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Does your business pay its employees overtime? Are you ready for a Department of Labor Audit or Investigation?

It is important for employers to understand their obligations under the federal and state labor laws before any action is commenced. Proactive steps in this area can be significant. Our Award Winning NY Employment Lawyer routinely counsels businesses on best practices and compliance issues. A sample New York State Department of Labor notice is included below to show what can happen if a business does not comply with the required legal provisions.

Dear Business Owner:

This letter is in regards to your business, ABC Corp. The New York State Department of Labor (NYSDOL) has completed an investigation in order to determine your compliance with the NYS Labor Law from September 2012 through August 2016.

A field inspection was made by this department to your premises. Employees were interviewed and a request for inspection of employee’s time and payroll records were given to your manager with a deadline of April 1st. The records requested were not provided to us by the given deadline. We contacted you again about the availability of these records but you stated that you did not keep a journal of employee daily time records during the investigation period. Please be advised that Section 661 of Article 19 of the NYS Labor Law requires employers to keep and have available for inspection, for not less than six years, a true and accurate record for each employee, showing daily and weekly hours worked, gross wages, deductions, any allowances claimed and net wages, and all other records required under the Minimum Wage Order for this industry found in the NYS Codes, Rules and Regulations (NYCRR) Title 12, Parts 137, 138, 141, 143 or 146.

Because of your failure to maintain, and readily provide the requested records, the available information collected during the investigation was used to make a determination regarding your compliance with the New York State Labor Law.

The DOL’s letter then proceeded to include computations of wages owed to the employees (current and former) based on their allegations plus fines for failure to comply with the Labor Law. In this case, the Company believed that the employees had inflated their hours worked and inaccurately reported the amount of cash wages received. However, the Company’s failure to keep accurate time and payroll records limited its ability to rebut the workers’ allegations.   The total amount of unpaid wages and penalties was substantial for a small business.  This is just one type of claim that a small business may face for failure to comply with the labor law; it could also be subject to investigations by the US Department of Labor, other government agencies and lawsuits by current or former employees.

If you have any questions about your obligations under the labor law or about any other employment law issues, contact our office at (800) 893-9645 for a confidential consultation to learn the applicable compliance issues and best practices.

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