Employers Can Expect More Audits From US Department of Labor
It seems like the US Department of Labor, or DOL, is being quite stringent with mid and large sized companies. If you follow the statistics closely, you will notice DOL is quite active with its audits since past few years, which is definitely not surprising. The agenda was clear when they derived their major goals in DOL 2011 Strategic Plan:
- Having workplace with safety and security
- Having a prepared and competitive workforce
- The walls of economic protection should be strengthened
Their focus on having secure and safe workplace means ensuring the labors and employees are provided with proper wages, safety measures, equal opportunities to each of them, clean work environment, and all legal rights.
The US Department of Labor is quite large. It has around 27 divisions with their respective rights and functions. Last year, they added over 300 field investigators under American Recovery and Reinvestment Act, we can now expect more business audits.
These audits are conducted when an employee files a case against his employer, irrespective of the current employment status of the employee. As soon as they receive such a complaint, they target the entire industry. Majority of such complaints, however, are from industries like agriculture, garment industry, day care, health care, janitorial services, hotel industry, and so on. The payments are generally low in these industries, and majority of workers are immigrants.
There are various issues on which a conflict arises, some of the common one audited regularly by DOL and its divisions are:
- Independent Contractor Status
- Violation of Child Labor Act
- Violation of Minimum Wages Act
- Categorizing an employee as exempt
- Issues concerning overtime payment
- Unexplained reduction of wages
- Violation of Family and Medical Leave Act
- Issues regarding fair pay
- Non payment of retirement benefits
- Issues regarding other wages like incentives, bonus, compensation, etc.
Apart from US Department of Labor, many states in the country has separate department to deal with such issues. California, for instance, has Division of Labor Standards Enforcement. They can audit any business in California independently, without any intervention from US Department of Labor.
If there is a DOL audit in your firm, an authorized official will visit your company and interview the desired employees and the employer. He will check safety measures and precautions taken by your company to safeguard your employees. He would possibly review last 3 years payment history and check if people were paid on time without any issue. Hence, it’s quite important for you, as an employer, to have all the payment records.
If you had any conflicts with an employee regarding payment or employment, or if you think your payment records are not up to the mark, hire an attorney and get things in proper shape. It would definitely be a bit expensive. It would, however, be lot more expensive if your employee files a lawsuit against you.
