Wage and hour laws are some of the most frequently violated in the construction industry. They can be hard to understand and there’s a large discretionary component in their enforcement.
Investigations are done by the Wage and Hour division of either the federal or state Department of Labor. If you get a letter seeking records to document violations of wage and hour policy, prepare for what can be an expensive result.
If an investigation finds your company in violation, the price can escalate quickly. The department has the right to go back as long as four years, locating employees who no longer even work for your company and demanding that you make the wrongs right, and also pay penalties.
Here’s how to make the least of a wage and hour investigation.
- Know the rules. Wage and hour laws can be deceptively simple but they trip up a lot of business owners. Consult with a human resources adviser and follow the rules. Most investigations are triggered by complaints. All it takes is one disgruntled employee or ex-employee who picks up the phone.
- Tread lightly. The Department of Labor has been promoting its compliance assistance program. The agency will send representatives to workplaces or business group meetings to provide seminars and answer questions. Click here for more information. But be skeptical. You don’t want to invite trouble into your building. In the end, it may be cheaper to hire a consultant who can offer a more balanced business approach.
- Play it straight. The most common violation involves putting people on the exempt payroll – which makes them ineligible for overtime – when they don’t actually qualify for exempt status. Look over your records and straighten out any misclassified employees if they exist.The second most-common violation is failure to pay for preparation, cleanup or travel time. The onus is on the employer to prove that the employee wasn’t working more than 40 hours. It’s your word against the employees.
- Be responsive. The easier you make it for the Department of Labor to inspect your records, the faster the investigation will be over. Sending a response that says, “We didn’t do it,” without supporting evidence just brings on trouble and prolongs the process. Prepare documents and send them with a well-thought-out response.Remember, inspectors are often overworked. In many areas, the Department of Labor will settle for a thorough self-analysis. If you rectify the problem and spell out the solution for the investigators, they may be satisfied and go away.
- Get Form I-9s in shape. Labor departments are under a lot of pressure to enforce immigration laws – especially now. Make sure you have the appropriate paperwork for each employee because if the Department of Labor finds anything, it may add an I-9 inspection to the list.
- Don’t roll over if you’re not guilty. The rules are not absolute, even though wage and hour officials like to make them sound that way. If you can explain the underlying rationale, the department may defer. This requires hiring a lawyer who knows the ropes, but it can save you big bucks in the long run.
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