New York, NY - August 6, 2018 - New York Attorney General Barbara D. Underwood filed a lawsuit today against the U.S. Department of Labor for failing to respond as required by law to records requests concerning a new program that allows employers who violate labor laws to avoid prosecution and penalties. Today’s suit asks the court to compel the Department of Labor to respond to the Attorney General’s request for information sent to the agency in April 2018 related to the Payroll Audit Independent Determination (PAID) Program.
“The PAID Program is nothing more than a get-out-of-jail-free card for predatory employers,” said Attorney General Underwood. “New York workers have a right to know why the Secretary of Labor decided to let employers off the hook when they don’t pay their workers. The Labor Department failed to provide required information — so we’re taking them to court to get the information to which we are legally entitled.”
The Attorney General’s information request, submitted to the U.S. Department of Labor on April 11, 2018 pursuant to the Freedom of Information Act (FOIA), sought information relating to the Attorney General’s concern that the PAID Program would erode workers’ rights by allowing employers to evade prosecution and penalties for wage theft under state labor laws that are more protective than federal law. The request additionally sought agency records concerning the development, implementation, consideration, and evaluation of the PAID Program, including communications with employers. To date, the Labor Department has failed to provide any agency records in response to the FOIA request.
The complaint, filed in the U.S. District Court for the Southern District of New York today, alleges that the Labor Department has failed to provide required information in response to the Attorney General’s request within the statutorily prescribed time limit. Under FOIA, a federal agency must respond within 20 business days after receipt of a request with a determination that must at least inform the requester of the scope of the documents that the agency will produce. As alleged in the complaint, the Labor Department has failed to provide the Attorney General with any such determination, more than 100 days since the date of the request.
In a letter sent to Labor Secretary Alexander Acosta and signed by ten other Attorneys General, the Attorney General’s office voiced concerns about the PAID Program when it was first launched in April. The letter to Secretary Acosta raised multiple concerns about the PAID Program, including that it releases employers from the obligation to pay penalties, liquidated damages, and interest on overdue wages.
Additionally, the PAID Program appears not to require employers to pay employees at any applicable higher state or local minimum wage or overtime wage rates, or to pay wages owed during longer state statute of limitations periods. For a New York City fast food worker, for example, that could mean the difference between recovering wages at the federal minimum wage of $7.25 an hour rather than the applicable state minimum of $13.50. Finally, the PAID Program encourages employers to have employees sign separate releases to settle claims under state law – yet the Department of Labor refuses to oversee such state-law settlements to ensure their fairness.
This matter is being handled for Attorney General Underwood by Assistant Attorney General Kevin Lynch, under the supervision of Labor Bureau Civil Enforcement Section Chief Mayur Saxena. The Labor Bureau is led by Bureau Chief ReNika Moore and Deputy Bureau Chief Julie Ulmet. The Executive Deputy Attorney General for the Social Justice Division is Matthew Colangelo.