Wendy Hyland's article "What to Expect When You're Not Expecting (visits from the feds)," featured on ABA, outlined best practices for handling, from start to finish, unplanned investigations involving two of the federal government agencies most active in employer audits: the U.S. Department of Labor (USDOL) and the Department of Homeland Security (DHS).
Labor Pains: The Department Of Labor
The USDOL might show up on your doorstep for an investigation to assess your compliance with the Fair Labor Standards Act, the federal wage and hour law. Investigations generally arise from a current or former employee's complaint, but they may also stem from an internal USDOL initiative targeting businesses in specific industries.
Planned Visits
Sometimes the USDOL investigator will initiate an audit by transmitting a scheduling letter announcing a date and time of arrival to review documents. The letter will typically request a list of current and former employees for the past two years, along with various payroll records to determine whether these employees were properly compensated. This will include an examination of overtime pay, exempt status, and paycheck deductions.
You are also often asked for documents to demonstrate compliance with rules on record retention, minors in the workplace, independent contractor classification, and perhaps even the Family Medical Leave Act.
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