Wednesday, August 24, 2011

When the DOL Comes Calling - Can Technology Help You Defend an Audit?

One of the most litigated issues in today’s employment arena is the classification of employees under the overtime exemption provisions of the Fair Labor Standards Act (FLSA). Generally, under the FLSA, employees must be paid overtime for any time worked over forty (40) hours per week. However, the FLSA also classifies certain types of positions as exempt from the overtime requirements. In order to qualify for the exemption, the employee must meet the specific requirements of each exemption. Unfortunately, many employers wrongfully classify employees as exempt when, in fact, the employee does not qualify for the exemption.

There are many ways in which the exemption status of an employee may be challenged. In the current environment, class action lawsuits are popular. However, employees may bring these types of lawsuits on their own or ask the Department of Labor to investigate; in fact a disgruntled employee is often the trigger for an audit. In addition, the Department of Labor conducts random audits.

When the Department of Labor or a court determines that an employee is wrongly classified, the employer will be liable for the payment of the overtime that should have been paid to the employee. For employers, the amount to be paid is often difficult to determine because most employers do not have their exempt employees keep track of time worked. Interestingly, disgruntled employees seeking unpaid overtime often have their own record of the hours worked, and will present that information to the Department of Labor. (In fact, as one of our authors pointed out, the Department of Labor has created an iPhone application to assist employees in doing just that.)

So what can the employer do to prove the actual hours worked? Well, in today’s world there are a number of technologies used in the workplace that employers should think about when trying to recreate the time worked by the employee. Such technologies include:

1) Information about when an employee logged on and off of a computer, which is available on most computer systems.

2) Information derived from a security system that shows when the employee enters and leaves the building.

3) Security cameras in the workplace, which often log the time and date and can show when an employee was present.

4) Automated devices to track the delivery of product, used by many delivery and other drivers. Those devices usually have a time of day and location which can be used to show when the driver was working.

5) Data on employer-owned mobile devices.

Employers should be aware that sometimes, everyday technologies can provide resources that were not considered as benefits when the technology was put in place. In addition, when evaluating new technologies, employers may want to think about services and options that can assist them with Department of Labor audits or other types of investigations.

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