Our 3-Step Process For An FLSA Audit

Liebert Cassidy Whitmore uses a methodical, problem-solving approach to conducting an FLSA Audit that involves three key steps:

Step 1 – Review Current Practices

Step 1 of the FLSA Audit process involves both a review of the employer’s written policies and interviews with select members of the employer’s staff.

First, we review the following employer-provided materials: job descriptions of FLSA-exempt employees, collective bargaining agreements, personnel rules and payroll policies, and prior grievances and lawsuits regarding payroll practices.

Second, we interview those employees who are responsible for recording and processing work time records and paychecks. Our interview questions usually involve how staff calculates overtime, how they code process paychecks, and when they issue regular and overtime pay. The objective of this step is to determine precisely how the employer documents work time and compensates its employees.

Step 2 – Analyze Whether Practices Comply with FLSA Requirements

Here, we compare the employer’s practices with FLSA requirements to determine whether the employer is in or out of FLSA compliance. The analysis portion of the audit includes a review of disciplinary records and job duties of those who the employer has declared exempt from FLSA overtime, a manual calculation of paychecks, and a comparison of time sheets to pay checks.

Step 3 – Report Findings and Recommendations

We draft an FLSA Audit Report that is designed to both assist the employer to come into FLSA compliance and to provide the employer a good faith defense to potential FLSA litigation. Our FLSA Audit Reports contain:

  • a summary of the materials reviewed and the staff interviewed;
  • a written summary of our findings regarding whether the employer in or out of compliance with particular FLSA requirements;
  • an explanation of the analysis that led to the findings; and
  • recommendations for correcting areas of non-compliance.