Wage and Hour Audit: Are You Paying for ALL Compensable Time?

As we move into the second quarter, April is the perfect time for employers to conduct a proactive wage and hour audit. Many Department of Labor investigations do not begin with intentional violations — they begin with overlooked timekeeping practices.

Here are four high-risk areas to review now:

1️⃣ Rounding Practices

Are time entries being rounded down in a way that consistently favors the employer?

Under federal law, rounding is permissible only if it is neutral over time. If your payroll system trends toward reducing recorded hours week after week, that creates exposure — especially in overtime workweeks.

✔ Review a sample of weekly totals in decimal and HH:MM format
✔ Confirm rounding works both ways
✔ Document your rounding policy

2️⃣ Automatic Lunch Deductions

Automatic 30- or 60-minute deductions remain one of the most common back-wage findings.

If employees:

• Work through lunch
• Eat at their desks
• Remain on call
• Perform job duties during the meal period

The time is likely compensable.

✔ Require employees to confirm missed lunches
✔ Train supervisors not to discourage reporting
✔ Audit weeks where overtime is triggered

3️⃣ Pre- and Post-Shift Activities

Under 29 CFR 785, compensable time may include activities performed before or after the scheduled shift when integral and indispensable to the principal activity.

Examples often missed:

• Loading or inspecting vehicles (drivers)
• Required safety briefings
• Donning required gear
• Boot-up time for required systems
• Travel between job sites during the day

If the activity benefits the employer and is required, it likely counts.

4️⃣ Uniform and Equipment Deductions in Overtime Weeks

Deductions for uniforms or tools during overtime weeks can create minimum wage or overtime rate violations — particularly at Florida’s higher state minimum wage.

✔ Confirm deductions do not reduce pay below required minimums
✔ Ensure overtime is calculated on the proper regular rate

Why April Is the Right Time

A second-quarter audit allows employers to:

• Correct issues before peak season
• Reduce DOL exposure
• Strengthen documentation
• Demonstrate good-faith compliance

A proactive internal review costs far less than a reactive investigation.

If you would like a confidential payroll risk review or independent compliance checkup, FA Consulting LLC specializes in third-party wage and hour analysis and DOL response strategy.