• D.O.L. Wage-Hour Audits Prove Costly For Employers
  • September 12, 2005
  • Law Firm: Kaufman & Canoles, A Professional Corporation - Norfolk Office
  • Following the changes last year to the overtime exemption rules under the federal Fair Labor Standards Act ("FLSA"), more local employers have begun to conduct self-audits of their overtime pay practices. These audits are designed, in part, to avoid liability that might result from the Department of Labor (D.O.L.) reviewing compliance efforts after an employee complains. A recent survey indicates that there is a significant risk that the D.O.L. will eventually audit a company whether it has taken steps to bring its pay practices into compliance or not. The survey, conducted by Business and Legal Reports Inc. ("BLR"), found that 1 out of every 5 employers has been audited at least once by the D.O.L. for federal wage-hour violations.

    Not only do local employers run a risk of costly audits by the D.O.L., but lawsuits alleging wage-hour violations are becoming more and more common. Lawyers who specialize in suing employers recognize the difficulty employers face in trying to comply with technical wage-hour rules. As a result, employees are more frequently alleging violations and requesting large damages and attorneys' fees in lawsuits against employers.

    FYI

    Given the probability of being audited and the cost of wage-hour violations, self-audits to ensure compliance make sense. To aid clients in this regard, the K&C Employment Team provides legal guidance concerning compliance options. When appropriate, our team utilizes a consultant, Gilbert Parker, who is a former District Director of the Wage-Hour Division of the U.S. Department of Labor. This allows employers to receive confidential advice on how to most effectively reduce wage-hour liability before facing a D.O.L. audit or lawsuit.