Fair Labor Standards Act of 1938 within the statute of limitations described in section 6(a) of the Portal-to-Portal Act of 1947 (29 U.S.C. 255(a)).

Sec. 4. Payroll Audit Independent Determination program

(a) Program establishment

The Administrator shall establish a Payroll Audit Independent Determination program (referred to in this section as the program) to foster collaboration with employers that inadvertently violate the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.) to voluntarily remedy, within the statute of limitations described in section 6(a) of the Portal-to-Portal Act of 1947 (29 U.S.C. 255(a)), unpaid minimum wages or overtime compensation owed to any affected employee under the Fair Labor Standards Act of 1938.

(b) Application requirements

(1) Resources for compliance assistance

Not later than 30 days after the date of enactment of this Act, the Administrator shall make available to employers resources for assistance in complying with the Fair Labor Standards Act of 1938, including content regarding wage and hour requirements, which shall be offered online, through printed materials, and through other outreach activities.

(2) Application

An employer seeking to participate in the program shall submit an application to the Administrator that includes—

(A)

materials related to and the results of a self-audit, including—

(i)

an identification of any practice of such employer identified in a self-audit that may violate a minimum wage or overtime compensation requirement of the Fair Labor Standards Act of 1938; and

(ii)

a list of each employee who may be an affected employee with respect to such violation, including—

(I)

the period of time such employee would have been affected by such violation;

(II)

payroll records related to such employee for such period with information on the hours of work performed by such employee;

(III)

calculations of unpaid minimum wages or overtime compensation owed to such employee under the Fair Labor Standards Act of 1938 with a description of the methodology of such calculation and supporting evidence; and

(IV)

contact information for such employee;

(B)

an explanation of the scope of potential violations of a minimum wage or overtime compensation requirement of such Act for inclusion in a release of claims under subsection (d);

(C)

an assurance that any practice of such employer that violates a minimum wage or overtime compensation requirement of the Fair Labor Standards Act of 1938 that is identified in the self-audit has been corrected to comply with such Act;

(D)

an assurance that such employer has, prior to submitting such application, reviewed the compliance assistance resources made available under paragraph (1) and all program information, terms, and requirements;

(E)

an assurance that, on the date of submission of such application, such employer—

(i)

is not involved in any litigation regarding any practice of such employer that is identified in the self-audit; and

(ii)

has not received any communications from an employee or a representative of an employee seeking to litigate or settle claims related to any such practice; and

(F)

an assurance that no employee listed in subparagraph (A)(ii) is subject to a prevailing wage requirement under the H–1B, H–2B, or H–2A visa programs, subchapter IV of chapter 31 of title 40, United States Code (commonly referred to as the Davis-Bacon Act), or chapter 67 of title 41, United States Code (commonly known as the Service Contract Act).

(c) Application review and approval

(1) Review and amendment

The Administrator shall review each application submitted by an employer under subsection (b)(2). As part of such review, the Administrator shall—

(A)

as necessary, consult with such employer regarding—

(i)

the self-audit and supporting materials submitted in the application; and

(ii)

the process for approval of such application and settlement of unpaid minimum wages or overtime compensation owed to any affected employee under the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.);

(B)

inform such employer in a timely manner and prior to a determination on the approval of the application if additional information is needed to assess the unpaid minimum wages or overtime compensation owed to any affected employee for the violations of such Act identified in the application through the self-audit; and

(C)

provide such employer an opportunity to amend such application to revise the scope of the practices of such employer that violate a minimum wage or overtime compensation requirement of the Fair Labor Standards Act of 1938 that are identified in the application through self-audit, to update the list of affected employees with respect to the practices at issue in the self-audit, and to update the calculations of unpaid minimum wages or overtime compensation owed to any affected employee as a result of such violations.

(2) Approval

(A) In general

If the conditions under subparagraph (B) are satisfied with respect to an application submitted under subsection (b)(2), the Administrator shall—

(i)

approve the application—

(I)

in the case the application has not been amended under paragraph (1)(C), not later than 30 days after such submission; or

(II)

in the case the application has been amended under paragraph (1)(C), not later than 30 days after the date of submission of such amended application; and

(ii)

supervise the settlement under subsection (d), including the payment of any unpaid minimum wages or overtime compensation under the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.) required through such settlement.

(B) Conditions for approval

An application submitted under subsection (b)(2) shall be approved under subparagraph (A) if—

(i)

within the scope of the violations identified by the employer through the application or an amendment to the application under paragraph (1)(C), the Administrator verifies that the self-audit and calculation of unpaid minimum wages or overtime compensation owed to any affected employee under the Fair Labor Standards Act of 1938 submitted in such application or amendment are accurate; and

(ii)

the employer submitting the application—

(I)

is determined to be acting in good faith regarding violations of the Fair Labor Standards Act of 1938 identified in such application or amendment;

(II)

has not been found by the Administrator or any court of law to have violated a minimum wage or overtime compensation requirement of such Act during the 5 years immediately preceding submission of such application; and

(III)

has not been approved for participation in the program prior to the submission of such application, unless—

(aa)

such participation was for a distinct violation of the Fair Labor Standards Act of 1938 that the practice identified in the self-audit under subsection (b)(2); and

(bb)

such employer has submitted the necessary materials for the Administrator to verify that such employer is not engaging in the practice addressed by the previous participation of the employer in the program.

(d) Settlement

(1) In general

For each employer that submits an application under subsection (b)(2) that is approved under subsection (c)(2), the Administrator shall—

(A)

provide to the employer a description of the scope of the potential release of claims for violations of minimum wage or overtime compensation requirements of the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.) and a summary of any unpaid minimum wages or overtime compensation owed to each affected employee under such Act for such violations; and

(B)

issue a release form to each affected employee of such employer that describes the settlement terms, which shall include a written explanation of—

(i)

the waiver under paragraph (2)(B); and

(ii)

the right of the affected employee receiving the offer for settlement to decline the offer for settlement and preserve any private right of action of the employee to recover any unpaid minimum wages or overtime compensation owed to the employee under the Fair Labor Standards Act of 1938 as a result of such violations.

(2) Acceptance of settlement

(A) In general

An affected employee offered a settlement through a release form under paragraph (1)(B) may accept or decline the offer.

(B) Waiver of private right of action

The acceptance by an affected employee of an offer of settlement under subparagraph (A) shall, upon payment in full of any amounts owed to the employee under the settlement, constitute a waiver by such employee of any right such employee may have under section 16 of the Fair Labor Standards Act of 1938 (29 U.S.C. 216) to a private right of action to recover unpaid minimum wages or overtime compensation, including any liquidated damages, for the violations addressed by the settlement.

(3) Payment of settlement

For each affected employee that accepts a settlement through a release form under paragraph (1)(B), the employer shall—

(A)

pay such employee the full amount of unpaid minimum wages or overtime compensation owed to such employee under the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.) for the violations addressed in the settlement; and

(B)

submit proof of payment of such full amount to the Administrator.

(e) Additional requirements

(1) Denials

In the case of an application submitted by an employer under subsection (b)(2) and not approved under subsection (c)(2), the Administrator may not—

(A)

use information submitted in the application in an investigation against the employer;

(B)

use the fact such employer applied to the program as a basis for any future investigation, except in a case in which the Administrator has reason to believe that the health and safety of an employee is at risk due to an alleged violation related to a requirement enforced by the Secretary involving child labor, agricultural worker protections, or housing or transportation requirements under the H–2A or H–2B visa programs; or

(C)

communicate to any affected employee of such employer in response to receipt of such application to notify such employee of the private right of action of such employee to resolve potential violations of the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.), particularly with respect to the wage practices at issue in the self-audit.

(2) Expansion of scope

The Administrator may not expand the scope of the violations to be investigated or settled through an employer’s participation in the program beyond the violations identified by the employer in the application submitted by the employer under subsection (b)(2) or the amended application submitted by the employer under subsection (c)(1)(C).

(3) No payments required

The Administrator may not require any form of payment by an employer to apply, qualify, or participate in the program.

(4) Exemption from discovery

Any information submitted in an application to the program under subsection (b)(2), or an amendment to such application under subsection (c)(1)(C), may not be subject to discovery in a Federal or State court proceeding without the consent of the employer that submitted the application.

(f) Retaliation

Section 15(a)(3) of the Fair Labor Standards Act of 1938 (29 U.S.C. 215(a)(3)) is amended by inserting before the semicolon the following: , or has accepted or declined to accept an offer for settlement under section 4(d) of the Ensuring Workers Get PAID Act of 2025.