Like most things related to Human Resources, being proactive is always the best policy. Employers know that the U.S Department of Labor (DOL) can perform an audit at any time. Sometimes these audits are triggered by an employee complaint, but they can also occur in targeted low-wage industries such as agriculture, restaurants, garment manufacturing, guard services, day-care centers and hospitality to screen wage and hour violations. It is crucial for employers to understand the audit process so they can be prepared to handle the situation if it occurs. Below is a basic guide to help employers know what to expect in the event they are audited.
The DOL does not provide advance notice of an audit. If the DOL shows up to do one, employers may ask for time to gather their records. The amount of time granted to do so is at the discretion of the auditor.
Employers have the right to contact the auditor and ask for specific information regarding the audit. Employers should ask why the investigation is happening (overtime pay compliance, minimum wage compliance, exempt vs. nonexempt classification), the time frame for records requested by the auditor, and the names of the employees who may be interviewed.
Employers should gather the records requested by the auditor. In addition to those, employers should provide documentation of company compensation policies. Ensure that you keep records of any information provided, and do not provide anything the auditor does not ask for.
Employers can designate certain employees like legal counsel or senior employees to work with auditors. In this instance, the employees will provide paperwork, documentation and coordinate employee interviews.
Be courteous and cooperative. Offer a quiet place for the auditor to review the records.
Employers can ask for a summary of the investigation findings. If violations are listed, employers should consider seeking legal counsel prior to agreeing to a settlement.
If you'd like an expert third party perspective, please reach out to Cris Board at Surety HR and find out how she can conduct an HR Audit for your business. Cris can be reached by email, or calling 440-249-5688.