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Employer’s Guide: How Do You Defend Against a Department of Labor (DOL) Investigation?

  • By: lipplaw
    Published: February 5, 2024

Employers can do 5 things to strengthen their defense against a Department of Labor (DOL) investigation:

1. Educate Yourself on the Investigative Process
2. Audit Your Internal Employment Practices
3. Maintain Correct Records
4. Provide Training to Employees
5. Engage Experienced Legal Counsel

By doing these five things, an employer can have a strong defense against a DOL investigation and reduce its legal liability.

1. Educate Yourself on the Investigative Process

DOL investigations are conducted by the Wage and Hour Division (WHD) of the Department of Labor. The WHD is responsible for enforcing employment laws such as the Fair Labor Standards Act (FLSA), which is the federal law that most employers are subject to, requiring them to pay overtime for non-exempt employees, pay employees minimum wage, and maintain certain payroll and employee records. Many DOL investigations involve enforcement of the Fair Labor Standards Act (FLSA).

Powers of the Department of Labor in an Investigation

Under the Fair Labor Standards Act, the DOL may do the following in an investigation (29 U.S.C. Section 211(a)):

  • Investigate and gather data regarding the wages, hours, and other conditions and practices of employment,
  • Enter and inspect a place of business and its records, and make copies of the records
  • Question employees
  • Investigate facts, conditions, practices, or matters as it deems necessary or appropriate to determine if a violation has occurred.

Steps of a Department of Labor Investigation

The following steps occur in a DOL investigation:

  • The investigator introduces themselves and provides official credentials.
  • The investigator describes the process and what records must be produced by the company.
  • The investigator reviews the company’s records to determine what employment laws (or exemptions) are applicable.
  • The investigator interviews employees privately to determine what their duties entail and decide what legal exemptions may apply to them.
  • After the fact-finding process is complete, the investigator meets with the employer or the employer’s attorney or representative to determine what corrective action must be taken if violations are found. Some common types of corrective action are back wages for overtime or minimum wage violations and penalties.
  • The company has the opportunity to provide defensive facts for the investigator to consider if there are violations.

What Records Can the Department of Labor Request in an Investigation?

  • Payroll records
  • Timesheets and timekeeping records
  • Any other business records that the DOL deems necessary or appropriate to decide whether violations exist.

2. Audit Your Internal Employment Practices

If you are faced with a DOL investigation, you should conduct an internal audit of your pay practices with the assistance of an employment lawyer. An employment lawyer can review your employees’ job duties for the various roles at your business and determine whether any exemptions apply to your employees’ positions under the Fair Labor Standards Act. If an employee is exempt under the Fair Labor Standards Act, then a company is not required to pay an employee overtime.

An employment lawyer can also review your timekeeping practices to ensure you are following applicable law. For example, Virginia companies are required to state an employee’s hours worked on each paycheck. Even though this is a state law, you will want to make sure you are complying with all applicable employment laws for your business to avoid future legal liability.

3. Maintain Correct Records

Many employers do not properly maintain employment records, and in doing so, are violating employment laws and exposing themselves to unnecessary risk. For each position at your company, you should have a corresponding job description that outlines the duties for the particular role. This allows you to enforce expectations for your employees and also allows you to properly classify employees as exempt or non-exempt under the Fair Labor Standards Act.

Your company should track the hours worked by each employee. Many overtime lawsuits are filed because an employee kept their own records of their hours worked, and the employer did not, leaving the employer defenseless in the lawsuit against the employee’s claims. While it can be time-consuming tracking employees’ hours worked, it can help you avoid lawsuits, legal fees, and numerous headaches in the future.

4. Provide Training to Employees

Managers should know which employees are exempt and which are non-exempt under the Fair Labor Standards Act, so that they can communicate this to employees. Managers should also be trained on proper timekeeping procedures, and on the legal liabilities associated with failing to follow applicable employment laws.

Employees should be aware of their exempt or non-exempt status, whichever is applicable to their role. By providing employees with this knowledge, and keeping managers in the know, everyone will be on the same page, which is a large step to protecting your company from legal liability. Managers and employees should also receive training on workplace law compliance so that you can maintain a safe workplace where employees are respected and protected.

5. Engage Experienced Legal Counsel

Each business owner must decide whether they are willing to incur the expense of hiring a lawyer to represent them. A DOL investigation is not the time to cut corners on legal expenses, because having an experienced lawyer at your side will protect your business, your reputation, and may save you from penalties and fines.

Can a Company Have Legal Representation During a DOL Investigation?

Yes, a company can have a lawyer represent them during any part of the DOL investigation process. Engaging experienced employment law counsel is crucial if your company is being investigated by the DOL, because the damages for FLSA and other employment law violations can be very high.

If your company is subject to a DOL investigation, Lipp Law’s legal team can help protect your business. Contact Lipp Law today.


Kathryn Megan Lipp

Katie dedicates her practice to employment separation guidance.
Based on her successful employment litigation practice...Read More