Common Wage & Hour Violations Found During Department of Labor Investigations
Introduction
Wage & hour violations remain one of the most frequently cited enforcement issues by the U.S. Department of Labor (DOL). Many employers are surprised to learn that violations often stem from routine payroll practices rather than intentional misconduct.
Based on enforcement trends and real-world investigations, this article outlines the most common wage & hour violations identified during DOL audits and how employers can proactively reduce risk.
1. Overtime Miscalculations
Improper overtime calculations are among the most common findings in DOL investigations. Employers often fail to correctly calculate the “regular rate of pay,” especially when bonuses, incentives, or multiple pay rates are involved.
Common mistakes include:
- Excluding non-discretionary bonuses from overtime calculations
- Improper use of blended rates
- Incorrect application of alternative overtime methods
2. Employee Misclassification
Misclassifying employees as exempt from overtime or as independent contractors can result in significant back wage liability.
Frequent issues include:
- Exempt employees who do not meet duties tests
- Salaried employees incorrectly treated as exempt
- Independent contractors who function as employees
3. Off-the-Clock Work
Failure to capture all hours worked is a recurring enforcement issue. This includes pre-shift, post-shift, remote, or mobile work that goes unpaid.
Examples include:
- Employees working before clocking in
- After-hours email or system access
- Unrecorded travel or preparatory activities
4. Recordkeeping Deficiencies
The Fair Labor Standards Act (FLSA) requires employers to maintain accurate payroll and time records. Missing or inaccurate records often trigger expanded investigations.
Common recordkeeping issues:
- Incomplete time records
- Inconsistent payroll documentation
- Failure to retain records for required periods
5. Improper Wage Deductions
Unauthorized deductions can reduce employee pay below required minimum wage or overtime levels.
Examples include:
- Uniform or equipment deductions
- Cash shortages or breakage deductions
- Improper repayment arrangements
How Employers Can Reduce Risk
Proactive compliance reviews help identify issues before enforcement occurs. Employers benefit from:
- Regular payroll audits
- Overtime calculation reviews
- Classification assessments
- Timekeeping system evaluations
Work With a Compliance Professional
FA Consulting LLC provides nationwide wage & hour and federal labor compliance consulting. Services are led by Frank Alvarado, former U.S. Department of Labor Wage & Hour Investigator, offering insight into how violations are identified and enforced.
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