Fair Labor Standards Violations Audits

It is no secret that the Obama administration is taking a firm hand to employers that violate the Fair Labor Standards Act. When this happens you will only have 72 hours to prepare for their arrival. This creates a flurry of paperwork and stress that can easily be avoided. Here are some hot buttons that can trigger an audit:

• Exempt missclassification- if your employee is not free to exercise their own judgement and act accordingly, then they are not exempt. Keep orderly records and outline exactly what exempt classification is for your employees.
• Work suffered or permitted- this is basically working off the clock. Create a policy to avoid such behavior, and follow up with documentation or disciplinary actions.
• Time shaving-this is very much the same as work suffered or permitted. Have employees take their breaks to ensure this is not happening in your office. Follow up with documentation or disciplinary actions when neccessary.
• Failing to include all pay in employees' regular rates-this can be any type of bonus or on-call pay. Communicate your policy to your employees.
• Failing to include all overtime hours-make sure that you report all hours worked in any department are counted toward overtime. Even if the employee works in different departments, the hours still count to overtime for the week. Document your policy and inform your employees.
• Wage deductions that cut into overtime or minimum wage- Identify current deduction practices and ensure that they meet federal and state standards. Document these laws and implement them into your policy. Inform your employees.
• Inadequate record-keeping-make sure that your time sheets are accurate and reflect all time worked for each employee. Provide training and place audit procedures in place to ensure this is being followed.

If you don't follow these guidelines, expect the unexpected. Here are five tips to handle your audit:

1. Select a representative to work with the auditor
2. Review the requested documents before handing them to the auditor.
3. Prepare your administrative staff to work with the auditors.
4. Fully comply with the auditos' findings.
5. Document everything.

For further information, visit our website at http://www.peoplelease.com/.