The Fair Labor Standards Act, or FLSA, sets standards for full and part-time employees related to minimum wage record keeping, youth employment and overtime pay. The Department of Labor’s Wage and Hour Division enforces FLSA and has the power to investigate the practices, policies and procedure of employers and interview employees to determine whether every aspect of their business is compliant.
Because the FLSA can be complicated to apply and is considered highly subjective, many employers are using audits to ensure they follow this important law. Failure to comply can result in thousands of dollars in fines and well as back wages. A single-plaintiff FLSA lawsuit could cost six figures. However, many of these cases are brought as collective actions by large groups of employees, which means they can be very costly.
FLSA Compliance Audit Services From Smart HR
Here is a look at our FLSA compliance audit offerings.
FLSA Position Audits
Position audits for the FLSA look at the positions paid on a salary basis within your organization that are designated as FLSA-exempt. Although most salaried employees are considered exempt, there are some important exceptions that you need to be aware of. We will review and analyze the responsibilities and duties of exempt employees and provide you with recommendations on correcting any positions that are not properly classified.
FLSA Compliance Audits
The most common type of FLSA audit we carry out is a compliance audit. This entails reviewing all your documentation, policies, practices and procedures to ensure that you are fully compliant.
We will thoroughly review the main components of FLSA, including:
- Minimum wage
- Overtime pay
- Youth employment standards
- Record keeping, including payroll records related to:
- Time cards
- Work schedules
- Daily and weekly regular wages
- Weekly overtime wages
- Hourly pay rates
- Wage deductions and additions
We will also take a closer look at the following areas:
- An organizational overview of the managerial roles and reporting relationships of the positions we assess
- Current job descriptions and existing classifications for defined roles
- The compensation levels for all roles within the organization, including salary, bonuses and commissions
- The reasons for the audit, including any past or present official audits by the Department of Labor
Our team will provide you with an in-depth analysis and advice on correcting any areas of noncompliance that we identify.
The Benefits of FLSA Audits from Smart HR
Your organization can benefit in the several ways from conducting regular internal FLSA audits, including:
- Preventing penalties for noncompliance, which could include damages, back wages and legal fees
- Ensuring that employees you consider exempt officially meet the criteria
- Reducing the chances that your employees will file complaints with the Wage and Hour Division
- Avoiding lawsuits filed against your organization on behalf of employees who were subjected to violations while employed by you
Reach Out to Smart HR
At Smart HR, our experienced team of human resources professionals is committed to providing employers with proactive, solutions-oriented services. Get in touch to find out more about how our FLSA audits can help you ensure your business is fully compliant.