FLSA audits are important, as we saw in yesterday’s Advisor, and we want to help you do them right, but first, note the one factor you absolutely must have in place, if you do one at all.
In almost every case, you’re going to be ahead of the game—and the Department of Labor investigators—when you conduct a wage and hour audit. But the one case where you could get burned—big time—is when management isn’t committed to fix the errors the audit uncovers.
Here’s the problem—you never know what the results of the audit will be. Too many managers make the mistake of assuming that everything will be OK. But audits often uncover problems like exempt/nonexempt misclassification, failure to pay overtime, failure to pay for donning and doffing time, allowing off-the-clock work, etc.
If management doesn’t want to commit to taking corrective action if problems do surface during the audit, you may be worse off than if you’d never conducted the audit at all!
This is because if audit shortcomings are discovered, but aren’t corrected, the audit report turns into a “smoking gun.” The report proves that management knew about the problems and didn’t take action. That makes the violations “willful” (and that makes them even more expensive).
And there’s every chance these days that that smoking gun will be handed to a DOL that’s aggressively pursuing FLSA cases. All it takes is one employee complaint, justified or not, to launch an investigation of your company.
Avoid wage and hour violations with BLR’s easy-to-use FLSA Wage & Hour Self-Audit Guide. Try it for 30 days … on us! Click here
The key to avoiding these problems
Get management buy-in before you audit.
How do you get it? Often, the key is defusing management’s objections in advance by doing two things:
1. Demonstrating that fixing problems now is less expensive than fixing them later, after suits and charges are filed.
2. Showing that your audit will cover all the bases and deliver meaningful results—results management can trust, and on which they can base their decisions should errors be found.
To conduct a sound audit, follow these step-by-step suggestions in BLR’s popular FLSA Wage & Hour Self-Audit Guide:
- Check your job descriptions. Be sure positions you classify as “exempt” really do fall within the administrative, executive, professional, computer, or outside sales exemptions.
- Check what employees actually do, because jobs change over time while the paperwork never seems to catch up. Modify the job descriptions until they line up with the actual work.
- Review your overtime calculations. If you owe your employees, pay up immediately. It’s likely to be a bargain compared to the cost of a settlement.
- See if your state wage and hour laws differ from the federal FLSA. The tougher standard prevails. And finally …
- Be sure you have the latest versions of FLSA-mandated posters hanging in plain sight. They’re likely to be the very first thing an inspector looks for.
In all of this, make sure that you are dealing with the latest FLSA regulations, which went into effect in 2004. There were substantial changes, and anything written before that date is hopelessly—and expensively—obsolete.
All the checklists you need to avoid overtime payment errors are in BLR’s award-winning FLSA Wage & Hour Self-Audit Guide. Try it for 30 days. Click here
Use a Prepared Self-Audit Program
It’s easy to lay out the basic steps for a self-audit, but as with most compliance issues, there are endless details. So, it’s usually best to use a prepared program to walk you through. Customers tell us that BLR’s FLSA Wage & Hour Self-Audit Guide is both effective and easy to use. It even won a publishing award in that regard. Here’s what they say they like about it:
–Plain English. Drawing on 30 years of experience in creating plain-English compliance guides, our editors have translated the FLSA’s endless legalese into understandable terms.
–Checklist-based. The book opens with a clear narrative of what FLSA is all about. That’s followed by a series of checklists that utilize a simple question-answer pattern about employee duties to find the appropriate classification.
–Complete. Many self-audit programs focus on determining exempt/nonexempt status. Ours also audits your policies and procedures, and includes questioning such practices as whether your break time and travel time are properly accounted for. Nothing falls through the cracks because the cracks are covered.
–Convenient. Our personal favorite feature: It’s a list of common job titles marked “E” or “NE” for exempt/nonexempt status. It’s a huge work-saver.
You can examine the BLR FLSA Wage & Hour Self-Audit Guide for up to 30 days at no cost or obligation. Click the link below and we’ll be glad to arrange it.
Wage and Hour Errors?
They’re easy to make when you don’t know the intricacies of the Fair Labor Standards Act (FLSA). Audit your compliance with BLR’s award-winning FLSA Wage & Hour Self-Audit Guide. All the information and checklists you need to keep FLSA trouble away. Try it at no cost for 30 days! Click here for info.