Preparing for Department of Labor Audits

Understanding what to expect and how to prepare for Department of Labor audits is essential for employers. The U.S. and NYS Departments of Labor (DOL) can audit employers at any given time and are currently on the rise.

Below we have broken down what employers should expect from a DOL audit, how they should prepare for one, and what EBC HR & Payroll Solutions, Inc. can do to assist you in navigating through compliance concerns.

What to Expect:

  1. The DOL may provide little to no advance of an audit. However, you may request time to gather records. The amount of time to gather records will depend on the auditor.
  2. Contact the auditor to find out specific information about the audit. Ask about the focus of the investigation (overtime pay compliance, exempt vs. nonexempt classification, minimum wage compliance, etc.), the time period for records, and the names of employees who might be interviewed.
  3. Gather records in accordance with guidance provided by the auditor. Be prepared to provide documentation elated to the company compensation policies and procedures. Keep track of what information was provided. Do not provide records other than what the auditor requests. This opens you up for more audit and risk.
  4. Designate one or two company representatives to work with the auditor. Some employers designate their legal counsel, other employers designate senior managers. The company representative will be responsible for providing the documents requested, arrange for any additional records to be provided to the auditor, if requested, and coordinate employee interviews as necessary.
  5. Cooperate with the auditor and provide them a quiet place for the auditor to work in.
  6. Auditors typically provide a summary of the results of the investigation. You may ask for the summary if they do not provide you with one. If violations are found, employers are encouraged to consult legal counsel before any settlements are reached with the DOL.

How to Prepare:

There are several different audits that can occur. It’s in your best interest to self-audit annually or more frequently.

1. Conduct a thorough review of your FMLA practices, if applicable.
             A. This may include, but is not limited to:
    • Ensure that your policy is up-to-date.
    • Adhere to employer posting requirements.
    • Ensure your FMLA forms are legally compliant.
    • Review the procedures used by managers when an employee reports an absence that may be covered under FMLA.
    • Review the procedures the company follows to ensure all requests for leave reaches the appropriate administrator (HR, Management, etc.).
    • Seek recertification within the time periods allowed.
    • Comply with FMLA regulations when seeking medical certification.
  1. Conduct a review of employee files.
    A. Specifically, compliance with the Wage Theft Protection.
    B. Organizing and separating files as needed:
    • Employee information file such as application, new hire paperwork, contact information, training certifications, internal policy documents – minimally, the newest will be on top/in front of all other documents in the file.
    • Separated Medical information file for any kind of disability or other leave. You can also keep any of the forms for enrollment and benefits coverage.
3. Conduct a review of employee I-9’s.
    • Maintain Separately from Personnel Records.
    • Develop an Administrative Documentation. 
    • File Active Employee I-9s Alphabetically.
    • Develop Terminated Employee Section.
    • Assess Retention Requirements.
      • Determine the one-year-after-termination date.
      • Determine three-years-after-hire date.
      • Establish the latest retention date.
      • Shortcut for those employed more than three years.
    • Organize Terminated Employees' I-9s Chronologically by Retention Date.
    • Shred Terminated Employees' I-9s Past Retention Date.

4. Conduct a wage and hour review.

5. Conduct a review of your handbook policies. 

EBC’s HR Services offer HR Consultations, Wage & Hour, file, and I-9 Audits, as well as Handbook creation/review to assist you in navigating through compliance concerns. Current HR clients can coordinate with their Advisor regarding Wage & Hour and/or I-9 Audits and Handbook creation and review.

Having EBC HR & Payroll Solutions, Inc. on your team allows you to move forward with confidence, knowing that we’re doing right by your employees, doing right by you, and it’s all being done in accordance with all the latest rules, regulations, and laws. Human resources are a vital aspect of any organization and we know that HR personnel can become inundated by laws and regulations as they work to establish HR and Safety policies and procedures. EBC is dedicated to offering solutions for your organization’s human resources challenges. Our philosophy is to provide a comprehensive, wide range of services to all our clients.

 For more information regarding HR Services provided by EBC, please reach out to Kelley Siembida, Senior HR Sales Consultant at 716.228.4601 or ksiembida@ebchcm.com

For more information regarding Tax/Banking and Payroll Services provided by EBC, please reach out to Mark Terry, Business Development Consultant at 716.998.4404 or mterry@ebchcm.com and/or Charles Bagley, Sr. Human Capital Management Business Consultant at 716.574.9947 or cbagley@ebchcm.com

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