Knock, Knock: It’s the Department of Labor!

The Society of Human Resource Management recently published an article notifying its members that surprise Department of Labor (DOL) visits are on the rise. According to the DOL’s Wage and Hour Division administrator, the DOL is showing up at worksites unannounced, seeking to conduct immediate wage and hour investigations. To help minimize panic and disclosure of inaccurate, excessive, or confidential information, employers should have a protocol and appropriate record-keeping practices in place.

What information is the DOL seeking?
Typically, the DOL is looking for documentation that employers are required to maintain and have available for inspection under the Federal Regulations. This documentation includes:

  • Legal name of the company and all other names used (such as “dba” names);
  • Company’s federal employer identification number;
  • Complete list of employees, with all appropriate employee information, including: full name, employer’s identifying symbol or number (if applicable), address, sex, salary/hourly rate information, job title, shifts, and exempt/non-exempt designation for overtime;
  • Birth dates for all employees under the age of 18 who worked during the past year;
  • Payroll and time records for the past two years, including the most recently completed payroll, and records of retroactive payment of wages, if applicable;
  • The company’s gross annual dollar volume of sales and purchases for past three years; and
  • 1099 forms, contract documents, names, and telephone numbers for any subcontractors.

Employers should take note that the investigation’s scope is limited, and records not required by the Federal Regulations need not be disclosed. For example, maintaining employee email addresses and telephone numbers is not required and therefore employers may decide not to provide this information. Also, if the employer is willing to stipulate that its annual revenues exceed $500,000, the employer may be able to avoid producing documentation confirming the annual revenues.

Who should be notified if the DOL shows up?
In addition to maintaining the records mentioned above, employers should also have a protocol for notifying certain key people of the surprise investigation. Those properly equipped to handle the investigation include the employer’s corporate officials, in-house or outside counsel, and human relations professionals. If the appropriate professional or attorney is not available at the time of the visit, the employer should suggest that the investigator remain in the waiting room and try to arrange a different time for the investigation.

Management and counsel should carefully review the investigator’s interview and document requests to assess how best to respond. Taking this time to make an assessment, as well as standing your ground on certain requests will help ensure that the DOL gets the information to which it is entitled, but nothing more.

Ultimately, maintaining appropriate records and promptly notifying key individuals will help employers deal with unexpected investigations calmly and appropriately.

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