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Common Time and Pay Scenarios

Deductions for Uniforms, Tools & Other Items

CLJ Corp., a company that operates 75 upscale convenience stores in the Great Plains states, requires employees to buy uniforms as a condition of employment. It deducts the amount from employee paychecks. It also deducts payments of $5 from each paycheck for mandatory weekly dry cleaning and pressing. CLJ applies these deductions to the pay of both non-exempt clerks and exempt store managers. A store manager who came from another chain recently complained to the company’s compensation manager about this practice, saying such deductions from the pay of exempt employees is not permissible. The payroll manager told him he was wrong; the company could make deductions from anyone’s paycheck for the uniforms and dry cleaning, as long as the employee’s pay did not fall below the minimum wage.

The Law: The payroll manager is half right. In general, you can require employees to pay for their uniforms, cleaning, or any tools or safety items, such as special shoes, as long as payroll deductions don’t cut into the minimum wage or an employee’s overtime premium. If deducting the entire cost all at once would reduce pay below the minimum wage, you can prorate the amount over several paychecks.

You’d have to pick up the full cost of the uniform, dry cleaning or tools for employees receiving just the minimum wage. And if you require minimum-wage employees to purchase clothing or a tool before coming in to work for the first time, you have until the next regular payday to reimburse the employee.

What’s a uniform? If you have a lot of rules, such as “buy from supplier X,” “get this style and cut,” “have our logo sewn on,” etc., then it’s most likely a uniform. Requesting an employee to wear khaki pants and a white golf shirt usually doesn’t qualify as a uniform.

What the Employer Should Do: First, CLJ must stop deducting payment for things considered expenses, for the convenience of the employer, from the salary of anyone it considers exempt.

Second, if CLJ makes deductions from the pay of non-exempt employees, it needs to be sure that potential employees understand it will charge them for such things as uniforms and cleaning, and that they agree to the practice. Most important, CLJ never should allow a uniform deduction to cut into the minimum wage or mandatory overtime compensation of a non-exempt worker.

Automatic Deductions for Meals & Breaks

Konner Solutions is a startup company with six employees. It has a sophisticated new time clock to record the comings and goings of its employees. Since everyone works from 8:00 to 5:00, the office manager, Janine, decides to program the system to deduct 30 minutes for lunch each day automatically. She also programs it to deduct two 15-minute breaks. She tells the employees to only punch in when they arrive and to punch out when they leave for the day. Is this acceptable?

The Law: Janine is unwittingly putting the company at risk of FLSA violations. Automatic deductions for lunch can result in violations because they do not necessarily report the reality of the hours worked by non-exempt employees. It’s important to keep accurate time records. If someone takes lunch from 12:10 to 12:30, records need to show that, not that he or she was off duty from 12:00 to 12:30 day in and day out.

What if one employee actually took 15 minutes for lunch or skipped it altogether? What if an employee took an hour? According to experienced employment attorneys, automatic deductions for lunch are a big red flag to DOL investigators (as are records showing that employees worked exactly eight hours from 8:00 to 5:00, with an hour for lunch, every day of the week). Real-world records show variation in daily schedules. Anything else suggests you might be hiding actual hours worked — maybe to avoid paying overtime.

What the Employer Should Do: Janine needs to tell employees to clock in each morning, out at lunch, back in after lunch, and out when they leave for the day. If she does not want them working through lunch, she should make taking a real lunch break mandatory and enforce it through discipline. In addition, she can tell employees exactly what time to eat lunch or take breaks. However, if an employee strays from the schedule, he or she still must record the actual hours of work and get paid for them.

On-Call Time

Smiff Maintenance Pros serves a variety of institutional customers by maintaining boilers, electrical and plumbing systems, and air-handling and heating systems. Its technicians are all hourly workers. Smiff requires employees to be on call for at least two 12-hour periods a week. (Shifts may be traded.) These generally are the hours between 6:00 p.m. and 6:00 a.m., when company offices are closed and the bulk of the workforce is off duty. Smiff tells its customers to call any time and a maintenance person will be on his or her way to help within 30 minutes. Smiff pays employees for the time spent at the customer’s worksite, rounded up to the next hour. The company also pays for travel time to client sites, as the law requires. Smiff issues pagers to employees, who are required to have them nearby while on call. Surprisingly, the company doesn’t get many middle-of-the-night calls. The company did an analysis and discovered that workers on call average 2.4 off-hour service calls a month. Still, employees grumble and some believe they should get paid for on-call time.

The Law: The Code of Federal Regulations states the following on the subject of on-call time: “An employee who is required to remain on call on the employer’s premises or so close to the location that he cannot use the time effectively for his own purposes is working while ‘on call.’ An employee who is not required to remain on the employer’s premises but is merely required to leave word at his home or with company executives where he may be reached is not working while on call.”

What the Employer Should Do: Smiff Maintenance appears to be well within the bounds of the law by not paying for on-call time. Its employees aren’t called in that often, for one thing, and the employer is generous in providing pagers and paying for travel time. Moreover, employees are not bound to the house and can do whatever they want — sleep, watch movies, go out to eat — while on call. Not only is there some flexibility in scheduling shifts, but the schedule isn’t burdensome. Clearly, they are “waiting to be engaged.”

If you decide you must pay for on-call time, you can pay a lower rate. Say you require highly paid skilled workers to stay home and be on call. You could, for example, pay them the minimum wage for waiting time, and then their regular rate for time actually spent working.

Unauthorized Overtime

Falcon Thames Resources Inc. is a distributor that buys from manufacturers and sells to retailers in four New England states. Falcon has one non-exempt warehouse employee who consistently works six to eight overtime hours each week. Management tells employees once a year or so they need the permission of supervisors to work overtime. A Falcon manager even put the policy in writing. Beyond prohibiting unauthorized overtime, it said any such overtime would go uncompensated. The new policy didn’t stop the employee who repeatedly worked overtime. So his supervisor didn’t stop him from working an extra nine hours one week, then six hours the following week. On payday, the manager handed the employee a paycheck that covered just 80 hours. “But I worked 95,” said the employee. “Sorry,” said the manager, “but our policy is not to pay for unauthorized overtime. You were alerted over two weeks ago.”

The Law: The employer does not have a leg to stand on in this case. According to the Code of Federal Regulations, “If the employer knows or has reason to believe that the work is being performed, he must count the time as hours worked.” The DOL elaborates: An announcement by the employer that no overtime work will be permitted, or that overtime work will not be paid for unless authorized in advance, also will not impair the employee’s right to compensation for compensable overtime hours that are worked. In other words, an employee is entitled to overtime compensation even if you have written policies prohibiting it.

What the Employer Should Do: Falcon needs to pay the employee for the overtime worked, then have a talk with the manager involved. He’s known for some time the employee was working overtime without permission — why didn’t he stop it? As the Code of Federal Regulations says, “[I]t is the duty of the management to exercise its control and see that the work is not performed if it does not want it to be performed. It cannot sit back and accept the benefits without compensating for them.”

Breaks Under the FLSA

Creamy Z makes snacks and processes dairy products. It has more than 500 employees and sends its products into every state. With the large number of employees on the payroll, Creamy Z is bound to have several smokers on staff. In fact, the company seems to have an above-average number of smokers, and they love to challenge anyone who objects to their habit. Their feisty stance has turned into a problem for management: Smokers take three or four breaks each day, lasting from 10 to 15 minutes each. The manager in charge of operations is not against smoking, but she has a problem with so many employees taking what sometimes amounts to a full hour a day on company time to satisfy their cravings. She went to the HR director and said, “This is getting out of hand — I want to have them punch in and out and deduct the smoking time from their hours worked each day.”

The Law: First, the FLSA does not require breaks. (State or local laws sometimes do, however, and child labor laws regulate breaks for workers younger than 18 years of age.) The Code of Federal Regulations is quite clear that breaks of anywhere from five to 20 minutes count as “compensable” work time. In other words, you can’t dock an employee’s pay for short breaks.

What the Employer Should Do: Creamy Z should forget about deducting time for breaks that last less than 20 minutes. It is illegal. Instead, the company should draft an official policy on breaks. Two breaks of15 minutes each is customary, but again, federal law has nothing to say on the subject. Much depends on the nature of the work, whether employees are “chained” to an assembly line or telephone, etc. Part of the policy can say something like, “Any break that lasts longer than 20 minutes will be considered off-duty time for which you will not be compensated.” The company then can enforce the policy — through disciplinary measures, if necessary. Because of state laws protecting smokers from workplace discrimination, your policy should apply to all personal breaks and should not single out smokers.

“Off the Clock” Work

Jonesaro Landscaping employs 18 people and does nearly $750,000 in business each year, mostly in the summer and fall. Jonesaro, the owner, has one office assistant. The other employees are mostly immigrant laborers who work under a crew boss. Jonesaro is always scrambling to meet payroll. Jonesaro’s assistant often takes work home at night — sending out estimates and bills or calling people who owe money. Jonesaro is aware that she performs work he doesn’t pay her for. He’s told her many times, “No overtime. But I expect you to get your work done.” Jonesaro, as owner, sets the tone for the company. In the busy season, there aren’t enough hours in the day. His main supervisor, who gets a bonus based on profits, tells workers, “You want to keep your jobs? Put down eight hours for today.”

The Law: It’ll come as no surprise that Jonesaro Landscaping is in violation of the law. The FLSA requires employers to pay at least the minimum wage for all hours worked, with time and a half for any hours worked over 40 in a workweek. DOL investigators would waste no time enforcing the law here, which means back pay, penalties and interest. And Jonesaro’s employees could bring civil suits to collect back pay and damages.

Bottom line, employers must pay non-exempt employees for the time they put in on the job, whether the work is done in the office, in the field, in a factory, or in the employee’s home. If you “suffer or permit” work to be done, you must pay for it.

What the Employer Should Do: Jonesaro should begin paying employees for the hours they put in on the job, and if the business can’t afford to pay overtime, employees should be prohibited from working more than 40 hours a week.

Off-Duty Time and Meals

Ellishon Electrical Supplies is a young company with about 10 employees. Ellishon’s culture is defined by its workaholic boss, Carter. He has yet to take a vacation, and he likes to eat his lunch while poring over financial statements. Only Carter and one other employee, Mamoud, are exempt from the overtime provisions of the FLSA. The others take phone orders, process orders taken over the Web, or work on marketing projects. Carter gets mad when people leave the premises for lunch breaks. Officially, employees get one hour, but people rarely take that much time. And Mamoud actively encourages people to take lunch at their desks so they can be ready to answer calls. Some people read magazines or do crosswords between calls. One new employee learned the unwritten “eat at your desk” rule but was counting it as work time when he totaled up his hours. Carter questioned him about it and the employee said, “If you want me there to take calls, I’m working for you.” Carter said, “Not if you’re eating and surfing the Web or reading a book. Some days you don’t get any calls.”

The Law: Ellishon Electrical is violating the FLSA. The Code of Federal Regulations is clear and to the point: “Periods during which an employee is completely relieved from duty and which are long enough to enable him to use the time effectively for his own purposes are not hours worked.”

It goes on to say that bona fide meal periods (ordinarily at least 30 minutes) are those in which employees are completely relieved of their duties. If employees are required to eat at their desks in case the phone rings or if they must handle some other work responsibility, however sporadic, they are working.

What the Employer Should Do: Carter must start paying employees if he requires them — explicitly or implicitly — to stay at their desks for lunch. If employees choose to stay at their desks for lunch, they must be completely relieved of all work responsibility for that time. Otherwise it is on-duty time that must be paid.

Carter probably should cut the mealtime to one-half hour and stagger lunch breaks so there is enough phone coverage. Then he should let people know they are completely relieved of all responsibility during their lunch breaks. If it’s really busy, he can require people to stay at their desks to eat (unless state or local law mandates a completely free lunch break), but then he must pay his workers for their time.

Parties, Volunteer Events and Other Company-Sponsored Activities

Johnson Television Properties is a family-owned, small-market TV station with about 30 employees. Mary, part owner and the station’s office manager/HR person, wanted to regain the “family atmosphere” that in her view had been eroding for the past few years as things became more businesslike. So she sent out an email announcing two events: a company party, and an emergency blood drive that needed support volunteers. The company party was to be held on a Saturday night. And, she added in the email, “Management expects everyone to show up.” When people asked whether that meant they had to, she said, “Let’s just say it wouldn’t hurt your career.” The blood drive was taking place on a weekday. “We expect a really nice turnout of volunteers,” the email said. “Let’s show people our community spirit!” Again, she let people know she expected them to volunteer. Exempt employees could go for a few hours any time that day, and non-exempt employees were told to go before or after their shifts. One employee said to another, “Am I really a volunteer if I have to do it?”

The Law: If an employer directs non-exempt employees to show up at events such as parties or other nonwork-related events or activities, then it counts as work time. This is true even if, as in this case, the directive is implied rather than stated explicitly.

The Code of Federal Regulations addresses employee volunteerism directly. You need not pay employees if volunteer events are truly optional, if you do not coerce people to volunteer either directly or indirectly, don’t “control” them during the event, and the event occurs outside of normal working hours. Also, an employee must do something different from his or her regular job to qualify as an unpaid volunteer.

What the Employer Should Do: Mary should back up and reconsider her actions. If she wants everyone to attend a party, the company must pay non-exempt employees for their attendance. If she does not want to incur overtime costs for an after-hours party, she should hold it during the workday. Or she can make it genuinely optional and not worry about paying people to attend. The same is true with the volunteer event: She can make participation entirely (and truly) voluntary, or she can pay non-exempt employees to participate.

Training Time

Hamilton Excellence is a consulting company with about 50 exempt and 30 nonexempt employees. Hamilton’s CEO emphasizes increasing the skills and knowledge of all the company’s employees. He sends employees out for training frequently, and he encourages them to attend seminars on a voluntary basis. The CEO sent out a special memo regarding a seminar called “MagnaThinking” about increasing perception and creativity. “I’ve taken the training, and it’s fantastic,” the CEO said in the memo. “It will help you on the job, so I want everyone to take this training if at all possible. The company will pay for it.” The training took place on a Saturday, and more than half the company attended. When non-exempt employees filled out their time sheets at the end of the next week, many had included eight hours for the training on Saturday. The payroll manager went to the CEO. “Is this what you had in mind, boss?” she asked. “Of course not. Isn’t it enough that we paid for the seminar?”

The Law: You need not pay employees for training time only when all four of these conditions are met:

It occurs outside normal work hours.
It is voluntary.
It is not job-related.
Employees do not do any productive work during the training session.

And, the Code of Federal Regulations adds, “It is not voluntary, in fact, if the employee is given to understand or led to believe that his present working conditions or the continuance of his employment would be adversely affected by nonattendance.”

What the Employer Should Do: Hamilton’s CEO probably should go ahead and pay his non-exempt employees for the time spent at the seminar. There’s a serious question as to whether the event was truly voluntary, given the language in the memo.

Overnight Travel

Biltman Manufacturing makes and markets office supplies. Biltman managers decided that the company needed to exhibit in more trade shows to support its marketing efforts. As a result, a crew of seven employees was sent to a show in Las Vegas. Four were exempt, and the other three were non-exempt. Two of the non-exempt employees were flying out on a Saturday during the day to help set up the company’s booth in the show. The other hourly employee was leaving Sunday night. He asked the office manager, “Do I get paid for travel time?” The manager stopped to think, then said he had no idea and would have to get back to him. The employee continued, “And what about the cocktail party for our distributors in the evening. That’s work, right?” Again, the office manager drew a blank.

The Law: According to the DOL, “Travel away from home is clearly work time when it cuts across the employee’s workday. The time is not only hours worked on regular working days during normal working hours but also during corresponding hours on nonworking days.”

In addition, the DOL specifies that travel that does not cut across the regular workday is not compensable. As for after-hours events, work is work. If employees have to be at a cocktail party, then it’s compensable time. If it’s strictly optional and employees would have no work responsibilities if they went, then it is not work time. Similarly, time spent working while en route (e.g., completing paperwork on a flight) is compensable.

What the Employer Should Do: Biltman Manufacturing has to pay the two non-exempt employees for their travel time Saturday during regular work hours, even though it’s not a regular workday. The company does not have to pay the employee traveling to the show on Sunday night because his flight is after regular business hours.

Further, the company needs to pay employees for all work time, including overtime, if necessary. This includes time spent setting up the company’s booth and preparing for the trade show — no matter what time of day or day of the week. Just like any workday, however, it does not need to pay for bona fide lunch breaks or time after the normal workday, so long as they are free to do as they please. Nor would it need to pay the two employees who went early to set up for their time if, for example, they did not work on Sunday but went sightseeing instead.

Holiday/Vacation/Sick Pay and Overtime

Falcona Pharmacies is a small chain of pharmacies operating primarily in the Pacific Northwest. Falcona offers benefits that include both holiday pay and a PTO plan to cover vacations, personal time and sick leave. Falcona’s HR person, James, was hit twice in the same week by employee complaints about the company’s pay practices. In the first case, an employee got holiday pay for the Fourth of July. She took the day off but worked four 11-hour days in that workweek. She submitted 52 hours on her time sheet and expected 12 hours at time and a half. But she was paid for 48 hours at straight time, and only four at overtime. In the second case, an employee worked eight hours on the Fourth, and four other eight-hour days in the week. He added in eight hours of holiday pay and expected to be paid for 48 hours with eight of those hours at time and a half. “You don’t understand,” James told each worker. “Holiday pay doesn’t represent time worked. You don’t consider it when calculating overtime.”

The Law: James is right. According to the Code of Federal Regulations, pay for “certain idle hours” — which includes sick, holiday and vacation time — is not considered compensation for hours of employment. As a result, you don’t need to take them into consideration when assessing overtime pay. Say an employee is due a week’s paid vacation based on his regular rate of $10 an hour. The date for the vacation comes up, and he decides he needs money and asks whether he can work instead. His boss says yes, and he ends up working 48 hours. So, for that week he receives $400 vacation pay, and $520 for the work (including overtime). Total: $920 before taxes. The point is, the vacation pay has no effect on the “regular rate” of pay or overtime. The same would have been true for sick pay, holiday pay, or any other kind of paid time off.

What the Employer Should Do: Falcona is doing nothing wrong. James should educate the workforce about the impact of paid time off on overtime to avoid future complaints.

Nonexempt “Salaries”

Wayside Weathervanes is a small mail-order company with three employees. Wayside lives hand to mouth, depending on the flow of orders to meet overhead. Cash is tight. Nonetheless, Wayside’s owner, Fran, decided the time was right to add an order taker/shipping person. Once she decided on the person, she offered him a job with the following caveat: “I was going to offer you $8 an hour. But I will pay you $9 on a fixed-salary basis if you work overtime when we need you to. In other words, you’ll get $360 a week before taxes whether you work 40 hours or 46 or whatever. OK?” The new employee agreed, until his wife told him what the owner was doing was against the law. When he mentioned that to Fran, she said, “No — you’re paid a salary. There is no overtime. Besides, we had a deal.”

The Law: Fran’s salary scheme is common, especially among smaller or newer companies that don’t know any better. Regardless of whether you pay a nonexempt employee a salary, the employee must be paid at least the minimum wage for all hours of work, and overtime based on the “regular rate” of pay. For example, the employee’s regular rate of pay in this case is $9 an hour for the first 40 hours. He must be paid $13.50 (1.5 × $9) for any hours worked over 40 in a workweek.

Even if you call it salary, it is still in most cases an hourly wage. To find that hourly wage, divide the salary by the hours you expect an employee to work (but no more than 40). That’s the regular rate you then use to compute overtime. And what if the employee works only 32 hours in a week? Without a formal agreement, you can pay him or her only for the hours worked. In this case, $288 (32 × $9).

What the Employer Should Do: Fran first must recognize that an “order taker/shipping person” is almost certainly not an exempt employee. That makes him nonexempt and subject to federal minimum wage/overtime regulations of the FLSA. As a result, she must keep accurate records of his hours worked and pay overtime for any hours worked over 40 in one workweek. Because there are no real cost savings to the employer, this kind of pay arrangement is not recommended for nonexempt employees. Fran should consider converting the employee from salaried to hourly, or implement a fluctuating-rate pay plan.

Wage and Hour Lawsuits on the Rise – How to Avoid the Top FLSA Oversights

In another record-breaking year, 8,126 federal wage and hour lawsuits were filed in 2013-2014 -- a five percent jump from the previous year. Further, this was the seventh year of increases for FLSA cases, with an overall spike of 438 percent since 2000.

The impact of these cases is significant. According to the Wage and Hour Division of the DOL, nearly $250 million back wages were collected in fiscal year 2013, affecting 269,250 employees.

While the numbers are staggering, what’s even more alarming is the fact that the DOL estimates that as many as 70 percent of employers are not in full compliance with the FLSA.

Could your business be a target? The top FLSA violations that get employers in trouble are:

Misclassifying a nonexempt employee (often referred to as hourly employees) as exempt
Not paying overtime to nonexempt employees for all hours worked, including unauthorized overtime
Making improper salary deductions from exempt and nonexempt employees

Between the DOL promising to step up investigations and cracking down on wage and hour violations – and more employees likely to sue for pay issues in a tough economy -- the message is clear: Make a mistake classifying employees or paying them properly and the costs could be tremendous.

You can help prevent a DOL investigation or a private lawsuit by:

Training managers and supervisors on the latest FLSA requirements
Paying every employee at least the minimum wage
Paying the overtime rate when employees work more than 40 hours in a workweek
Requiring clear authorization before employees are permitted to work overtime
Correctly classifying workers as exempt or nonexempt
Maintaining updated time-keeping records on employees (an automated time-keeping process is recommended to reduce human error)
Displaying all required federal and state posters

Employee Complaints and DOL Investigation

When it comes to time and pay issues under the FLSA, it only takes a single employee complaint to start a DOL investigation. Without warning, you could find a DOL investigator at your company’s door, demanding information, documents, an inspection of your premises and/or interviews with your employees. If violations are discovered during the investigation, your company could then face substantial penalties and even criminal action.

Obviously, the best way to prevent this is to follow all the rules of the FLSA, including minimum wage, overtime pay, recordkeeping and child labor standards. You should also know your obligations and options should you receive a surprise visit by the DOL.

What starts an investigation?

Again, an investigation is typically initiated through an employee complaint made against you. The DOL investigator assigned to investigate normally will not discuss with you the name of the employee (or ex-employee) who filed the complaint, the nature of that complaint, or whether the investigation was even initiated by a complaint, because the DOL is entitled to conduct random investigations.

Although the DOL can target anyone for a random investigation, certain categories of businesses tend to be investigated more often. Common targets include low-wage industries, industries with a high rate of wage violations, industries that typically employ vulnerable workers, and industries experiencing rapid changes in growth or reduction. Sometimes the DOL targets certain geographic areas without considering the kind of business or industry.

General investigation procedures

There are typically five parts to a DOL investigation:

An initial conference to define the scope of the investigation

An examination of records to determine which laws or exemptions apply (such as documents showing the employer’s annual dollar volume of business transactions, the employer/employee’s involvement in interstate commerce, work on government contracts, and relevant job descriptions)

An examination of records subject to recordkeeping requirements

Employee interviews

A final conference to address violations and penalties

Keep in mind the DOL has limited resources for its investigations, so it can’t always conduct a “full investigation” of every complaint. As a result, the agency has established other options for handling complaints.

These include:

Limited investigation. A “limited” investigation centers only on a particular employee or group of employees, a specific department, a particular employment practice (such as child labor violations) and/or a defined period of time. A limited investigation does not probe into the employer’s general practices or areas that are not mentioned in the initial complaint.
Office audit. This approach allows you to produce affidavits and requested documentation at a DOL office and does not involve an on-site visit.
Self-audit. Some investigators will allow you to conduct your own internal review of the complaints made. In a self-audit, you compute any back wages owed and report the results to the investigator for review.
Conciliation. In many cases, you and the DOL can consent to a quick resolution, such as payment of back wages to the employee or small group of employees. The matter is then resolved without an investigation.

While it’s up to the DOL investigator to determine the type of investigation to conduct, it’s in your best interest to limit the scope as much as possible, preferably handling it as a conciliation or self-audit. By avoiding a full investigation, you will save time and legal costs, and you may have a better chance of avoiding back-wage assessments and other penalties.

Other tips for navigating an FLSA investigation:

Consider some level of legal assistance. Even if you decide to handle an investigation yourself to avoid paying legal fees, you should involve an attorney, on a limited basis, to help you. For example, you may want to have an attorney assess your liability, for settlement purposes, or review documents and written submissions before you submit them to the investigator. At the very least, you should have legal counsel review any agreements, settlements or other binding documents.
Educate yourself. Regardless of whether you hire a lawyer, you should educate yourself about the investigation procedures and any relevant laws as early as possible in the investigation process. It’s important to know what the investigator has the authority to do and what you may legally be allowed to withhold before agreeing or objecting to the investigator’s requests.
Clarify the range of the investigation. If an investigator agrees to limit the scope of the investigation, or provides a specific description of the scope of the investigation, confirm the information in writing. You may rely on this written confirmation throughout the investigation to challenge requests for anything that is not listed.
Conduct an internal, “defensive” compliance audit. Once you learn you are being investigated, you should determine the status of your compliance with the specific FLSA regulation. You can conduct this audit yourself or with the help of a lawyer. In some cases, if you find the problems and start fixing them immediately, the investigator may overlook earlier violations. In addition, it’s in your best interest to right any wrongs to prevent any lawsuits that could be filed for back pay during the previous three years.
Gather/preserve documents. Do not destroy or throw away documents connected to the investigation. This could be seen as destruction of evidence, resulting in a severe penalty. Additionally, most of the records requested in a DOL investigation are covered by recordkeeping laws, and your company could face penalties for breaking these laws as well.
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