Wage & Hour Audit

Sunny

We got a letter today stating that the DOL-Wage and Hour Division was coming to our facility on 12/4 to "determine compliance..." They want to examine employee time and payroll records for the past two years as well as I-9's.

Does anyone know if these are done randomly? We have an ex-employee who is suing us and has previously called OSHA. Would really like to know if this is random.

Thanks,
Sunny

Don D

Sunny: They will no doubt require that you lay out the records for the entire period before them and they will go through them randomly at first. Each time they spot what appears to be a deviation, suspicious entry or unusual FLSA or Immigration issue, the random will move a bit closer to a complete audit of the file. If the auditor/investigator spots several pay related issues on timecards and isn't satisfied by your remarks, she will no doubt pour through the entire lot of cards in anticipation of your having to write quite a few checks and will have by then summoned another auditor or two to join her. The I-9 audit should be routine and random unless you have suspicious ones in the sample THEY pull. They will also ask you to verbalize your procedure for the I-9 to include questions on your understanding of acceptable and unacceptable documents. Since they do have the absolute right of inspection but no right to 'depose' you on this visit, you can always choose to invite them to simply inspect the forms if you choose not to respond to tedious inquiries about your knowledge; but, I don't think I'd do that.

sonny

My sympathies.

Don provided an excellent answer, but were you trying to find out if they show up randomly or only when they are called with a complaint? Perhaps I misunderstood the question.

Don D

Aha, perhaps I did misread your question. Typically they will not have the time or inclination to randomly select you for audit, plus that would suggest a pro-active governmental body. They will respond to any kind of complaint regarding pay for time worked, immigration issues and violations of FMLA. Unlike an EEOC charge, you will not have a copy of a complaint in hand. The ones I've had, on the front end I got little other than what you have gotten plus maybe the name of somebody who complained about FMLA or wage payment. Nor will you get an exit interview necessarily or a written finding of results. Often its little more than an opportunity for the investigator to justify her/his existence one more time. I've found the recent surge of FMLA 'visits' to be the gentlest of all. The investigators in this area (Jackson, MS) are satisfied with a well constructed memo laying out all the facts as well as your company policy and procedures, coupled with a quick walk through to say they were here, viewing a document or two, then dismissing the complaint.

Sunny

Thanks - I was asking if it was random (which I suspected it wasn't) but your other information was excellent. To make things more interesting, our facility is not the record-keeper for payroll matters. I have all the time cards but we don't issue payroll checks and our Corporate headquarters has the true payroll records. We have a payroll register, sent to us by Corporate for our information but it is a tool, not a record, has no year-to-date info, does not always come, and is shredded after a year.

I called our attorney and advised him of these facts, but he said to offer what I had since I do not think we have any problems. We are a union facility, have not had an overtime grievance in 5 years, and pay o/t after 8 in a day, rather than 40 in the week.

Having said all that, I think I feel a little sick about all of this.

Thanks for all your help,
Sunny

sonny

I remember the sick feeling well, but you will get through it. I have only been throuogh it once, so I don't know if my experience was unique, perhaps Don or others can comment. Also, our audit was for compliance with a Sub-minimum Wage Certificate, which might make it a little different.

1. The woman had no sense of humor. .it was extrememely formal and there was no sense of coaching, helping, information exchange that I experienced in other types of audits (state, accrediting etc.)

2. I felt from the beginning she was determined to find SOMETHING ..(as Don notes, justify her existence?)

3. I recall asking if it was random or as a result of a complaint and they would not divulge the information. Based on input from other agencies, we always felt it was a result of a call.

4. We passed with flying colors the Subminimum wage issue, but got nailed on something that had nothing to do with that. . Staff lunch hours..(OT)I think we ended up paying about $3,000 in back wages and modified our time sheets to correct the matter. Probably would not have been that high had 2 staff not seen the opportunity to augment their savings accounts.

In hindsight, I should have worried less. Like you, we did not feel we had any problems and always operated in an integritous and honest fashion. It sounds like you have a good track record and if they find a techinicality or problem, so be it. . .it would not be a result of a deliberate attempt to screw ee. It ended up being a learning experience for us and we improved our documentation of time. Will be thinking of you on the 4th. Do let us know how it goes.

sonny

So, how did it go?