Is Your Company Prepared for a Wage and Hour Audit?

Do you know why Wage and Hour shows up at your company front door to perform an audit?  It could be for a number of reasons: from an employee complaint, a question to Wage and Hour, your company is one that pays employees who might be vulnerable to unfair pay, or many more red flags. The auditors, however, cannot disclose information on the reasons for your company’s audit - so the only ammunition you have is to be sure you are compliant in every way possible. Become familiar with the Wage and Hour Division section of the Department of Labor website, particularly Fact Sheet #44: Visits to Employers.

Below are some recommended areas to review and get familiar with:

  • Are employees classified correctly as an employee or independent contractor?
  • Are employees classified correctly as exempt or non-exempt?  Failure to pay overtime correctly is one of the most common areas auditors find non-compliance
  • Did you know reducing a salary exempt employee time for missing a partial day is a violation?
  • Did you know employees that are required to break for lunch, but continue to work MUST be paid.
  • Know the regulations for the states you company pays employees.
  • Understand what needs to be displayed on the employee’s pay stub. Be cautious entering hours on salary non-exempt employees, as this could be used as a violation of overtime due to the employee.
  • Understand on-call and travel time
  • Understand FMLA regulations

The list could be very long, but it is so worth the effort to audit the company practices than to owe back wages, penalties and fines!

To learn more about HR, Payroll, or Time & Attendance compliance, check our blog often or watch a free demo of Optimum’s HRIS Suite today!

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IS Manager Michael Fox, Lexington Center

I want to thank each of you for your assistance with our W-2 processing. I was able to balance to the penny for all employees.