When Should an Employer Conduct an FLSA Audit?
Preparation for Labor Negotiations
Part of an employer's preparations for labor negotiations should involve an FLSA analysis of collective bargaining agreements and pay policies. Using the collective bargaining process to bring payroll practices into compliance with FLSA requirements can enable an employer to make appropriate changes without generating undue concern.
Revisions to Personnel Rules, Municipal Code or Charter
Portions of an employer's personnel rules, municipal code and charter provisions invariably affect how an employer compensates its employees. As a result, whenever an employer revises its rules, municipal code or charter, the employer should also conduct a FLSA compliance review to eliminate provisions that may conflict with FLSA requirements.
Whenever an employer creates or modifies a classification, the job duties should be reviewed to determine whether that classification performs duties that qualify for one of the white collar exemptions from the FLSA overtime requirements.
Response to Grievances or Complaints
Employees generally file FLSA lawsuits in response to an underlying labor dispute or a disciplinary action. Thus, an employer is well advised to promptly investigate any grievance or complaint that even remotely infers that the employer's pay practices violate the FLSA. The employer's failure to investigate could preclude the employer from asserting a good faith defense in the event of litigation.
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