What Happens in a Wage and Hour Investigation?

Kayla Moreland , May 18, 2015

As we’ve previously discussed, the Department of Labor Wage and Hour Division (WHD) has stepped up its enforcement initiatives over the past few years to pursue civil money penalties, back wages, and liquidated damages when violations of the Fair Labor Standards Act (FLSA) are found.  Specifically, Section 11(a) of the FLSA authorizes the WHD to enter an employer’s premises to investigate the employer’s compliance with the Act’s requirements.  Most of these investigations begin after an employee submits a complaint.  But the WHD can also initiate investigations by strategically targeting certain industries (like the restaurant industry, for example) or by examining particular geographic areas.

Here are the main steps in an investigation:

1. INITIAL CONFERENCE. The investigator will first contact the employer to set up an initial conference to explain the review process, or they may just show up unannounced.

2. EXAMINE RECORDS. Next, the investigator will examine records to see if any exemptions apply.  This includes records relating to the employer’s involvement in interstate commerce, government contracts, and the dollar volume of an employer’s annual business transactions.  The investigator will then look for any miscalculations or inaccuracies by examining personnel time records and payroll records dating back at least two years.  If willful violations of the FLSA are reported, records for the past three years may be examined.

3. EMPLOYEE INTERVIEWS. The investigator will interview certain employees to verify their payroll records and inquire into the employer’s pay policies.

4. ENFORCEMENT ACTION. If violations are found, the investigator will meet with the employer to discuss corrective actions and request any back wages owed to the employees for minimum wage and overtime violations.

Source:  DOL Fact Sheet http://www.dol.gov/whd/regs/compliance/whdfs44.htm; BURKE COSTANZA & CARBERRY LLP, Department of Labor Investigations – Basis for an Employer, Jan. 31, 2013 http://www.bcclegal.com/labor-employment-blog/2013/1/31/department-of-labor-investigations-basics-for-an-employer
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