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Successfully Navigated Another DOL Investigation For An Employer

A little over a year ago, an owner of a local company contacted my office. The client received a letter from the United States Department of Labor (“DOL”), who was conducting an investigation into the company’s pay practices. The client complied with the DOL’s requests and gave the DOL’s investigator the requested time and pay records. The DOL reached back out to the client to claim that employees of the company were owed in excess of $170,000.00. Shocked by that figure, the client set up a meeting with my office and hired FairLaw Firm to assist it in all future dealings with the DOL investigators.

My preference would have been for the client to have hired FairLaw Firm at the beginning – or upon receipt of the letter from the DOL – but we were beyond that point. Luckily, the client, still contacted us in time. My staff and I met with the client, spoke with others within the business, and analyzed the calculations from the DOL to determine how the DOL determined that over $170,000 in unpaid overtime wages were owed to the current and former employees. Our analysis revealed that the DOL had not calculated the precise amount owed to each employee. Instead, the DOL’s investigator simply assigned an average amount owed to each employee, regardless of the hours actually worked, and then applied that average amount to every employee for every week during the investigation period.

Unfortunately, this investigation involved a situation in which my client was not able to avoid paying any money to the DOL due to the facts. With this limitation, the client agreed that we should focus our efforts on reducing any back wages that would be owed.

My office worked closely with the client and coordinated to input every time and pay record into an Excel spreadsheet that provided teh precise amount owed to each of the current and former employees. This was not an easy task, since the client had been keeping records based on its business needs, such as billing its clients, and not for a DOL audit. After going back and forth with the DOL’s investigators, after sorting and organizing the client’s records, and after narrowing down the appropriate time period for which the DOL could actually pursue my client, FairLaw Firm successfully reduced the back wage amount from over $170,000 to approximately $10,000 (over $160,000 less in back wages).

Being the subject of a DOL audit is not where any business wants to be. The DOL has broad investigative powers that allow it to not only demand production of time and pay records, and the ability to question your employees, but it also has the ability to involve other agencies as well – including the IRS – to address situations in which an employer is not paying the appropriate amount in taxes and when an employer uses undocumented workers.

Having successfully defended employers in DOL investigations involving the payment of minimum wages or overtime pay, my recommendation is “DO NOT WAIT”. If you get a letter from the DOL – or any investigative agency for that matter – contact FairLaw Firm immediately. We will advise the DOL / investigator of our involvement, serve as an intermediary, guide and advise you through the process, and work under your direction by providing our recommendations to get the best outcome possible for you.