Facing an FLSA Investigation? Here's a Pro Tip - Don't Hire a Fake Priest

At any given time, we’re assisting clients respond to Department of Labor (“DOL”) investigations under the Fair Labor Standards Act (“FLSA”), the Service Contract Act (“SCA”), the Davis Bacon Act (“DBA”), among others. One question that regularly comes up is “what can I say to my employees about all this?”

Here’s a piece of advice that we have NEVER given a client: “How’s about you hire a fake priest to get employees to confess to workplace sins?” The words absurd, dumb, or stupid don’t even come close to describing such a ploy.

But according to a recent DOL press release, employees testified that their employer did just that after DOL had initiated an investigation. That was on top of other misconduct in which the employer “threatened employees with retaliation and adverse immigration consequences for cooperating with [DOL] and fired one worker who [the employer] believed had complained to the department.”

So what is our advice when DOL knocks on the door? Our first piece of advice is to cooperate with the investigator. The FLSA authorizes DOL to investigate, gather data, interview employees, enter and inspect work sites and review records as well as to gather data about hours worked and compensation paid. While these investigations are intrusive, employers are generally obligated to comply with the investigator’s requests.

Employee interviews are a customary part of the investigation. DOL will request you to provide them with lists of employees so they can be contacted and interviewed about their hours or work, their pay, the nature of their jobs, among other issues. The investigator gets to decide who they’ll interview and when. Except for some management employees, interviews are conducted in private and the employer is told that it may not put pressure on or threaten employees with retaliation for cooperating with DOL. For more information, here’s a link to DOL’s fact sheet about “visits to employers.”

However, don’t confuse cooperation with admitting defeat. Investigators are often overworked and may not understand the records they’re given. They may perceive violations where none exist or miscalculate backpay or penalties. An employer’s input may be more persuasive if the investigator senses that the employer ultimately wants to comply with the law. That’s why it’s important to take an investigation seriously and to be responsive. The investigator is much more likely to be open-minded about an employer’s defenses if they feel the employer is acting in good faith. And that can tip the scales when the investigator is considering whether an FLSA or SCA violation is willful, which can have a significant impact on an employer’s financial liability as well as influence whether a contractor might be debarred.

Communicating with employees about the existence of a DOL investigation can be tricky. An employer’s communications should be truthful and fair and should never threaten consequences for cooperating with an investigation. However, that does not mean the employer has to confess sins it didn’t commit. Just don’t go hiring a fake priest.