Are Your Clients Ready for a Wage and Hour Audit?
The United States Department of Labor’s (DOL) wage and hour audits are on the rise.¹ Why should your client care about a DOL audit? First, the DOL can order your clients to pay a double damage penalty for failing to comply with the law. Second, owners and managers can be held personally liable for unpaid wages.
This article is intended to: (1) provide you with a general overview of the Fair Labor Standards Act (FLSA); (2) help you understand why it is beneficial to make a good faith effort to comply with the FLSA at the outset; (3) provide an overview of the DOL wage and hour audit process; and (4) provide details and suggestions for your clients so they can avoid some of the more problematic areas with the FLSA.
These recent headlines should provide plenty of reasons for your clients to sharpen their wage and hour practices:²
- Tulare, California, cabinet company to pay nearly $250,000 in back wages, damages and penalties following U.S. Labor Department investigation.
- Sacramento, California, landscaper to pay more than $185,000 in back wages and damages to employees.
- The U.S. Department of Labor has ordered the owners of two Boise restaurants, Eddie’s Restaurant and Eddie’s Diner, to pay $26,000 to employees in back wages.
A. The Basics of the FLSA.
The FLSA applies to all enterprises that are engaged in interstate commerce, all enterprises whose annual revenues exceed $500,000, hospitals, businesses providing medical or nursing care for residents, and schools and preschools.³ Thus, almost all companies are subject to the FLSA.
C. Clayton (“Clay”) Gill is a business and employment lawyer at Moffatt Thomas, and acts as outside general counsel for many small and medium sized companies. Mr. Gill is also a member of Moffatt Thomas’ Board of Directors. He can be reached at email@example.com or (208) 345-2000. More information on the firm is available at www.moffatt.com.