Receiving a notice from the U.S. Department of Labor (DOL) Wage and Hour Division can be unsettling for any employer. While some audits are routine, others can quickly expand into broader investigations and, in some cases, lead to private lawsuits under the Fair Labor Standards Act (FLSA).
How you respond in the early stages of a DOL wage and hour audit can significantly affect the ultimate outcome of the investigation.
Here’s what employers should do if they receive a wage and hour audit notice:
1. Take the Audit Seriously and Act Promptly
DOL audits usually come with deadlines for producing payroll records, timekeeping data, and employee information. Missing deadlines or providing incomplete responses can increase scrutiny and prolong the investigation. Upon receiving an audit notice, employers should immediately:
- Calendar all response deadlines
- Identify a single internal point person to coordinate the response
- Preserve all payroll, timekeeping, and classification records
2. Be Professional and Cooperative
An adversarial or dismissive tone can escalate an audit and invite closer scrutiny. Professional, organized responses help keep the audit on track while limiting unnecessary expansion of the investigation. However …
3. Do Not Volunteer More Information Than Requested
The DOL will typically request specific categories of records. Providing additional documents or informal explanations can unintentionally broaden the scope of the audit. Avoid:
- Offering narratives before reviewing their own records
- Submitting documents that were not requested
- Allowing supervisors to provide informal explanations to investigators
4. Consider Involving Legal Counsel Before Producing Records
Many employers wait to involve counsel until after the DOL has issued findings. By then, it may be too late to control how issues are framed or whether the investigation expands. Early legal review can help employers:
- Identify potential classification or pay practice risks before submission
- Ensure responses are accurate and consistent
- Minimize the risk of retaliation claims
- Prepare for potential employee interviews
- Evaluate whether proactive corrective steps are appropriate
In some cases, strategic corrections made early can reduce liability or prevent future claims.
5. Understand What the DOL Is Investigating – and Why It Matters
While each audit is different, many are triggered by employee complaints or industry-wide enforcement initiatives. Common areas of focus include:
- Independent contractor versus employee classification
- Overtime exemptions (executive, administrative, professional)
- Time-keeping practices and off-the-clock work
- Bonus and commission calculations affecting overtime
- Improper deductions
An audit that begins with a single employee can easily expand. Understanding the DOL’s common focus areas allows employers to assess potential exposure early and prepare for follow-up DOL requests.
6. Know That DOL Audits Can Lead to Private Lawsuits
Even if the DOL does not file its own enforcement action, employees may later file private lawsuits under the FLSA using information developed during the audit process. View audit response and potential litigation exposure as part of the same risk continuum. For many employers, addressing and resolving issues during the audit is the most efficient way to limit future litigation exposure and costs.
7. Use the Audit as a Compliance Checkpoint
Although audits are disruptive, they can also provide an opportunity to:
- Correct classification errors
- Improve timekeeping procedures
- Update pay practices going forward
- Reduce risk of future collective actions
However, these benefits depend on managing the investigation carefully and avoiding unnecessary expansion of liability.
A DOL wage and hour audit does not automatically mean that an employer has done something wrong, but it does require careful handling. Prompt, organized, and strategic responses can significantly limit exposure and reduce the risk that an audit expands, becomes more expensive, or turns into litigation.
Employers facing wage and hour investigations (or FLSA litigation) should consider obtaining experienced legal guidance early.
If you have received a DOL wage & hour audit notice or need assistance with any employment-related matter, please contact Maureen Carr at mcarr@beankinney.com.
This article is for informational purposes only and does not contain or convey legal advice. Consult an attorney. Any views or opinions expressed herein are those of the author and are not necessarily the views of the firm or any client of the firm.