The Start of a Wage and Hour Investigation
You will receive a visit from a Federal or State DOL investigator with a letter stating they will be conducting a wage and hour audit and to contact them as soon as possible. The initial conversation will be cordial but disclose very little facts about why they are conducting the audit. The investigator is typically looking into one location and will present a list of documents that need to be provided within a time frame that both you and the investigators agree is reasonable. In our experience at this stage of the investigation, the initial documents request is much less than what they can request and most likely specific to a complaint that was called into the Department of Labor. Also, the look back period is usually shorter than the full 2 years. If there is full cooperation, the documents provided are timely and prove compliance, and the company shows an excellent knowledge of wage and hour laws then the audit is quickly resolved, and manageable fines and penalties are assessed. If the review of the initial documents identifies compliance violations and employee interviews disclose common ownership of multiple locations, the investigator immediately sends a letter requesting a large amount of information for all locations for a period of two years.
Required Documents & Responses of a Wage and Hour Investigation
- Identify each and every person employed by Defendants looking back two (2) years through the present by stating each individual’s first, middle and last names, last known address, home telephone number, mobile telephone number, e-mail address, date of birth, nickname or alias, date of hire, date of termination, all job titles of positions held, the start and end dates of each position held.
- Identify person employed looking back for two (2) years through the present between the ages of 14 and 17 at the time of hire. For each minor identified supply a copy of minors working papers.
- Provide payroll records for each and every person who received compensation for two (2) years through the present: include payroll journals for each pay period to include hours worked, payrate, overtime payments, tips recorded as compensation, deductions and any bonus payments made. In addition, include any and all payments made to employees in the form of cash or company checks, the reason for these payments and the employees acknowledgement of receipt of such payments.
- Provide every employee’s weekly time and attendance reports looking back for two (2) years through the present. Each report must be for the company’s 7-day pay period and show the employees name, position and daily punch-in, punch-out and break periods.
- All records for the period looking back two (2) years through the present regarding tip pooling. Describe in detail which employees, including management employees, received tips, turned over tips and/or collected tips. All documents relating to employee tips including but not limited to documents showing: the amount in tips each employee received each pay period; the amount in tips turned over to the company or otherwise not retained by the employees; where tips not retained by employee went. Identify the name of each employee with whom tips were shared, the employee’s position (such as server, busser, etc.) and amount shared with that employee.
- All personnel files for the employees listed to include: any relevant wage and hour personnel policies, any written payroll policies and procedures, any and all communications with participants in the tip pool about tips and/or the treatments of tips during the relevant time period. All policy memoranda, notices to employees, memos to employees, handbooks, signed agreements, posted signs or any other documents that set forth the company’s pay policies for the relevant period.
- Identify all salary employees who were or are exempt from overtime. Explain in detail their responsibility for assigning, scheduling and supervising the work of others, hiring, firing, and disciplining employees, their level of involvement in decisions making for the operation of the company and enforcement of company policies and procedures.
- Identify bonuses paid to employees for two (2) years through the present and describe the following with respect to each bonus identified: Nature, purpose and terms of each bonus; how each bonus payment amount was computed, when each bonus payment was made (e.g. weekly, monthly, etc.); the amount in bonus payment each employee received, how and when employees were informed of each bonus; and who made decisions concerning each bonus.
How We Prepare and Assist You
Our clients are trained on all wage and hour compliance for both a Federal and/or State wage and hour investigation. You will be prepared to present all the following forms, documents and payroll procedures in a timely manner. As a current client, we will work directly with the investigators to provide all documents in the formats they require and explain all your company wage and hour procedures and processes.
- Review and audit payroll procedures by comparing the time & attendance reports to the payroll journals to ensure proper compliance. Both documents are able to be stored on our company portal for easy access if ever needed.
- Teach correct tip pooling procedures and provide a weekly tracking system that is customized to your company tip-out procedures. Weekly spreadsheets can be stored on our portal if needed.
- Provide all the notices and handbooks that will include all the required employee notifications. Proper onboarding paperwork will be created, updated as required and available for all your location on your homepage in the myHRCD website. Teach proper onboarding steps to make sure employee files are complete with signed acknowledgement pages where needed.
- Do a thorough review of exempt employee (salary workers) job responsibilities and work week particulars to make sure of eligibility. Review the latest interpretations of the qualifications required to pay an employee salary and exempt from overtime.
- Review all “other” payments made to both hourly and salary employees to make sure the process is correct. There are specific steps to pay bonuses, both non-discretionary and discretionary, boosted rates, 1099 employees and wages paid by check or cash.