“3 Tips For Handling A DOL Wage And Hour Probe”
Law360, February 9, 2021
By Mike LaSusa
President Joe Biden has promised his administration will aggressively enforce federal wage and hour laws and regulations, and that means employers need to be ready if the U.S. Department of Labor comes knocking, experts told Law360.
The best thing employers can do is try to stay on the straight and narrow, said Paul DeCamp, a partner at employer-side firm Epstein Becker Green who served as administrator of the DOL’s Wage and Hour Division under former President George W. Bush.
“Employers should do their level best to make sure they’re complying with the laws,” he said. “An ounce of prevention is worth a pound of cure.”
The DOL’s Wage and Hour Division doesn’t always wait for an allegation of wrongdoing before starting an investigation, and “very few employers get to 100% compliance, including the Department of Labor itself,” DeCamp said.
Here, Law360 takes a look at some best practices employers can follow if they find themselves caught up in a wage and hour probe.
Don’t Wait To Be Told What’s Wrong (Or Right)
It’s important for employers to periodically review their wage and hour policies and practices. This kind of “self-audit” can uncover problems and allow for a course correction without the time and expense that comes with a DOL investigation, said Jay Dade, a shareholder at management-side firm Polsinelli PC.
Even if an employer doesn’t catch every potential wage and hour issue, demonstrating a willingness to stay on the right side of the law can make a difference in how the DOL views any violations it happens to find, Dade said.
“If you have been making good faith efforts to be in compliance — good faith being very key — that could impact the civil money penalty portion that the investigator seeks to levy against the employer,” he said.
The Polsinelli partner recommends that employers affected by the COVID-19 pandemic double-check policies surrounding wage and hour issues like timekeeping and expense reimbursement for employees who are working remotely.
“I think investigators are going to be much more finely tuned to the remote working-from-home issue because of the pandemic,” Dade said. “I think that will be a much more regular part of a wage and hour audit going forward.”
Worker advocate Bryan Schwartz of Bryan Schwartz Law said employers should be particularly cautious as the Biden administration looks to roll back some major wage and hour policy changes implemented during the administration of former President Donald Trump.
“Many windows that employers saw for evading decades-old interpretations of wage and hour laws are being firmly shut, so they should absolutely be taking a hard look,” he said.
Don’t Treat Investigators As Enemies
While it’s not usually a good sign for a business when a government investigator shows up, establishing a cooperative relationship up front can help a DOL probe go more smoothly for both sides, attorneys said.
“They’re not your friend … but they’re not your enemy either,” Dade said. “The auditors I’ve encountered, I have found to be professional. They have a job to do.”
One of the best ways to show a willingness to cooperate is to be responsive to investigators’ requests for information, Epstein Becker’s DeCamp said. This is especially important during pandemic times, when remote work can complicate timely communication, the former Wage and Hour Division administrator added.
“If the investigator thinks you’re getting in the way, that’s when they start to bring out the big guns,” he said. “Then the investigator has to go to more aggressive measures like issuing subpoenas and otherwise expanding the investigation.”
Employers should be cautious about directly approaching the DOL if they feel an investigator has overstepped their authority. It’s typically better to talk to an attorney who has experience dealing with the agency, DeCamp said.
“Sometimes just picking up the phone and having a conversation with the investigator’s boss can be a helpful thing to do,” he said. “At the same time, that can also backfire if you as the employer are making an outreach like that that’s unfounded.”
Workers should also cooperate with DOL investigators who want to interview them as part of a wage and hour probe, said Summer Murshid, a plaintiffs attorney at Hawks Quindel SC and a member of the board of the National Employment Lawyers Association.
Murshid advises workers to be honest about what they know and what they don’t, and she said it’s a good idea to take notes. Additionally, it’s important for workers to know their rights.
“Having discussions in a wage investigation is a protected activity,” Murshid said.
Do Prepare For a Sequel
After an investigator concludes a probe, employers can challenge the findings and any penalties that might be assessed through an internal DOL appeals process.
“That investigator’s report is not the end-all, be-all,” Dade said. “If you have a good faith reason to believe the law supports your position on the facts, then I recommend litigating that as far as you can possibly go.”
Even once any appeals are over, employers shouldn’t assume they’ve seen the last of the DOL’s enforcement arm. The Wage and Hour Division makes a point of revisiting employers after investigations conclude, according to DeCamp.
“Be aware that you’re likely to see the investigator or someone else from the agency in the relatively near future,” he cautioned.
It’s easier for the DOL to argue that a violation is willful if the agency has already cited an employer for the same issue in a previous investigation. And a finding of willfulness can come with criminal penalties, so it’s important to promptly correct any issues identified during an investigation, DeCamp said.
“If you don’t take to heart the message from an investigation and fall back into the same bad habits, or start to get sloppy with your wage and hour practices after an investigation, that’s really going to look bad and put you into a different category in a subsequent investigation,” he said.
Schwartz said worker advocates would also be likely to take on a potential client who alleges wage and hour violations at an employer that has previously been investigated by the DOL for similar issues.
“That would be a great case to take for anyone who represents victims of wage theft,” he said. “All their go-to defenses are out the window at that point.”
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