May 18, 2023

The mere mention of a Department of Labor (DOL) audit can cause employers stress. The thought of meticulous inspections, paperwork scrutiny, and potential penalties can understandably raise anxiety levels. But a DOL audit doesn’t have to be a nightmare-inducing experience.

We’re here to calm your fears and shed light on the DOL audit process, providing you with a roadmap to navigate it confidently. Understanding what to expect and how to prepare can transform this seemingly daunting endeavor into an opportunity for growth, compliance, and operational improvement.

We’ll dive into the key aspects of DOL audits and equip you with practical strategies to ensure a smooth audit experience. From preparation tips to best practices during the audit, we’ll guide you every step of the way.

Rather than viewing a DOL audit as a threat, consider it an opportunity to fine-tune your policies, strengthen your practices, and showcase your commitment to fair employment practices and regulatory adherence.

So, take a deep breath, and let’s demystify the world of DOL audits!

What triggers a DOL audit?

The DOL may conduct audits of employers to ensure compliance with labor laws and regulations. While the reasons for a DOL audit may vary, common triggers include:

  • Reported complaints or violations: Employee complaints of labor laws such as wage and hour violations, discrimination, or unsafe working conditions, could trigger an audit.
  • Targeted industry or geographic focus: Specific industries or geographic regions are known for issues like high violation rates, prevailing wage concerns, or enforcement priorities. For example, food service, healthcare, and hospitality businesses are often targeted because of historically low wages and hour violations.
  • Random selection: In some cases, the DOL may select employers for audit randomly to ensure a broad range of compliance enforcement across various industries.

What should we expect from a DOL audit?

So, you’ve been notified that your business is the lucky winner! Don’t sweat it. Here’s how the DOL audit process typically goes:

1. Notification

You will typically receive a written notice or letter from the DOL notifying you about the audit, its purpose, and the information and records you need to provide. 

Pro Tips: 

  • You’ll likely receive short notice, but you can request more time to gather the necessary records. The auditor will decide whether or not to grant your request.
  • Ask the auditor what they will investigate (e.g., hour and/or wage compliance, employee classification, etc.), the date range for records they wish to review, and which employees they plan to interview. Again, the auditor will decide whether to provide additional information.

2. Onsite Visit

DOL auditors usually visit the employer’s premises to review records, policies, and procedures; interview employees; and gather information relevant to the audit.

3. Record Examination

A DOL auditor will request various records and documents depending on the focus of the investigation. This includes but is not limited to payroll records, timekeeping records, employment contracts, wage rates, employee classifications, benefits information, and safety records.

4. Interviews

DOL auditors may interview employees to gather information and assess your organization’s compliance with labor laws and regulations.

5. Compliance Review

The auditors will review your company’s practices and policies to ensure compliance with applicable laws, such as the Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), Occupational Safety and Health Act (OSHA), and other relevant regulations.

6. Findings & Recommendations

Following the audit, the DOL will provide the employer with findings and recommendations, which may include suggested corrective actions to address any identified violations or areas of non-compliance. 

How can we help the process go smoothly?

During the DOL audit, you can take the following steps to ensure a seamless process: 

1. Designate a point of contact

Designate an internal point of contact to liaise with the DOL auditors and coordinate the audit process and interviews. This person should know the organization’s policies, practices, and recordkeeping. Good candidates are often your attorney or a senior manager.

2. Cooperate and be responsive

Respond promptly and thoroughly to all requests for information and records from the DOL auditors. Cooperate with the auditors during their onsite visits and provide them with the necessary facilities and personnel.

Pro Tip: Give the auditor a quiet space to conduct their investigation and employee interviews privately. 

3. Maintain open communication

Maintain open and professional communication with the auditors. Address any questions or concerns they may have, and provide clarifications or additional information when necessary.

4. Document interactions and findings

Record all interactions with the auditors, including notes on discussions, requests, and information provided. This documentation can be valuable for reference and future follow-up if needed.

Pro Tip: ONLY provide the auditor with the documents they request.

5. Seek legal counsel

If complex legal issues arise during the audit or if there are concerns about potential violations, seek legal counsel to provide guidance and representation.

Remember that each DOL audit may have specific requirements and processes, so it is essential to consult legal professionals with expertise in labor law compliance to ensure proper preparation and adherence to the audit process.

How can we stay prepared for a DOL audit year-round?

Follow these proactive steps to keep your company compliant and ready for a DOL audit at the drop of a hat!

Conduct an internal audit

Review your organization’s policies, procedures, and practices to ensure compliance with relevant labor laws and regulations. Identify areas where potential violations may exist and take corrective action in advance, if possible.

Your internal audit should also include reviewing and updating all job descriptions, wages for each role, and the reason for each pay rate.

Pro Tip: Although employee handbooks and job descriptions aren’t legally required, creating and keeping them updated is best practice. Both can also demonstrate that your company treats and compensates all employees fairly.

Organize and maintain accurate records

Ensure that all required records, such as payroll, timekeeping, employment contracts, and safety documentation, are accurate, complete, and well-organized. This includes maintaining historical records for the appropriate time periods as required by law. For example, payroll records must be kept for at least three years. Check the labor laws in your state, as these can vary!

Educate management and staff

Train managers and staff on labor laws and regulations, including topics such as wage and hour requirements, employee classification, discrimination and harassment prevention, and safety regulations. Well-informed employees can help ensure compliance and proper documentation.

Seek legal counsel

Yep, it’s on here again! You should have your legal counsel review your policies, practices, and recordkeeping procedures regularly or whenever you make changes. They can help ensure compliance with new or updated policies and practices and help prepare for a potential audit.

Remain ready and don’t stress a DOL audit!

While a DOL audit may initially instill anxiety, arming your team with the right knowledge and preparation makes it a manageable process. Now, you understand the critical aspects of DOL audits and have valuable insights to calm your fears and navigate the journey easily.

By reviewing your policies, organizing records, and educating your team, you can proactively prepare for a DOL audit. Conducting internal audits and seeking legal counsel ensures you’re on the right track. During the audit, maintain open communication, cooperate fully, and document interactions for future reference.

Remember, a DOL audit is an opportunity for growth and improvement. It allows you to showcase your commitment to compliance and fair employment practices. Use this time to fine-tune your policies, address any potential issues, and demonstrate your dedication to the well-being of your employees.

Do you have additional questions about DOL audits or need guidance in labor law compliance? Contact BlueLion today at 603-818-4131 or to learn how our diverse HR specialists can help you protect and prepare your business!

The information on this website, including its newsletters, is not, nor is it intended to be legal advice. You should contact an attorney or HR specialist for advice on your individual situation.