An Act providing for employer self-audit program to foster collaboration with employers to voluntarily remedy unpaid wages owed to an affected employee or cure a negligent violation that was the result of an employer inadvertently violating a labor act.

PRINTER'S NO. 2723
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2105
Session of
2025
INTRODUCED BY GROVE, PICKETT AND NEILSON, DECEMBER 17, 2025
REFERRED TO COMMITTEE ON LABOR AND INDUSTRY, DECEMBER 17, 2025
AN ACT
Providing for employer self-audit program to foster
collaboration with employers to voluntarily remedy unpaid
wages owed to an affected employee or cure a negligent
violation that was the result of an employer inadvertently
violating a labor act.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Employer
Self-audit Act.
Section 2. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Affected employee." An employee affected by a violation of
a labor act that resulted in unpaid wages or a negligent
violation.
"Employee." As defined in the labor act under which the
individual was considered an affected employee.
"Employer." As defined in the labor act under which a
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violation was found as the result of a self-audit.
"Good faith." With respect to an employer applying for
participation in the self-audit program established under
section 3, that the employer is not, at the time the employer
submits an application for the program:
(1) Under investigation by the secretary for an alleged
violation of a labor act.
(2) Subject to a lawsuit related to an alleged violation
of a labor act.
"Labor act." Any of the following:
(1) The act of July 14, 1961 (P.L.637, No.329), known as
the Wage Payment and Collection Law.
(2) The act of August 15, 1961 (P.L.987, No.442), known
as the Pennsylvania Prevailing Wage Act.
(3) The act of January 17, 1968 (P.L.11, No.5), known as
The Minimum Wage Act of 1968.
(4) The act of October 13, 2010 (P.L.506, No.72), known
as the Construction Workplace Misclassification Act.
(5) The act of October 24, 2012 (P.L.1209, No.151),
known as the Child Labor Act.
"Negligent violation." A violation that is not one of the
following:
(1) a willful violation;
(2) a violation which causes bodily injury to a minor or
creates a significant risk of bodily injury to a minor; or
(3) a violation related to falsification of records.
"Secretary." The Secretary of Labor and Industry of the
Commonwealth, or a duly authorized representative.
"Self-audit." An audit conducted by an employer to resolve
inaccuracies by the employer in the computation of wages or
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determining a negligent violation under a labor act.
"Unpaid wage violation." A violation that affected the
monetary compensation of an affected employee.
Section 3. Employer self-audit program.
(a) Establishment.--The secretary shall establish an
employer self-audit program to foster collaboration with
employers to voluntarily remedy unpaid wages owed to an affected
employee or cure a negligent violation that was the result of an
employer inadvertently violating a labor act.
(b) Application requirements.--
(1) The secretary shall:
(i) Not later than 60 days after the effective date
of this paragraph, make available to employers resources
for assistance in complying with a labor act, which shall
be offered through electronic and printed materials.
(ii) Not later than 90 days after the effective date
of this paragraph, make available resources for
assistance in applying for the program.
(2) An employer seeking to participate in the program
shall submit an application to the secretary that includes:
(i) Materials related to and the results of a self-
audit, including:
(A) An identification of any practice of the
employer identified in a self-audit that may have
resulted in an unpaid wage violation or negligent
violation.
(B) A list of each employee who may be an
affected employee with respect to the violation,
including:
(I) The period of time the employee would
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have been affected by the violation.
(II) Payroll records related to the employee
for the period with information on the hours of
work performed by the employee.
(III) Contact information for the employee.
(ii) For an unpaid wage violation, in addition to
the materials under subparagraph (i), the following shall
be required:
(A) A calculation of unpaid wages owed to an
affected employee with a description of the
methodology of the calculation and supporting
evidence.
(B) An explanation of the scope of potential
violations of unpaid wage requirements of the labor
act for inclusion in a release of claims under
subsection (e).
(iii) An assurance that a practice of the employer
that resulted in a violation of unpaid wages or a
negligent violation that is identified in the self-audit
has been corrected to comply with the labor act under
which the violation occurred.
(iv) An assurance that the employer has, prior to
submitting the application, reviewed the compliance
assistance resources made available under paragraph (1)
and program information, terms and requirements.
(v) An assurance that, on the date of submission of
the application, the employer:
(A) Is not involved in any litigation regarding
a practice of the employer that is identified in the
self-audit.
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(B) Has not received any communications from an
employee or a representative of an employee seeking
to litigate or settle claims related to the practice.
(c) Application review and approval.--
(1) The secretary shall review each application
submitted by an employer under subsection (b)(2). As part of
the review, the secretary shall:
(i) As necessary, consult with the employer
regarding:
(A) The self-audit and supporting materials
submitted in the application.
(B) The process for approval of the application
and settlement of unpaid wages owed to an affected
employee.
(ii) Inform the 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 wages owed to an affected employee or the
scope of the negligent violation identified in the
application through the self-audit.
(iii) Provide the employer an opportunity to amend
the application to:
(A) Revise the scope of the practices of the
employer that resulted in an unpaid wage violation or
negligent violation that was identified in the
application through self-audit.
(B) Update the list of affected employees with
respect to the practices at issue in the self-audit.
(C) Update the calculations of unpaid wages owed
to an affected employee as a result of the
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violations.
(2) If the conditions under subsection (d) are satisfied
with respect to an application submitted under subsection (b)
(2), the secretary shall:
(i) Approve the application:
(A) if the application has not been amended
under paragraph (1), not later than 30 days after
such submission; or
(B) if the application has been amended under
paragraph (1), not later than 30 days after the date
of submission of such amended application.
(ii) Supervise the settlement under subsection (e),
including the payment of unpaid wages required through
the settlement.
(d) Conditions of approval.--An application submitted under
subsection (b)(2) shall be approved under subsection (c)(2) if:
(1) Within the scope of the violations identified by the
employer through the application or an amendment to the
application under subsection (c)(1), the secretary verifies
that the self-audit and calculation of unpaid wages owed to
an affected employee or scope of negligent violation
submitted in the application or amendment is accurate.
(2) The employer submitting the application:
(i) Is determined to be acting in good faith
regarding violations identified in the application or
amendment.
(ii) Has not been found by the secretary or a court
of law to have violated an unpaid wage requirement or
negligent violation of a labor act for five years
immediately preceding submission of the application.
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(iii) Has not been approved for participation in the
program prior to the submission of the application,
unless:
(A) participation was for a distinct violation
of a separate act that is not the current labor act
identified in the self-audit under subsection (b)(2);
and
(B) the employer has submitted the necessary
materials for the secretary to verify that the
employer is not engaging in the practice addressed by
the previous participation of the employer in the
program.
(e) Settlement.--
(1) For an employer that submits an application under
subsection (b)(2) due to an unpaid wage violation that is
approved under subsection (c)(2), the secretary shall:
(i) Provide to the employer a description of the
scope of the potential release of claims for violations
of unpaid wage requirements and a summary of unpaid wages
owed to each affected employee under the labor act for
the violations.
(ii) Issue a release form to each affected employee
of the employer that describes the settlement terms,
which includes a written explanation of:
(A) The waiver under paragraph (2)(ii).
(B) 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 unpaid wages owed to the
employee under the labor act as a result of the
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violations.
(2) (i) An affected employee offered a settlement
through a release form under paragraph (1)(ii) may accept
or decline the offer.
(ii) The acceptance by an affected employee of an
offer of settlement under subparagraph (i) shall, upon
payment in full of any amounts owed to the employee under
the settlement, constitute a waiver by the employee of
any right the employee may have to a private right of
action to recover unpaid wages, including liquidated
damages, for the violations addressed by the settlement.
(3) For an affected employee that accepts a settlement
through a release form under paragraph (1)(ii), the employer
shall:
(i) pay the employee the full amount of unpaid wages
owed to the employee for the violations addressed in the
settlement; and
(ii) submit proof of payment of the full amount to
the secretary.
(f) Release from administrative penalties.--An employer that
submits an application under subsection (b)(2) that is approved
under subsection (c)(2) shall receive a warning for a first
violation and shall not be subject to any administrative
penalties under a labor act in which the violation identified in
the self-audit occurred.
(g) Additional requirements.--
(1) In the case of an application submitted by an
employer under subsection (b)(2) that is not approved under
subsection (c)(2), the secretary may not:
(i) use information submitted in the application in
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an investigation against the employer;
(ii) use the fact that the employer applied to the
program as a basis for any future investigation, except
if the secretary 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; or
(iii) communicate to an affected employee of the
employer in response to receipt of the application to
notify the employee of the private right of action of the
employee to resolve potential violations, particularly
with respect to the wage practices at issue in the self-
audit.
(2) The secretary 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)
(iii).
(3) The secretary may not require any form of payment by
an employer to apply, qualify or participate in the program.
(4) Information submitted in an application to the
program under subsection (b)(2), or an amendment to the
application under subsection (c)(1)(iii), may not be subject
to discovery in a Federal or State court proceeding without
the consent of the employer that submitted the application.
Section 4. Effective date.
This act shall take effect in 60 days.
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