HB 2105 — 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
 1   Providing for employer self-audit program to foster
 2      collaboration with employers to voluntarily remedy unpaid
 3      wages owed to an affected employee or cure a negligent
 4      violation that was the result of an employer inadvertently
 5      violating a labor act.
 6      The General Assembly of the Commonwealth of Pennsylvania
 7   hereby enacts as follows:
 8   Section 1.   Short title.
 9      This act shall be known and may be cited as the Employer
10   Self-audit Act.
11   Section 2.   Definitions.
12      The following words and phrases when used in this act shall
13   have the meanings given to them in this section unless the
14   context clearly indicates otherwise:
15      "Affected employee."     An employee affected by a violation of
16   a labor act that resulted in unpaid wages or a negligent
17   violation.
18      "Employee."    As defined in the labor act under which the
19   individual was considered an affected employee.
20      "Employer."    As defined in the labor act under which a
 1   violation was found as the result of a self-audit.
 2      "Good faith."    With respect to an employer applying for
 3   participation in the self-audit program established under
 4   section 3, that the employer is not, at the time the employer
 5   submits an application for the program:
 6          (1)   Under investigation by the secretary for an alleged
 7      violation of a labor act.
 8          (2)   Subject to a lawsuit related to an alleged violation
 9      of a labor act.
10      "Labor act."    Any of the following:
11          (1)   The act of July 14, 1961 (P.L.637, No.329), known as
12      the Wage Payment and Collection Law.
13          (2)   The act of August 15, 1961 (P.L.987, No.442), known
14      as the Pennsylvania Prevailing Wage Act.
15          (3)   The act of January 17, 1968 (P.L.11, No.5), known as
16      The Minimum Wage Act of 1968.
17          (4)   The act of October 13, 2010 (P.L.506, No.72), known
18      as the Construction Workplace Misclassification Act.
19          (5)   The act of October 24, 2012 (P.L.1209, No.151),
20      known as the Child Labor Act.
21      "Negligent violation."    A violation that is not one of the
22   following:
23          (1)   a willful violation;
24          (2)   a violation which causes bodily injury to a minor or
25      creates a significant risk of bodily injury to a minor; or
26          (3)   a violation related to falsification of records.
27      "Secretary."    The Secretary of Labor and Industry of the
28   Commonwealth, or a duly authorized representative.
29      "Self-audit."    An audit conducted by an employer to resolve
30   inaccuracies by the employer in the computation of wages or

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 1   determining a negligent violation under a labor act.
 2      "Unpaid wage violation."           A violation that affected the
 3   monetary compensation of an affected employee.
 4   Section 3.     Employer self-audit program.
 5      (a)   Establishment.--The secretary shall establish an
 6   employer self-audit program to foster collaboration with
 7   employers to voluntarily remedy unpaid wages owed to an affected
 8   employee or cure a negligent violation that was the result of an
 9   employer inadvertently violating a labor act.
10      (b)   Application requirements.--
11            (1)   The secretary shall:
12                  (i)    Not later than 60 days after the effective date
13            of this paragraph, make available to employers resources
14            for assistance in complying with a labor act, which shall
15            be offered through electronic and printed materials.
16                  (ii)    Not later than 90 days after the effective date
17            of this paragraph, make available resources for
18            assistance in applying for the program.
19            (2)   An employer seeking to participate in the program
20      shall submit an application to the secretary that includes:
21                  (i)    Materials related to and the results of a self-
22            audit, including:
23                         (A)   An identification of any practice of the
24                  employer identified in a self-audit that may have
25                  resulted in an unpaid wage violation or negligent
26                  violation.
27                         (B)   A list of each employee who may be an
28                  affected employee with respect to the violation,
29                  including:
30                               (I)   The period of time the employee would

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 1                    have been affected by the violation.
 2                          (II)    Payroll records related to the employee
 3                    for the period with information on the hours of
 4                    work performed by the employee.
 5                          (III)   Contact information for the employee.
 6             (ii)    For an unpaid wage violation, in addition to
 7        the materials under subparagraph (i), the following shall
 8        be required:
 9                    (A)   A calculation of unpaid wages owed to an
10             affected employee with a description of the
11             methodology of the calculation and supporting
12             evidence.
13                    (B)   An explanation of the scope of potential
14             violations of unpaid wage requirements of the labor
15             act for inclusion in a release of claims under
16             subsection (e).
17             (iii)    An assurance that a practice of the employer
18        that resulted in a violation of unpaid wages or a
19        negligent violation that is identified in the self-audit
20        has been corrected to comply with the labor act under
21        which the violation occurred.
22             (iv)    An assurance that the employer has, prior to
23        submitting the application, reviewed the compliance
24        assistance resources made available under paragraph (1)
25        and program information, terms and requirements.
26             (v)    An assurance that, on the date of submission of
27        the application, the employer:
28                    (A)   Is not involved in any litigation regarding
29             a practice of the employer that is identified in the
30             self-audit.

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 1                       (B)   Has not received any communications from an
 2                employee or a representative of an employee seeking
 3                to litigate or settle claims related to the practice.
 4    (c)   Application review and approval.--
 5          (1)   The secretary shall review each application
 6    submitted by an employer under subsection (b)(2). As part of
 7    the review, the secretary shall:
 8                (i)    As necessary, consult with the employer
 9          regarding:
10                       (A)   The self-audit and supporting materials
11                submitted in the application.
12                       (B)   The process for approval of the application
13                and settlement of unpaid wages owed to an affected
14                employee.
15                (ii)    Inform the employer in a timely manner and
16          prior to a determination on the approval of the
17          application if additional information is needed to assess
18          the unpaid wages owed to an affected employee or the
19          scope of the negligent violation identified in the
20          application through the self-audit.
21                (iii)    Provide the employer an opportunity to amend
22          the application to:
23                       (A)   Revise the scope of the practices of the
24                employer that resulted in an unpaid wage violation or
25                negligent violation that was identified in the
26                application through self-audit.
27                       (B)   Update the list of affected employees with
28                respect to the practices at issue in the self-audit.
29                       (C)   Update the calculations of unpaid wages owed
30                to an affected employee as a result of the

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 1                  violations.
 2            (2)   If the conditions under subsection (d) are satisfied
 3      with respect to an application submitted under subsection (b)
 4      (2), the secretary shall:
 5                  (i)    Approve the application:
 6                         (A)   if the application has not been amended
 7                  under paragraph (1), not later than 30 days after
 8                  such submission; or
 9                         (B)   if the application has been amended under
10                  paragraph (1), not later than 30 days after the date
11                  of submission of such amended application.
12                  (ii)    Supervise the settlement under subsection (e),
13            including the payment of unpaid wages required through
14            the settlement.
15      (d)   Conditions of approval.--An application submitted under
16   subsection (b)(2) shall be approved under subsection (c)(2) if:
17            (1)   Within the scope of the violations identified by the
18      employer through the application or an amendment to the
19      application under subsection (c)(1), the secretary verifies
20      that the self-audit and calculation of unpaid wages owed to
21      an affected employee or scope of negligent violation
22      submitted in the application or amendment is accurate.
23            (2)   The employer submitting the application:
24                  (i)    Is determined to be acting in good faith
25            regarding violations identified in the application or
26            amendment.
27                  (ii)    Has not been found by the secretary or a court
28            of law to have violated an unpaid wage requirement or
29            negligent violation of a labor act for five years
30            immediately preceding submission of the application.

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 1                (iii)    Has not been approved for participation in the
 2          program prior to the submission of the application,
 3          unless:
 4                       (A)   participation was for a distinct violation
 5                of a separate act that is not the current labor act
 6                identified in the self-audit under subsection (b)(2);
 7                and
 8                       (B)   the employer has submitted the necessary
 9                materials for the secretary to verify that the
10                employer is not engaging in the practice addressed by
11                the previous participation of the employer in the
12                program.
13    (e)   Settlement.--
14          (1)   For an employer that submits an application under
15    subsection (b)(2) due to an unpaid wage violation that is
16    approved under subsection (c)(2), the secretary shall:
17                (i)    Provide to the employer a description of the
18          scope of the potential release of claims for violations
19          of unpaid wage requirements and a summary of unpaid wages
20          owed to each affected employee under the labor act for
21          the violations.
22                (ii)    Issue a release form to each affected employee
23          of the employer that describes the settlement terms,
24          which includes a written explanation of:
25                       (A)   The waiver under paragraph (2)(ii).
26                       (B)   The right of the affected employee receiving
27                the offer for settlement to decline the offer for
28                settlement and preserve any private right of action
29                of the employee to recover unpaid wages owed to the
30                employee under the labor act as a result of the

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 1                  violations.
 2            (2)   (i)    An affected employee offered a settlement
 3            through a release form under paragraph (1)(ii) may accept
 4            or decline the offer.
 5                  (ii)   The acceptance by an affected employee of an
 6            offer of settlement under subparagraph (i) shall, upon
 7            payment in full of any amounts owed to the employee under
 8            the settlement, constitute a waiver by the employee of
 9            any right the employee may have to a private right of
10            action to recover unpaid wages, including liquidated
11            damages, for the violations addressed by the settlement.
12            (3)   For an affected employee that accepts a settlement
13      through a release form under paragraph (1)(ii), the employer
14      shall:
15                  (i)    pay the employee the full amount of unpaid wages
16            owed to the employee for the violations addressed in the
17            settlement; and
18                  (ii)   submit proof of payment of the full amount to
19            the secretary.
20      (f)   Release from administrative penalties.--An employer that
21   submits an application under subsection (b)(2) that is approved
22   under subsection (c)(2) shall receive a warning for a first
23   violation and shall not be subject to any administrative
24   penalties under a labor act in which the violation identified in
25   the self-audit occurred.
26      (g)   Additional requirements.--
27            (1)   In the case of an application submitted by an
28      employer under subsection (b)(2) that is not approved under
29      subsection (c)(2), the secretary may not:
30                  (i)    use information submitted in the application in

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 1          an investigation against the employer;
 2                (ii)    use the fact that the employer applied to the
 3          program as a basis for any future investigation, except
 4          if the secretary has reason to believe that the health
 5          and safety of an employee is at risk due to an alleged
 6          violation related to a requirement enforced by the
 7          secretary; or
 8                (iii)   communicate to an affected employee of the
 9          employer in response to receipt of the application to
10          notify the employee of the private right of action of the
11          employee to resolve potential violations, particularly
12          with respect to the wage practices at issue in the self-
13          audit.
14          (2)   The secretary may not expand the scope of the
15      violations to be investigated or settled through an
16      employer's participation in the program beyond the violations
17      identified by the employer in the application submitted by
18      the employer under subsection (b)(2) or the amended
19      application submitted by the employer under subsection (c)(1)
20      (iii).
21          (3)   The secretary may not require any form of payment by
22      an employer to apply, qualify or participate in the program.
23          (4)   Information submitted in an application to the
24      program under subsection (b)(2), or an amendment to the
25      application under subsection (c)(1)(iii), may not be subject
26      to discovery in a Federal or State court proceeding without
27      the consent of the employer that submitted the application.
28   Section 4.   Effective date.
29      This act shall take effect in 60 days.



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