How an FLSA Audit Can Help Protect Employers from Liability

With minimum wage requirements, overtime rules, record-keeping regulations, and youth employment standards, the Fair Labor Standards Act (FLSA) regulates many aspects of an employer-employee relationship.  Employers must ensure that they are in full compliance with this law.

Failure to do so could result in a company facing significant liability in the future. The good news is that with a proactive approach, employers can dramatically reduce their risk of facing a legal claim or regulatory sanctions. Here, our Florida wage and hour lawyers explain the benefits of an FLSA audit and the key issues that will be considered.

FLSA Audits: Five Part Checklist 

In recent years, wage and hour claims have been on the rise. The core purpose of a preemptive FLSA audit is to ensure that employers can identify and correct any potential violations at the earliest possible stage—ideally before they ever occur. By doing so, they can not only reduce their risk of facing a class or DOL sanctions, but they also may be able to raise a “good faith” defense should certain cases arise in the future. In a comprehensive FLSA audit, an attorney will assess:

1. Overtime Exempt Classifications: South Florida employers should regularly review their positions classified as “overtime exempt” for the purposes of the FLSA. If an employee is misclassified, an employer could face significant liability for failure to pay overtime wages—potentially liquidated damages.
2. Record-Keeping Policies: Under the FLSA, employers must properly and accurately record the hours worked by non-exempt employees. When is the last time your company reviewed its record-keeping procedures? It is an issue that will be addressed in a comprehensive FLSA audit.
3. Rate-of-Pay (ROP) Calculations: The FLSA requires employers to pay non exempt employees time and half (1.5x) for their overtime hours. Make sure your company is properly calculating the rate of pay for all non-exempt workers.
4. Non-Employee Workforce: If your company relies, at least in part, on non-employee contributions (independent contractors), it is imperative that you ensure that this workforce is properly classified for the purposes of federal law.
5. State and Local Regulations: Of course, the FLSA is not the only relevant wage and hour law. During an FLSA compliance audit, an employment lawyer can also consider other applicable federal, state, and local labor regulations.

A proper FLSA audit should always be customized to meet the unique needs of the client. Every business is different. An experienced wage and hour lawyer will be able to review your company’s policies and procedures to make sure that it is complete compliance with the requirements of the FLSA.

Call Our South Florida Wage and Hour Attorneys for Immediate Assistance

At Pike & Lustig, LLP, our West Palm Beach employment attorneys are committed to providing proactive and solutions-oriented representation to employers. If your company or organization is interested in an FLSA audit, we can help. To set up a confidential consultation with an experienced wage and hour lawyer, please contact us today. Our law firm serves employers throughout Southeastern Florida, including in Miami, West Palm Beach, and beyond.

Resource:

dol.gov/agencies/whd/flsa

https://www.turnpikelaw.com/flsa-watch-u-s-department-of-labor-published-three-new-wage-and-hour-guidance-letters/