US Dept. of Labor Employer Investigations

August, 2016



Recently, an employer client contacted me to assist the company in an investigation by the U.S. Department of Labor, (“DOL”), of the employer’s practices under the Fair Labor Standards Act, (“FLSA”).  This is the law governing minimum wage, overtime ,job classification issues and child labor.  The Connecticut Department of Labor enforces a similar state law.

Why was this company chosen for the investigation?  The employer and his/her attorney never know.  It could be the result of an anonymous employee complaint or it could be the result of a random selection of certain employers in a certain industry in a certain region.  For example, earlier this year I assisted another employer in the restaurant industry in Southeastern Connecticut that had been targeted, along with other restaurants.

The FLSA requires that most employees in the United States be paid at least the federal minimum wage ($7.25 per hour) for all hours worked and overtime at time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek.

However, the FLSA provides for an exemption from both minimum wage and overtime pay for employees employed as a bona fide executive, administrative, professional and outside sales employees.  Section 13(a)(1) and Section 13(a)(17) also exempt certain computer employees.  To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week, although this amount will change at the end of this year.  Job titles do not determine exempt status, nor can an employer classify an employee or a position as “salary” without meeting these fact-specific tests.

The scope of the DOL’s investigation can extend back two years to review payroll data, employee lists and hours recorded.  The DOL Wage and Hour Investigator may conduct a “walkaround” inspection of the employer facility, observing employee duties and looking for wage and hour violations, as long as it does not disrupt the employer’s business.  For example, employers are required to post DOL FLSA posters at the workplace.  The Investigator may also speak with the employees, submit questionnaires or call them after work hours.

While the focus of such investigations is to protect employees and assure that they are properly paid for hours worked, such investigations require a significant effort by the employer to provide much information to the DOL.  The conduit for such information should always be a knowledgeable employment attorney.

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