Want to Avoid Fair Labor Standards Act (FLSA) Problems? Do a Self-Audit

If the government is willing to go after the world’s largest store on FLSA, they’ll go after anyone. Here’s how to keep the Washington wolves from your door.

Wal-Mart has been in the news lately, and not just for having “always the low price.”

According to government allegations, Wal-Mart has also had “sometimes the low payment” to some of its workers, by denying them overtime due them under the Fair Labor Standards Act (FLSA).

In going after the world’s biggest retailer, the Department of Labor is showing a new aggressiveness on FLSA violations. In fact, as the Advisor recently reported, FLSA is now the top reason for class action employment lawsuits. What’s more, all it takes is one employee complaint, justified or not, to launch an investigation at your company.

Are you misclassifying as exempt employees who shouldn’t be, or not paying overtime when you should, even inadvertently? And would you know it if you were?

Believe us, you don’t want to find out from the government. Because that information may come with a bill for up to 3 years of back wages, plus other penalties. It’s far better to find out for yourself through an FLSA self-audit.

As outlined in BLR’s FLSA Wage & Hour Self-Audit Guide, these are the key steps:

  • 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 tasks or 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 FLSA, which is a federal law. 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.

Key to all of this is to make sure that you are dealing with the latest version of FLSA, which went into effect in 2004. There were substantial changes, and anything written before that date may be hopelessly and, for you as an employer, dangerously, obsolete.

Use a Prepared Self-Audit Program

It’s easy to lay out the basic steps for a self-audit, but as with most compliance, 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. We took a look at it and found these reasons why:

–Plain English. Once again, our editors have achieved a minor miracle in translating FLSA’s endless legalese into understandable terms.

–Step-by-Step. You’re first greeted with a clear narrative of what FLSA is all about. That’s followed by 37 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 adds checklists on your policies and procedures, questioning such things 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: A list of common job titles marked “E” or “NE” for exempt/nonexempt status. It’s a huge work saver.

Given the government’s push on wage and hour, this is a program you definitely want to check out. For, as a certain retailer might tell you, while it’s nice to have “always the low price,” when it comes to FLSA, you’ll also want “always the right answer.”

To order FLSA Wage & Hour Self-Audit Guide risk-free, click here.