Unlike the lottery, you generally don’t want the U.S. Department of Labor (DOL) to pick your number for a workplace audit or investigation. However, a DOL visit may be unavoidable. Over the past five years, the number of DOL-initiated investigations has increased by 35 percent, and the DOL has a 75 percent violation rate in connection with those investigations. In addition, in fiscal year 2014, following its investigations, the department determined that employers owed more than $240 million in back wages. Those statistics are certainly interesting, but they are hardly comforting for employers. So what can you do? As the saying goes, “The best defense is a good offense.” Know what to expect from and how to prepare for a visit from the DOL. 
Why me?
There are four ways you could be selected for an audit or investigation. First, a former or current employee could lodge a complaint with the DOL that leads to an investigation. Second, the DOL may conduct a “directed investigation” on its own initiative, meaning it selects or targets specific businesses or industries to audit for compliance. Third, you could be randomly selected for an audit. Fourth, the DOL may conduct an audit following an investigation.
Most often, the DOL will not indicate why an employer has been selected for an investigation or audit, and in the grand scheme of things, it really does not matter. The department has the authority to investigate all areas for which it is responsible (e.g., minimum wage, overtime, worker classification, record keeping, and child labor). It does not need―nor is it likely―to focus solely on a specific complaint made by an employee. Therefore, employers should not focus on the question of “why me?” Instead, focus on how to best present your company and explain its policies, practices, and procedures during a DOL visit.
What to expect
So you have received notice of an impending visit from the DOL (or, in unusual cases, experienced an unannounced visit). The unknown can be quite scary. Let’s take away a bit of that fear. What exactly can you expect from a DOL visit?
At the outset, the DOL investigator will have an “opening conference” with the employer and explain the purpose of and procedure for the investigation. Then, the investigator will review the information, data, and documents that were requested in the notice announcing the DOL’s visit. Typically, that information will include financial records confirming the employer’s coverage by the Fair Labor Standards Act (FLSA), time cards, payroll information, nonexempt/exempt classifications, job descriptions, child labor documentation, and independent contractor records.
The investigator will likely take a tour of the workplace and conduct interviews with employees. Afterward, he will schedule a “closing conference,” usually weeks following the initial visit. At that point, the investigator will reveal his findings, inform the employer of any violations, and provide instructions on compliance measures. If violations are found, he will indicate whether back wages are owed and whether penalties will be assessed, and he may request that specific corrective actions be implemented.
How to respond
When considering how to respond to a DOL audit or investigation, there is a fairly simple list of do’s and don’ts.
Do:
- Involve your accountant or attorney as soon as possible.
- Before the investigator arrives, conduct your own self-audit, review your records and policies, and ensure your workplace posters are current and displayed appropriately. Consider whether the documents or records to be provided to the investigator require explanation, and prepare accordingly.
- Do your best to develop a rapport with the investigator at the outset.
- Establish your credibility early, and fully explain your commitment to complying with the law.
- Be cooperative and courteous.
- Designate a private space for the investigator.
- Select an individual to serve as the contact person with the investigator.
- Label your organizational information “confidential” or “proprietary” if appropriate.
- Keep full copies of all materials provided to the investigator.
- Maintain detailed notes of the investigator’s statements and conduct during the visit.
- Accompany the investigator on any tours of your workplace.
- Explain to employees who are selected for interviews that their presence is voluntary. Also, explain that:
- They are not required to provide a written statement.
- They may ask to take breaks as needed.
- They may ask to review documents that are the subject of the investigator’s questions.
- They should tell the truth.
- They should listen carefully and make sure they fully understand the questions.
- They should not guess or speculate.
- It is OK to say, “I don’t know.”
- Insist on having a representative present during any manager-level employee interviews.
- Ask the investigator to meet with you at the end of each day to provide a summary of where things stand from her perspective.
Don’t:
- Be angry, defensive, confrontational, argumentative, or obstinate;
- Volunteer information or provide more information than is requested or necessary;
- Agree with any noted violations or make any admissions;
- Immediately agree to a request to pay back wages; or
- Sign anything.
What if violations are found?
There are several steps you should take if the investigator informs you that she has found violations. First, ask detailed questions so you fully understand the basis for the investigator’s findings. Second, request documentation that fully explains the calculations of claimed back wages and penalties. At this time, do not indicate that you agree with the findings or promise to pay the amount the DOL claims is owed. Instead, ask for time to fully review the findings and perhaps submit additional information for the investigator to consider. Afterward, determine whether you should agree with the findings and pay the penalties or back wages, challenge the findings and attempt to negotiate a lesser amount, or formally contest the findings and defend yourself in possible legal action.
Be proactive
Do not wait for the DOL to come knocking at your door. Ensure that your policies, procedures, 
and practices are legally compliant by conducting periodic internal reviews. Train staff so problematic issues can be spotted and resolved earlier rather than later. Finally, prepare your employees, and put in place a comprehensive plan of what to do if the DOL visits your workplace. As we noted earlier, your best defense to a DOL audit or investigation is a good offense.
Amy M. McLaughlin is an attorney with Dinse, Knapp & McAndrew, P.C. in Burlington, Vermont. She may be contacted at amclaughlin@dinse.com.