Attorney General Grewal Demands Changes to Federal Proposal That Would Strip Workers of Right to Sue for Certain Labor Violations

TRENTON – Acting to protect New Jersey workers and preserve the State’s ability to seek justice on their behalf, Attorney General Gurbir S. Grewal today joined a multi-state coalition of Attorneys General in objecting to the federal government’s new Payroll Audit Independent Determination (PAID) program. As the states explain in their letter, the PAID program “appears to be an amnesty program allowing employers who violate labor laws to avoid prosecution and penalties in exchange for simply paying the back wages their employees were already owed.”

In a letter to U.S. Labor Secretary R. Alexander Acosta, Attorney General Grewal and letter signatories expressed “serious concern” that the PAID program may provide an out for employers who unlawfully engage in wage and hour violations. Of particular concern, the letter notes, is that PAID may require workers who receive overdue wages to waive their rights to pursue legal remedies available under state and local labor laws. PAID also releases employers from the obligation to pay wronged workers liquidated damages, interest or penalties, which the states assail as “troubling on all counts.”
“It’s pretty simple: when employers owe back pay, they should pay the back pay owed,” said Attorney General Grewal. “And workers shouldn’t be required to waive their rights in order to get something legally due to them. But, unfortunately, that’s exactly what this federal proposal would require. There is a great deal about this proposal that seems to give unscrupulous employers a soft landing by sidestepping monetary penalties, avoiding prosecution, and offering few deterrents to future misconduct. We in New Jersey are going to hold companies accountable when they cheat their workers out of hard-earned wages.”

Labor Commissioner Robert Asaro-Angelo expressed concern for affected workers.

“As commissioner, one of my priorities is to ensure all employees receive a fair day’s wage for a fair day’s work,” said Asaro-Angelo. “My department is committed to holding employers accountable when they fall short of their obligations to their employees.”

Announced by the U.S. Labor Department in March, the pilot PAID program ostensibly creates an opportunity for employers to resolve worker wage violation claims “expeditiously and without litigation.”

Employers are encouraged to conduct audits and, if they discover overtime or minimum wage violations, to self-report those violations. The employer is then supposed to work “in good faith” with the U.S. Labor Department’s Wage and Hour Division to correct the employer’s wage mistakes and provide back wages owed.

However, the coalition Attorneys General cast significant doubt on the fairness of PAID as currently planned.

There appears to be nothing in the rules to block employers currently under investigation by state attorneys general or labor enforcement authorities from participating in PAID, and there is ambiguity as to whether employers can also try to resolve wage complaints brought under state labor laws.

Given the many questions about PAID and an overall lack of clarity about the program, the Attorneys General assert, New Jersey and other states will forge ahead in prosecuting labor violations “to the fullest extent of our authority, both civilly and criminally,“ regardless of whether employers are participating in PAID.

“No worker should be required to waive wage theft protections in order to obtain only the partial relief your program is offering,” the letter to Secretary Acosta states, “and we intend to pursue every available option to ensure that workers’ rights to fair pay and overtime are protected to the fullest possible extent.”

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