Department of Labor Investigations

Contact a Houston DOL Attorney

“The nine most terrifying words in the English language are: ‘I’m from the government, and I’m here to help.’” — Ronald Reagan

When the Department of Labor arrives at the door, business owners are often overcome with fear and concern—and understandably so. The Department of Labor has seemingly unlimited authority to investigate every aspect of a business’s labor practices, including timekeeping policies, the classification of employees as exempt from overtime, and the use of independent contractors. Oftentimes, however, with the assistance of an experienced Houston employment attorney, business owners can limit the scope of these investigations and limit or avoid liability.

Why is the DOL investigating my company?

The DOL initiates investigations for three primary reasons:

• Targeted industries: The DOL targets employers in industries employing large percentages of low-wage earners. Over the past few years, the DOL has also been targeting companies that regularly hire contract workers through staffing companies. Such arrangements often raise questions about whether the workers should be considered contractors or employees under the Fair Labor Standards Act.
• Formal complaints: The DOL also conducts investigations when it receives formal complaints. The DOL treats these complaints as confidential. Therefore, even when faced with a valid request under the Freedom of Information Act, the DOL will not reveal who made the complaint.
• Work-sharing arrangements: The DOL also initiates investigations when it receives tips from other government agencies. The DOL has a formal work-sharing agreement with the Internal Revenue Service and file-sharing partnerships with 37 state agencies. Many of these formal partnerships are aimed at addressing the misclassification of employees as independent contractors.

How long will the investigation last?

The investigation is normally completed within 90 days. However, the DOL investigator will typically only spend one or two business days on the company’s premises.

What can we expect at the opening conference?

The opening conference typically occurs on the employer’s premises. During the conference, the DOL investigator will sit down with the company’s representative(s) and establish a schedule for the investigation. At this stage, the investigator will also ask basic questions to determine which laws are applicable. The Fair Labor Standards Act will apply in most cases. If your business works on government contracts, other laws may also apply, such as the Davis-Bacon and Related Acts.

You have the right to have your attorney present during the opening conference. An experienced employment attorney will use the opening conference as an opportunity to discuss the proper scope of the investigation (more on this below).

Do we really need to produce everything the DOL has requested?

You are not required to produce anything—at least not initially. If you refuse to produce the information, then the DOL can (and likely will) issue a legal subpoena requiring you to produce the requested information. You would then have the right to object to the subpoena. For example, you could object that the subpoena is too broad or unduly burdensome.

In most cases, the DOL limits its request to documents that are clearly relevant, such as timekeeping and payroll records. Arguing with the DOL about the relevance of such documents is a costly and foolish endeavor. Instead, you should focus on narrowing the scope of the request to a specific timeframe and/or subset of employees. Oftentimes, the DOL will agree to limit the request for information, so long as the employer agrees to produce a reasonable sample of data (e.g., instead of producing payroll information for 200 employees, the DOL may agree to limit the inquiry to 20 employees).

Can our attorney attend the witness interviews?

Your attorney can attend any interviews of upper-management employees. Whether an employee is considered “upper-management” is not always clear. Exempt employees who supervise two or more employees are generally considered upper-management. Hourly employees are generally not considered upper-management. Therefore, your attorney likely cannot attend the DOL’s interviews with hourly employees.

The DOL says we owe a lot of money. What if we disagree?

You are not required to make any payments just because the DOL has concluded you owe the money. Despite its best efforts to enforce the law, the DOL often makes mistakes along the way. Moreover, the regulations surrounding the Fair Labor Standards Act are often subject to debate. To further complicate matters, there is often a split of authority in the case law concerning matters under the Fair Labor Standards Act. If you believe the DOL has made a mistake, misapplied the law, or miscalculated the amount of wages allegedly owed, you should retain an experienced employment attorney to assess the situation.

The Clifford Law Firm can help your company by:

• Pre-planning for the DOL’s onsite visit (including a walkthrough and assessment of the job site)
• Serving as your company’s point of contact with the DOL (thereby ensuring consistent and controlled communications with the DOL)
• Representing your company during the opening conference and onsite visit
• Attending and observing the DOL’s interviews with upper-management employees
• Advocating on behalf of your company during the DOL’s assessment phase
• Advising whether the company should fight or attempt to settle the matter
• Negotiating a settlement with the DOL