The U.S. Department of Labor (DOL) administers and enforces more than 180 laws, on topics as diverse as migrant workers and veterans, with a host of wage, benefit and safety laws in between. There are a handful of these laws, however, that are most likely to be the subject of a claim filed with the DOL against a private employer. These include the Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), Uniformed Services Employment and Reemployment Rights Act (USERRA) and Employee Retirement Income Security Act (ERISA). Fortunately, there are some basic strategies that employers can take to minimize trouble if the DOL comes knocking.
1. Audit the high risk areas affecting your business now. Periodically audit your company’s practices in the areas that are high on the DOL’s radar. Under the FLSA, those issues include:
- Proper classification of employees as exempt and nonexempt
- Misclassification of employees as independent contractors
- Policies and practices regarding compensating nonexempt employees for working time, especially travel time, on call time, meal breaks, preparatory work before and after normal working time (i.e., donning and doffing) and time spent by employees outside of normal working hours checking and responding to emails
- Deductions from the salaries of exempt executive and administrative employees that would cause them to lose exempt status
With the FMLA, DOL investigators are less tolerant of employers who fail to send required FMLA notices to employees requesting a leave of absence. Audit your company’s FMLA policies and practices to make sure that they are compliant with the DOL’s regulations, and make sure your HR Department knows to send out the FMLA eligibility notice as matter of course. Similarly, make sure HR knows the laws protecting employees who need a leave of absence for service in the armed forces so that these employees are not denied leave, benefits or reinstatement in violation of USERRA.
In the employee benefits arena, has your company established a de facto severance plan under ERISA by always paying a standard severance to employees terminated without cause? If so, the company either should properly end the practice or formalize the severance program in accordance with ERISA. Also, make sure your company complies with documentation requirements for cafeteria plans and if applicable, the HIPAA Security Rule and HITECH requirements. These are two areas of special focus by the DOL, but are sometimes overlooked by employers.
If your company is a federal contractor or subcontractor, determine which additional laws regarding wages and benefits apply to your company based on the type of work (for example, construction or service work), and make sure your company’s compensation and benefit practices are in compliance.
2. Comply with posting requirements. The DOL has mandatory posting requirements under a number of laws. These posting requirements can be found on the DOL website. Not only is compliance with the posting requirement simple, but it also will be one less thing to worry about if the DOL decides to conduct an investigation of your company.
3. Take advantage of good policies and safe harbors. Good, compliant handbook policies show the DOL that your company is making an effort to comply with the law and the DOL's regulations. Some policies also can minimize liability. For example, a strong policy that clearly prohibits off-the-clock work and provides a complaint procedure can make a difference when an employee claims that he was required to work outside of his normal hours and was not compensated for it.
Also, be sure to include the FLSA safe harbor regarding deductions from wages from salaried exempt employees. With this safe harbor, employers can prevent their exempt employees from losing their exemption if the employer makes an improper deduction. Additionally, clear policies, such as those governing FMLA and USERRA, help supervisors and HR avoid mistakes.
4. Keep good records. It is well worth the effort to make sure your company is retaining all documents required by applicable law. This is especially true of documents reflecting proper FMLA notice and certification and timekeeping systems that accurately record all time worked. Good recordkeeping minimizes hassles in a DOL investigation and can put a higher burden of proof on employees in wage cases.
5. Know what to do when the DOL shows up on your doorstep. Hopefully, by the time the DOL comes knocking, you can be confident that your company is in compliance. If not, you can try to buy some time. Often the DOL will send a notice letter warning of possible noncompliance or commencement of an investigation. Do not ignore this letter. Investigate the issues, organize relevant documents and start gathering the information needed for a coherent response.
If the DOL has requested specific documents, pull copies of those records and put them in labeled folders so that the DOL will not need to go rummaging through your files. Check job descriptions and other relevant documents for accuracy and consistency. DOL interviews of your employees will focus in part on whether the documents you provide are correct and will focus on inconsistencies. Ask management employees slated for interview if they want to have company counsel present when the DOL questions them. Contact HR personnel at other company locations to alert them to the investigation in case the DOL decides to expand the investigation to other offices. If the DOL investigator is at your door and wants to investigate, politely ask if you can schedule for the next day or some other time when the right personnel will be available.
Remember, if you refuse to give the DOL access, the investigator can come back with a subpoena, and she likely will be much more detailed in her investigation. Above all, be courteous and cooperative. The investigators have discretion in deciding whether to resolve a matter and whether to impose penalties.