Ask the Lawyer, Daniel A. Gwinn, Esq.-Audits By Wage & Hour Division?
BEING AUDITED BY WAGE AND HOUR DIVISION OF THE DEPARTMENT OF LABOR? WHAT TO EXPECT
QUESTION: I received a letter from the Wage and Hour Division of the Department of Labor, that says I am being audited for failing to pay some of my employees overtime What do I do?
ANSWER: The Department of Labor’s (DOL’s) Wage and Hour Division audits employers for compliance with the Fair Labor Standards Act – which sets out, among other things, which workers can be classified as exempt from overtime and which workers must receive it, overtime vs. straight time, minimum wage, etc. The division has broad authority to investigate employers whose gross receipts are more than $500,000 per year for violations of any of these laws. Recently, the DOL has focused on misclassification of employees as exempt from overtime (salaried) and misclassification of employees as independent contractors, when they are employees.
When preparing for an audit, you will need your payroll records for the past two years, including both your current and former employees, annual dollar volume of sales and tax returns. The auditor will also want to know if you have done any work on government contracts. If the auditor believes you violated the law deliberately he or she may ask for records for the past three years.
The auditors will examine the records and interview certain employees in private before asking to meet with the employer and/or a person who is authorized to commit the employer to corrective actions if violations are found.
If the DOL finds a “willful” violation of the law, you may be liable for back wages to your employees, as well as double damages, and even civil penalties for each violation. If you have a lot of workers, the penalties can add up fast. Even if a violation was unintentional, you may still be responsible for back wages.
An attorney can assist you at any stage of this process, but it is generally better to get assistance as soon as possible.
The lawyers at GWINN TAURIAINEN PLLC are experienced attorneys and are happy to answer your questions. Give us a call for a free initial telephone consultation about your legal needs. For consideration of your questions in our web column, please submit your inquiry on the “Contact Us” page of our website at www.gwinntauriainenlaw.com.
GWINN TAURIAINEN PLLC, is a Troy based law firm representing clients from Warren, Sterling Heights, Ferndale, Royal Oak, Oak Park, Oakland and Wayne Counties and all of Southeast Michigan.
ASK THE LAWYER
By: Daniel A. Gwinn, Esq.
Attorney and Counselor at Law
GWINN TAURIAINEN PLLC
901 Wilshire Drive, Suite 550
Troy, MI 48084
(248) 247-3310 facsimile