Department of Labor—Wage and Hour Investigations: Employer Rights
By Richard I. Lehr, PLANET General Counsel
Our members have reported an increase in unannounced audits by the U. S, Department of Labor (DOL) Wage and Hour Division. Should this occur at your place of business, it is important to consider the following:
- You have the right to schedule the visit for a time that is least disruptive to your business.
- The Wage and Hour Division investigator may ask for your company’s I-9 records. Maintain those records in a separate file.
- The investigator will ask to review your company’s payroll information for record keeping compliance with the Fair Labor Standards Act (FLSA). The FLSA does not require employers to maintain employee email addresses and telephone numbers. If that information is requested by the investigator, the employer is not required to provide it.
- One of the key issues the investigator will examine in our industry is the proper classification of employees as exempt or nonexempt. The fact that an employee is paid a "salary" does not mean the employee is exempt from minimum wage and overtime requirements. For example, where there is a three-person crew, including a crew leader, paying that crew leader a salary and calling the crew leader a "supervisor" does not alone make that person exempt from minimum wage and overtime. Be sure that your classification of employees as exempt is reviewed by counsel so that if an investigation arises, you can show you have properly applied the exempt status regulations.
- Do not play "dumb hardball." The Wage and Hour investigator ultimately wants to be sure that your company either complies with the FLSA or shows an intent to come into compliance. Playing "dumb hardball" in your behavior toward the investigator may impair your opportunity to obtain a reasonable resolution to the investigation.
- Often the best possible outcome in terms of a financial resolution is at the earliest stage of the process, with the investigator. Ultimately, if not resolved, the matter is sent to the DOL Office of the Solicitor, for litigation consideration. There are a number of strategies employers may consider to whittle down any amount that Wage and Hour Division says is owed. Your counsel will be in the best position to work with you on how to reduce any amount that the DOL claims is owed.
Richard I. Lehr, PLANET General Counsel, can be reached at email@example.com or by calling 205-326-3002.