Back
Back
Back
Back
Back
Back
Back
Back
Back
Back
Back
Back
Back
Back
Back
Back
Back

Know the Law: Notification of a Wage and Hour Audit

Written by: Charla Bizios Stevens

Published in the Union Leader (12/22/2019)

Q. I just received notification from the U.S. Department of Labor that my business’ wage and hour practices are being audited. They have requested a lot of information about my business, including payroll records, bank records and my general ledger, and profit and loss statements. I own a small local restaurant. Do I need to give them everything? What am I in for?

A. I am sorry to hear you are going through this. It can be a challenge, especially for a small business. You actually do need to provide the materials they requested. Although your bank records and general ledger may not seem relevant to wage and hour issues, the Labor Department first needs to determine whether it has jurisdiction over your business.

If you own a restaurant, you are likely engaged in interstate commerce, which gives it jurisdiction to review your records regardless of the size of the business. Simple transactions like accepting online credit card payments or purchasing produce from out of state are enough. Therefore, all businesses need to put some focus on compliance, and there are a lot of laws with which you need to comply with when it comes to your employees.

A Dec. 11, 2019, Union Leader article gives a good example of the ways an employer can be tripped up. The article, ”Bethlehem hotel, bar to pay nearly $88K in back wages, damages,” reports on some of the violations noted by the Labor Department.

Misclassification of employees as independent contractors and paying them flat salaries regardless of the number of hours worked.

Failure to maintain accurate records of time worked.

Child labor violations by allowing children to work more days/hours than allowed by law.

Misclassification of some employees as exempt, resulting in failure to pay overtime.

Failing to combine hours worked in the hotel and restaurant for purposes of overtime calculations.

The above are some fairly common mistakes and can sometimes result simply from a lack of familiarity with the law. The New Hampshire state Department of Labor also conducts similar audits and focuses on some, but not all, of the same issues. Running afoul of the strict state and federal regulations can cost businesses significant amounts of money in payment of back wages to employees along with liquidated damages and civil penalties.

In fact, in recent years, the number of federal audits has increased significantly, so the risk is greater that small local businesses may be visited by investigators. The new year is a good time to conduct an audit of your payroll practices and employee files to ensure compliance.

Charla Stevens can be reached at [email protected].

Know the Law is a bi-weekly column sponsored by McLane Middleton, Professional Association. We invite your questions of business law. Questions and ideas for future columns should be addressed to: McLane Middleton, 900 Elm St., Manchester, NH 03101 or emailed to [email protected]. Know the Law provides general legal information, not legal advice. We recommend that you consult a lawyer for guidance specific to your particular situation.

Integrity and trust

At McLane Middleton we establish and maintain long-standing relationships with our clients to help us better achieve their unique goals over time. This approach to building trust requires that our esteemed lawyers and professionals use their broad, in-depth knowledge and work together with integrity to ascertain sound resolutions to legal matters for their clients.

Strength in numbers

McLane Middleton is made up of more than 105 attorneys who represent a broad range of clients throughout the region, delivering customized solutions. As a firm we are recognized as having the highest legal ability rating. The firm is rated Preeminent by Martindale Hubbell and is recognized as one of the nation's leading law firms in Chambers USA. Our attorneys are distinguished leaders in their respective practice areas.

Meet Our People

Commitment and collaboration

McLane Middleton's versatile group of attorneys and paralegals become trusted authorities on each case through collaboration. We work with our clients to learn their individual needs first and foremost and, together, we develop comprehensive solutions to their specific legal matters. This approach helps us exceed our clients' expectations efficiently and effectively, client by client, case by case.

Practice Areas

A history of excellence

McLane Middleton was established in 1919 in New Hampshire, and has five offices across two states. However, deep historical roots don't allow you to become innate. Our firm is organized, technological, and knowledgeable. Our history means we are recognized. But our reputation is built on the highest quality of service and experience in very specific areas of law.

The Firm

Intelligence paired with action

Our team continuously seeks opportunities to enhance their professional development and put key learnings to action. The pursuit of further insight guides us to volunteer service opportunities, speaking engagements, and teaching roles. Our lawyers are sought after thought leaders across their industries, and recipients of leadership awards throughout the region.