It’s been more than seven months since they took effect — but is your company in compliance with the Department of Labor’s new overtime regulations?
The DOL promised strict enforcement of the new regulations, which took effect Aug. 23, 2004, and now boasts that it “has set new records for aggressive wage and hour enforcement.” In fact, the DOL recovered more than $212 million in back wages in 2003, representing a 21 percent increase from 2002 and a 61 percent increase from 2001.
Not surprisingly, most investigations are the result of employee complaints. If your company has a disgruntled employee or two, and you are not confident in the company’s wage and hour practices, you may be at risk for a complaint to the DOL.
To help mitigate this risk, listen to the complaints of your employees. They may alert you to improper practices of which you are unaware. Further, employees who feel valued are happy — and happy employees don’t file complaints with the DOL or initiate private lawsuits.
* How will I know if I have been targeted for an investigation? Although you will not be told why your company is being targeted, a DOL compliance officer will notify you that an investigation will be conducted and make an appointment to conduct an initial interview.
* What should I do when the DOL wolf comes growling at my door? Remain calm. You will get through this. Further, always keep in mind that it is in your best interest to maintain a cooperative attitude and ensure that the investigator is well-treated and comfortable.
At the initial interview, the investigator will outline the scope of the investigation and try to explore your approach to FLSA compliance. At this point, you should designate certain employees who are very familiar with your company’s payroll practices and make them available to provide answers to the investigator’s questions.
After the initial interview, the investigator will settle into a space that you provide and begin analyzing your payroll and time records. The investigator does not need a subpoena to look at these records.
After reviewing your records, the investigator will interview certain employees. The purpose of these interviews is to test the adequacy and accuracy of the examined records. This is also a good opportunity for the investigator to get tips on possible FLSA violations.
Make sure the employees being interviewed do not feel pressured to answer questions in a certain way or fear retaliation. This will only cause you more trouble. The best approach is to simply inform your employees that an investigation is occurring and encourage them to cooperate fully and to tell the truth.
* What happens after the investigation? After the investigator has concluded the fact-gathering process, a conference will be held to inform you what, if any, violations were found. If the investigator found violations, he or she will determine the back pay that is owed and present you with two options: Pay up or be sued.
Deciding which option to take should be approached with extreme caution and must involve consultation with your attorney.
* How can I avoid all of this? The DOL is being aggressive, and you should be, too. Monitor your payroll practices diligently to ensure your compliance with the FLSA. Further, seek legal advice if you have any compliance questions to avoid becoming part of the DOL’s ever-increasing back-pay statistics.
Hans A. Nilges is an associate with Brouse McDowell. Reach him at (330) 535-5711 or [email protected].
