Her usual call, says Susan Krell, is from an employer who says, "I didn't think I was doing any- thing wrong, and now I'm   hit with a $200,000 claim." By Department of Labor estimates, says Krell, 70 percent of employers are not in compliance with the Fair Labor Standards Act.

 

Krell is a partner in the Hartford, Conn. office of Jackson Lewis, a nation- wide employment law firm. She shared her auditing tips at the recent Workplace Law Symposium sponsored by the Connecticut Business and Industry Association.

 

Why audit?

Krell notes the following in recommending an audit:

• There is a significant likelihood of violations
• There is the added danger of collective actions
• Employers need to police policies and prevent litigation
• Audits help avoid "willful'' claims which may result in liquidated damages
• The cost of an audit is a fraction of the potential liability.

 

 

Why use counsels?

Krell recommends using counsel because:

• Audit will ordinarily be protected by attorney-client privilege
• Counsel possesses extensive experience in identifying non-compliance and developing creative solutions.

 

Should you involve DOL?

Krell notes that if the audit reveals multiple or systemic violations, the employer may want to take corrective action and have impacted employees sign a release. However, such releases are usually not valid unless signed under DOL supervision.

Exercise caution and rely on the advice of an experienced intermediary before opening your doors to DOL scrutiny, Krell warns. Most common violations Krell sees the following common violations:

• Treating all salaried employees as exempt. (Just the fact that they are paid on a salary basis does not guarantee that they are exempt.)
• Classifying all employees as salaried exempt. This is never the case, says Krell
• Comp time in lieu of overtime. Even when a non-exempt employee requests comp time, you can't do it
• Misclassification, for example, classifying administrative assistants as exempt
• Failure to provide mandatory meal periods (state law)
• Improper docking of exempt employees salaries, for shortages, partial day absences, or discipline.

Off-the-clock work

Many employers get into trouble for allowing off-the-clock work. In general, hours worked'' includes all the time an employee must be:

• on duty, on the employer's premises, or at any other prescribed place of work
• · any additional time the employee is allowed to work.

 

 

Typical off-the-clock violations include the following:

• Instructed to work off-the-clock
• Invalid rounding practices
• Failure to include bonuses in over- time calculations
• Taking work home
• Working during lunch periods (watch out for automatic meal deductions)
• Performing work before or after scheduled hours
• Maintaining or washing company vehicles at home
• Get-ready and cleanup time
• Donning and doffing time
• Taking or returning materials or equipment before and at the end of the workday
• Travel from worksite to worksite
• Mandatory attendance at meetings, lectures, and training programs out- side the employee's working hours
• Workday longer than employee's scheduled hours or time at the work station
• Attendance at meetings, lectures, and training programs which fall within the employee's regular working hours
• On-call time when employees must remain on the employer's premises or so close thereto that they cannot use the time effectively for their own purposes.

Conclusion

Any one of these fairly common practices could cost your organization dearly.

Consider an audit to ferret out dangerous practices before the DOL does.