When DOL Knocks on Company Doors: Open With an Action Plan

As current headlines have shown, many companies have paid out millions of dollars in judgments or settlements for overtime violations under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq. In such lawsuits, in addition to recovering unpaid overtime for up to three years, plaintiffs often can recover liquidated damages for willful violations. Further, the FLSA mandates that the employer pay the prevailing plaintiffs’ attorneys’ fees.

A clear action plan before a DOL investigation can avoid protracted litigation and expensive damage awards. As further explained below, an action plan should include: (1) Strategy sessions and a self-audit with an attorney; (2) Review of I-9 forms, payroll and timekeeping records, personnel policies and job descriptions; (3) Management meetings on how to approach the DOL investigation; and (4) Implementing damage control. See full article here.

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Prevent Misclassification Under the FLSA

At first glance hiring all ICs seems financially savvy. Companies can avoid withholding and paying certain taxes. ICs need not be provided medical benefits, retirement, paid vacations or holidays. No overtime needs to be paid. No unemployment claims can be made against the company. Simply calling a worker an independent contractor, even in writing, will not automatically avoid FLSA violations.

Before a company dreams of converting all its employees to ICs, it needs to be aware of expensive consequences under the Fair Labor Standards Act of 1938 (FLSA). See full article here.