Department of Labor Investigations – Basics for an Employer

Article submitted by Mr. Richard Castleton who is currently practicing law with Burke Costanza & Carberry LLP. His practice focuses wage and hour compliance and defense, EEOC compliance and defense, and other similar areas of practice. He is licensed in the states of Colorado and Indiana. Visit the firm website for more information — www.bcclegal.com

Over the last several years, the United States Department of Labor Wage and Hour Division (WHD) has substantially increased enforcement efforts through increased personnel, funds, and focus on certain industries. The WHD enforces several laws, including the Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA), among others. Understanding the mechanics of a WHD investigation can help the employer remain calm and prepare appropriately.

General Information
WHD investigations begin as a result of either an employee or competitor complaint, or a WHD-initiated investigation. When conducting FLSA investigations, Investigators focus on employer compliance with minimum wage, overtime, child labor, and recordkeeping requirements, as well as any exemption requirements the employer may claim. Investigators gather information by (1) conducting an initial conference, (2) reviewing records, (3) interviewing employees, (4) calculating back wages, and (5) conducting a final conference.

Initial Conference
Investigators will initiate the investigation either by setting up an appointment for an initial conference or stopping in unannounced. During the initial conference, the investigator will ask about the business’s nature, size, gross revenues, payment methods, work week, claimed exemptions, and other general information.

Records Review
After the initial conference, the investigator will begin reviewing records or interviewing employees. An employer should provide a quiet, private place for the investigator to work. During records review, the investigator may review, record, or copy relevant records, including payroll records, employee records, employment contracts, and others.

Employee Interviews
The investigator will also interview employees to ask about the employer’s pay practices and policies. The WHD will insist that most interviews be conducted without the employer or its attorney present. However, this privacy does not extend to members of management. No employer should permit an upper-level manager to be interviewed without the employer or employer’s representative present.

Back Wages
The investigator's next step is calculating back wages. Employers should always verify that the investigator considers vacation time, holidays, and other non-working days that could mitigate the amount of back wages. Furthermore, employers should also be aware of applicable Circuit Court rulings on back wage calculations for certain violations. Circuit Courts’ rulings prevail if there is a different in WHD enforcement policy and the courts, and such differences could have a significant effect on the amount of back wages due.

Final Conference
At the end of the investigation, an investigator will meet with management and discuss violations. The investigator will invite the employer to come into compliance and disclose the amount of back wages owed. If, however, the employer refuses to come into compliance, or disagrees with the investigator’s findings on exemptions, back wages, or other issues, the case may be referred to the investigator's manager.

Conclusion
The WHD is currently engaged in an unprecedented number of investigations. Mistakes are often made. Employers should be cooperative and amicable, but remain vigilant to spot errors and ensure that the investigator is taking into consideration all possible exceptions and exemptions. Employers should seek clarification when needed and should feel comfortable to hire an attorney if needed.

About the Author and Burke Costanza & Carberry LLP

Mr. Richard Castleton is a former investigation with the U.S. Department of Labor Wage & Hour Division who is currently practicing law with Burke Costanza & Carberry LLP. His practice focuses wage and hour compliance and defense, EEOC compliance and defense, and other similar areas of practice. He is licensed in the states of Colorado and Indiana. This article is for information purposes only and is not legal advice. Readers should contact a licensed, qualified attorney to discuss the matters addressed in this article. If you would like to contact Mr. Castleton, please contact him at 219-769-1313 or castleton@bcclegal.com.

Website: www.bcclegal.com

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Posted January 2013 on www.SeniorBusinessConnection.com