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Dealing with the DOL at Your Door, Part I

The United States Department of Labor (“DOL”) conducts workplace inspections for potential violations of wage and hour laws. Employers often place frantic telephone calls to their lawyer when an investigator from the Wage and Hour Division (“WHD”) knocks on their door for good reason: a DOL investigation should be  taken seriously. Any last-minute attempt to pass muster typically falls short, and leaves an employer in violation of wage and hour laws which may subject them to hefty fines. A violation can result in wage restitution, interest, and liquidated damages.  Preparedness is key, and an employer’s institution of the following five guidelines can drastically improve their position should the DOL initiate an investigation.

(1) Determine whether each employee is exempt or non-exempt from overtime and minimum wage requirements. Contrary to popular belief, an employer’s payment of a salary to an employee does not determine whether that employee is exempt or non-exempt from overtime or minimum wage.

(2) Check time-keeping systems to ensure that non-exempt employees are paid for all work performed.. Ensure that time-keeping systems are easy-to-use and access. Emphasize the importance of record-keeping and explain overtime policies to non-exempt employees.

(3) Confirm that payroll records, written job descriptions, and written policies are accurate and compliant with state and federal laws. Pay special attention to who is considered an employee and who is considered an independent contractor.

(4) Institute a formal program for reporting and addressing employee wage concerns. Employees should feel comfortable taking their issues to a supervisor without fear of retaliation or punishment.

(5) Create an  investigation response team that can spring into action at a moment’s notice. This team should include senior management, supervisors, and legal counsel experienced in handling DOL issues.

Once the above steps are instituted, employers should rest a little easier about possible DOL investigations. Nevertheless, when an investigator is at the door, anxiety will surely set in for employers. How is the investigation run? What should you have ready to produce? Who should be ready to speak? For more information on a DOL investigation, check back on Wednesday.

This article is intended as a summary of  federal and state law and does not constitute legal advice.

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