There are times in every business when the topic of the Department of Labor’s ability to turn an average work week into sheer panic, disruption and angst for your workforce, as well as company management
You can avoid those feelings of dread and uneasiness by following some HR best practices, adhering to the State and Federal Regulations regarding the wage and hour provisions of the Department of Labor.
The absolute best way to pass an audit is to prevent one in the first place. While it is within the power of any employee to file a wage & hour complaint, it is quite another action to suffer an actual audit. To avoid, or at least minimize the chances of an audit, try instituting these best practices. They are:
- Know and understand the regulations thoroughly. Ensure all management and supervisory personnel have an in-depth working knowledge of the Fair Labor Standards Act (FSLA).
- Make certain of any conflicts between State and Federal Wage and Hour Laws. If there is a conflict, err on the side of the employee, not management or company.
- Training of management and supervisors regularly to ensure compliance is always in your best interests. Understanding their ability to cite specific aspects of the Act in everyday language will go a long way toward a worry free workplace.
- An automated system of HR documentation such as time and attendance will prevent document loss, mis-filing or incomplete files. Thorough, complete job descriptions, task lists, payroll software and benefits information should be reviewed regularly.
- Ensure compliance with regard to compensation. Consistency and fairness are mandatory. Inconsistent pay practices will trigger employee complaints, which sometimes result in the filing of a formal DOL complaint.
- Perform self-audits semi-annually, or annually at a minimum. The use of an attorney fluent in Labor Law is one way to ensure compliance.
- However, with a practical working knowledge of regulations, every manager and supervisor will have a chance of performing it yourself, with oversight by a licensed labor attorney to review your findings.
- Review thoroughly pay practices, job descriptions, overtime policies and pay to ensure the job matches the compensation.
- Make certain that non-exempt and exempt fall within the guidelines, and ensure that exempt employees meet the required test for compliance in the overtime provisions.
- Independent contractors have a 21 point check to be considered so; avoiding their use is a wise decision.
- Make certain that the State and Federal Employee posters are in good repair, complete and in full view of the employee area.
Handle internal complaints immediately by thorough review. If you are confident of your compliance position, handle the employee’s complaint swiftly, by either correcting any wrongdoing, or standing firm in your decision. Inactivity or an insecure response will more than likely trigger a formal complaint.
Pay overtime without delay when a determination is made regarding an incorrect calculation of overtime pay. Typically, the Wage and Hour Division of the DOL will audit 2 to 3 years of previous pay, so if there is a question regarding past deficiencies, make certain to pay any past overtime as soon as possible, with the full knowledge of the employees.
Net Regular Rate calculations should be taken into consideration when calculating bonus, premiums for shift differential and other special pay options. In some states, net regular rate is also calculated on vacation time for tipped personnel.
Enlist the support of the Department of Labor. They offer a variety of information sources as well as tools on their web site. http://www.dol.gov .
There is a full time effort in ensuring management and staff fully understands the intricacies of HR Rules and Regulations. A knowledgeable, fair and equitable management team can ensure compliance. In tough times it is easy to forget about maintaining a comprehensive internal auditing program, however forewarned is forearmed.