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By: Michael S. Kun, Jeffrey H. Ruzal, and Kevin Sullivan, Epstein Becker & Green, P.C.
This checklist identifies the main risk categories for wage and hour self-audits. To avoid potentially significant liability for wage and hour violations, employers should consider wage and hour self-audits to identify and close compliance gaps.
Audits often involve the production of documents that would normally be discoverable in a federal or state Department of Labor investigation or wage and hour litigation. Consequently, you should take steps to establish and preserve the attorney-client privilege and work product, to the extent possible, from the outset of the audit.
Ensure that the employer’s policies and procedures comply with applicable federal and state law and that the employer uniformly implements them.
Confirm that the employer corrected compliance gaps identified in prior audits.
In assessing whether the employer has correctly classified employees as exempt or non-exempt for overtime purposes, consider the following:
The worker is more likely to be deemed an employee if:
In January 2018, the DOL announced its withdrawal from using the previous six-factor test for unpaid internship programs that had been used under the Obama administration. The new test, which has been adopted by the Second, Sixth, Ninth, and Eleventh Circuits, is known as the “primary beneficiary” test.
You should consider the following issues:
Your analysis should encompass the following:
You should consider the following issues concerning breastfeeding mothers:
The employer must comply with the following federal restrictions for nonagricultural jobs:
Is the employer maintaining at least the following records?
Does the employer comply with all wage and hour requirements applicable to its industry (e.g., agriculture, automobile dealers, restaurants, construction, garment, government contractors)?
Has the employer satisfied all applicable posting and notice requirements, including industry-specific requirements? Many states and cities also require employers to post certain notices advising employees of their wage and hour rights, in addition to providing employees with written notices upon hire and when the employer changes certain terms and conditions of employment (e.g., pay rate, pay day, pay period). Confirm that all such posting and notice requirements are met. See Complying with Federal Wage and Hour Poster and Notice Requirements. For state wage and hour poster requirements, see Wage and Hour State Practice Notes Chart.
Federal and state law may significantly differ in many areas and employers must generally comply with the provisions most protective to employees. You should:
Michael S. Kun is a Member of Epstein Becker & Green in the Labor and Employment practice. He is the national co-chairperson of the firm’s Wage and Hour practice group. Mr. Kun represents clients in such diverse industries as hospitality, health care, logistics, housing, and staffing services. Mr. Kun’s practice includes litigating more than 100 class actions and collective actions in California, New York, Georgia, and Maryland involving a variety of employment issues, including discrimination and wage and hour claims, and successfully defeating motions for class certification on such claims. Jeffrey H. Ruzal is in the Labor and Employment practice in the New York office of Epstein Becker & Green. Mr. Ruzal’s experience includes representing employers in employmentrelated litigation in federal courts and before administrative agencies, including representation in the defense of putative collective actions under the FLSA and class actions under the New York State Wage and Hour Law. Kevin Sullivan is an associate in the Los Angeles office of Epstein Becker & Green. He focuses his practice on employment law and litigating all forms of employment law cases, with a concentration on wage and hour class and collective actions
RESEARCH PATH: Labor & Employment > Wage and Hour > Policies and Procedures > Checklists
For additional information on worker classifications, see
> CONDUCTING AN AUDIT ON EXEMPT/NONEXEMPT EMPLOYEE CLASSIFICATIONS
RESEARCH PATH: Labor & Employment > Wage and Hour > Claims and Investigations > Practice Notes
For a discussion of best practices in conducting pay equity audits, see
> PAY EQUITY AUDITS AND BEST PRACTICES
RESEARCH PATH: Labor & Employment > Discrimination and Retaliation > EEO Laws and Protections > Practice Notes
For a detailed look at the Fair Labor Standards Act’s (FLSA) child labor restrictions, see
> NAVIGATING THE FLSA’S CHILD LABOR RESTRICTIONS
RESEARCH PATH: Labor & Employment > Wage and Hour > FLSA Requirements and Exemptions > Practice Notes
To obtain an overview of the FLSA’s records maintenance requirements, see
> UNDERSTANDING RECORDS MAINTENANCE AND RETENTION REQUIREMENTS UNDER THE FLSA
For information on the various states’ wage and hour requirements, see
> WAGE AND HOUR STATE PRACTICE NOTES CHART
RESEARCH PATH: Labor & Employment > Employment Litigation > Class and Collective Actions > Forms and Guidance
For a sample lactation break time policy, see
> LACTATION/BREASTFEEDING POLICY
RESEARCH PATH: Labor & Employment > Attendance, Leaves, and Disabilities > Attendance and Time Off > Forms and Guidanc