Employers should be aware that the federal Department of Labor or its state counterpart can audit their businesses at any time. While current and former employee complaints often trigger these audits, they can also occur at random.
Department of Labor audits can result in back wage assessments, civil penalties, stop-work orders, individual liability for business owners, and even criminal charges in extreme cases.
Understanding what documents may be requested and how to prepare for audits can help employers navigate the audit process more effectively and avoid common employer pitfalls and associated penalties.
Section 11(a) of the Fair Labor Standards Act (FLSA) authorizes the Wage and Hour Division of the United States Department of Labor (DOL) to investigate and gather data regarding an employer’s compliance with the wage and hour requirements set forth in the FLSA.
When conducting an audit, the DOL typically follows a standard procedure: an appointment letter notifying the employer of the audit, an opening conference with a company representative, a site visit if needed, a review of records covering a two-year period, employee interviews, and a closing conference to discuss the results of the investigation.
Employers should be prepared to provide a comprehensive set of records during a DOL audit. The following documents are typically requested for inspection:
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