1. T
he U.S. Department of Labor
(DOL) recently announced
the launch of its first iPhone
application — a time-tracking app
to help employees independently track
the hours they work and calculate the
wages they’re owed. The application is the
latest offering in the DOL’s “We can help”
initiative, a campaign to foster openness
and transparency to workers about their
compensation rights.
With the overwhelming majority of
human resources-related legal actions
now related to wage and hour complaints,
this new app heightens the burden of
proof for employers to show that they are
accurately capturing time worked and
compensating workers in accordance with
the Fair Labor Standards Act (FLSA).
ProactiVe Protection
AgAinST WAge & HOUr AUDiTS
Violations of federal wage and hour provisions are arguably
the single largest liability exposure for employers today.
Here are some steps to help limit that exposure.

2. Non-compliant? You’ve got a misclassified employee gains in the
plenty of company event of a lawsuit, thanks to tools like the
DOL statistics show that more than 80% DOL smartphone app. in the absence of
of employers are out of compliance with company records, the court is likely to rely
federal and state wage and hour laws. And on the employee’s self-kept timesheets in
] ]
penalties can be costly, to say the least. calculating back wages owed.
Current penalties for FLSA
violations include payment of
The burden is attorneys’ fees and court costs,
plus double back wages —
now on employers extending as far back as
to demonstrate three years in the event of a
willful violation.
compliance, not on Making the fight against “wage
the DOL to catch theft” a departmental priority,
the DOL has stepped up its
them in a violation. investigation of complaints. U.S.
Secretary of Labor Hilda Solis puts
For example, consider an employee it in plain terms: “Make no mistake, the
who has been misclassified as exempt DOL is back in the enforcement business.”
from overtime. Under the FLSA, tracking The DOL increased its total number of
the hours worked by exempt employees is investigators by 30% in 2010, with plans to
not required. But imagine the advantage add 90 more this year.
DiD yOU
• Wage and hour class actions now outnumber all
other discrimination class actions combined, with
knOW…
settlements averaging $23.5 million at the federal
level and $24.4 million at the state level.
• 83% of the class/collective action lawsuits filed
in federal or state courts in 2009 were wage and
hour-related complaints.
• non-government wage and hour settlements in
2009 grew 44% over 2008.
• Settlements for the top 10 federal wage and hour
lawsuits increased from $253 million in 2008 to
$364 million in 2009.
Source: The Compliance Wire (blog.workforcelogic.com)

3. The DOL also unveiled a new • examining job descriptions to determine
“Plan/Prevent/Protect” enforcement whether they remain accurate and reflect
strategy that will require employers to the skills necessary to perform the job.
be proactive in finding and remedying • Assessing actual job duties to ensure
violations before an investigator arrives at that various roles fall within the stated
the work site. employers will have to create exemptions for overtime pay.
a plan for identifying and remediating • Checking your process for calculation
risks of legal violations and other risks to of overtime, including bonuses and
workers; implement the plan in a manner shift differentials.
that prevents legal violations; and ensure
that the plan’s objectives are met on a Pay any past overtime uncovered
regular basis. 2 by your internal audit. Paying your
workers what they’re owed now
Preparing for a DOL audit will be far less expensive than paying a DOL
The number of audits conducted by the settlement later.
federal DOL and state-equivalent agencies
on employers’ wage and hour practices is Analyze your state’s wage and hour
increasing by the day. Audits are generally
triggered when a current or former
3 laws to determine if they conflict
with federal law. in the event
employee files a complaint with the DOL, of a conflict, follow the law that is most
or when the DOL targets a specific industry beneficial to your employees.
for investigation.
Before the DOL demands to see your During your internal audit, assign
records, you should take the time to
conduct an internal examination of your
4 a point person who is fluent in the
language and regulations of the
timekeeping and recordkeeping practices. FLSA. if you are ever audited by the DOL,
When managed effectively, an advance this person — an internal Hr expert, legal
internal examination of your recordkeeping counsel or other trusted advisor — should
processes gives you the opportunity to serve as the main contact between your
review, analyze and make improvements to organization and the auditors.
ensure compliance.
There are several steps your Violations of the FLSA’s wage and hour
organization can take to emerge from an provisions are perhaps the single largest
internal review stronger than ever, and liability faced by today’s employers. By
confident should the DOL ever audit your following approved procedures, maintaining
organization: detailed records, and making compliance
your top goal, you can limit your exposure
Conduct an advance internal audit and protect your organization against future
1 in alignment with the DOL’s “Plan/
Prevent/Protect” strategy. Discover
wage and hour claims. n
any misclassifications by:

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