Resources to help employers and their counsel conduct wage and hour audits.
The Department of Labor continues to aggressively enforce the FLSA, and the plaintiff's bar remains aggressive in filing class and collective actions alleging violations of the FLSA and state wage and hour laws. Employers defending these actions face potentially significant legal and financial liability. For example, in 2012, one employer paid $99 million to settle a case involving allegations that employees were misclassified as exempt from overtime pay. Given the potential for significant liability, employers should consider reviewing their internal wage and hour practices to:
Ensure compliance with the FLSA and state wage and hour laws.
Employers may evaluate several different issues during an internal wage and hour audit, depending on a variety of factors, such as the employer's industry, the type of workers employed and the reason for the audit. Common areas of review, however, include:
Classification of workers as:
exempt or nonexempt employees under the FLSA and state wage and hour laws; and
employees covered by the FLSA and state wage and hour laws or other types of workers not covered, such as independent contractors, interns, volunteers or trainees.
Designation of time as compensable or noncompensable.
Calculation of overtime pay.
Meal and rest breaks.
Child labor practices.
Timekeeping and recordkeeping practices.
Payroll practices.
Practical Law Company has several resources that help employers and their counsel understand the requirements and obligations imposed on employers by the FLSA and state wage and hour laws and how to comply with those requirements and obligations. For more information, see the following resources: