If your company has been the subject of an audit by the Department of Labor (DOL),
you're not alone. Of companies responding to our recent survey, Five-Minute
Overtime Audit: See How Your Company's Reaction to the New Overtime Rules
Measures Up, 15 percent said they had been audited once, and 5 percent said
they had been audited between two and five times. DOL audits are often productive:
In 2004, the agency collected $197 million in back wages for more than 280,000
Such audits are generally triggered either when a current or former employee
files a complaint with the DOL or when the DOL targets a specific industry for
investigation. As usual, in 2004, the DOL targeted a variety of low-wage industries
including day care, agriculture, janitorial services, the garment industry,
healthcare, the hotel and motel industries, restaurants, and temporary help.
DOL's Wage and Hour Division has traditionally targeted low-wage industries
with vulnerable, and often immigrant, workforces, and those industries with
a history of chronic violations.
If the DOL audits your company, a representative will visit your facility to
conduct interviews, make sure the required posters are hung, and possibly examine
the time clocks to determine whether your company is in compliance with the
Fair Labor Standards Act.
DOL will then review up to 3 years' worth of your wage-and-hour records
and investigate your wage-and-hour practices to determine whether you have paid
your employees the proper amount of overtime. This will include a review of
your pay records, so you must make sure the records are accurate and organized.
It is interesting to note that when comparing the number of audits to the size
of the company, BLR's survey showed that the only companies that reported
having been audited more than five times were companies with more than 500 employees.
For more information about our survey and about self-audits, see this article.