I have often posted on the recently found aggressiveness of the Departments of Labor, on both the federal and state levels, to step up enforcement of (alleged) wage-hour (i.e. overtime) violations and independent contractor audits (i.e. 1099/consultant). More fuel has just been thrown onto this already raging fire as the federal DOL has now requested more money to “fight” violations of the Fair Labor Standards Act, the Family Medical Leave Act and to curb the ostensible scourge of misclassification allegedly rampant in business today.
The need for more money seems to also have political overtones, as suggested by the recent statement of the Acting Secretary of Labor, who stated that “the Department of Labor’s fiscal year 2014 budget request is a critical ingredient in the Obama administration’s plan to grow the economy from the middle class out, not from the top down.” The Acting Secretary added that the DOL wants to “make sure Americans can support their families with a decent wage and secure benefits.” All this seemingly designed to help the (highly-prized, politically) middle class and those with aspirations to enter the middle class.
The increased monies would be focused on the pursuit of wage hour transgressors and almost four million additional to audit independent contractor misclassification issues. Exemption classification audits would also be stepped up with these funds. Such misclassifications, in the DOL’s view, “deprive workers of benefits and protections to which they are legally entitled and puts law-abiding businesses at a disadvantage against employers who violate the law.”
The employer can never know, for sure, if/when he will be subject to a DOL audit on exemption classifications, employee-contractor classification or any other aspect(s) of wage hour compliance. The only sure-fire defense is, simply, to be in compliance. To achieve that lofty, but not unattainable goal, the best strategy is to (as I have done for numerous clients) conduct a self-audit of all compensation practices and classification issues, fix what may be broken, softly, subtly, and then whatever happens, the employer will have some level of assurance that all will be well.