Employee Claims: How to Effectively Manage a Labor-Related Investigation

A G&A Series: Claims & Investigations

This 3-part employment law series from G&A will cover:

• Part 1: Labor Landscape: How Evolving Federal Labor Agency Priorities Can Impact Your Business
• Part 2: Proactive Compliance: Safeguard Your Company with Current Policies and Insurance
• Part 3: Employee Claims: How to Effectively Manage a Labor-Related Investigation

Part 3 —

Despite your team’s best efforts to comply with local, state, and federal labor laws, your business may eventually face an investigation, audit, or lawsuit based on charges filed with U.S. labor agencies.

In this final installment in our “Claims & Investigations” series, we examine how to prepare for and navigate an investigation into employee charges filed with the Equal Employment Opportunity Commission (EEOC), Occupational Safety and Health Administration (OSHA), and the Wage and Hour Division (WHD).

In addition, you can learn more about National Labor Relations Board (NLRB) investigations here.

Managing an OSHA Inspection

Most private sector employers and employees in all 50 states, the District of Columbia, and other U.S. jurisdictions are covered by the federal OSHA program or an OSHA-approved state plan. Self-employed workers are usually covered under state plans, and some industries are regulated by specific federal agencies, such as the Mine Safety and Health Administration.

Under the OSH Act, employees have the right to:

• A safe workplace
• Raise a safety or health concern or report a workplace injury or illness to their employer or OSHA without fear of retaliation
• Receive information and training on job hazards
• Request an OSHA inspection of their workplace
• File a complaint with OSHA in the event of retaliation
• See OSHA citations issued to their employer

Inspections can happen anytime, whether requested by an employee or employer or as an unrequested inspection initiated by OSHA, and inspections can cover the entire workplace or just a few operations.

What To Expect (and How to Prepare for) Each Phase of OSHA's Inspection Process

OSHA Inspector Arrival
Upon arrival, the OSHA inspector (called a "compliance officer") is required to check in and obtain permission to conduct the inspection.

Recommended actions to take during this phase:

• Designate a supervisor or manager to greet the inspector and verify credentials by requesting to see their government-issued ID and business card.
• Request the reason for the inspection (employee complaint, accident, etc.) and what they will be inspecting (scope).
• Assemble all management team members and employees participating in the inspection process.
• Grant the inspector "permission to inspect." If your company chooses not to, OSHA will likely delay the inspection and seek a warrant to inspect.

Opening Conference
The OSHA inspector will request to meet with representatives of your company's management team and employees to explain the inspection's purpose.

Recommended actions to take during this phase:

• Take detailed notes during the opening conference.
• Ensure that the inspection will cover the hazards listed in the complaint.
• Keep all publications and documents provided by the inspector.
• Request that the inspector advises company representatives of all suspected violations and the standards involved.

Records Review
The inspector will check your company's OSHA-required Log and Summary of Occupational Injuries and Illnesses and may ask to review documents related to your company's health and safety program.

Walk-Around
Next, the inspector will start the walk-around to check for safety and/or health hazards.

Recommended actions to take during this phase:

• Accompany the inspector on the walk-around.
• Inform co-workers that the inspection is in progress and that they have a right to talk privately with the inspector about hazards, past accidents, illnesses, and worker complaints.
• Take notes and photos during the inspection. The inspector should bring violations to your representative’s attention as they are documented.
• Ask questions if you do not understand what the inspector is doing.
• Request summaries of sampling results, which OSHA must provide as soon as practicable.

Closing Conference
After the walk-around, the inspector will conduct a closing conference with the company and employee representatives to discuss apparent violations and possible fines, as well as corrective measures and deadlines.

Recommended actions to take during this phase:

• Ask for details about any violations the inspector documented at your workplace.
• Take notes and record documentation provided by the inspector.

OSHA's deadline to issue citations is six months after the inspection. After that, employers only have 15 working days to contest, attend an informal conference or pay the designated fine. Consult OSHA’s inspection guide for additional information.

Department of Labor Wage and Hour Audit

Most wage and hour investigations by the Department of Labor (DOL) originate with an employee complaint, which is kept confidential. In addition, the DOL conducts targeted investigations of certain types of businesses or industries known for employing vulnerable workers or committing a more significant number of violations or egregious violations.

Investigations are conducted by Wage and Hour Division (WHD) authorized representatives, who gather data on wages, hours, and other employment conditions to determine compliance with the FLSA regardless of workers’ immigration status.

Though business owners cannot eliminate the risk of a wage and hour audit, you can be prepared.

Below are recommended steps to help you prepare for and manage an investigation:

• Self-Audit Your FLSA Compliance: You can avoid or mitigate the burden of an investigation by regularly auditing your company's compliance. Check FLSA requirements to help you identify problems and resolve them before a WHD investigation.
• Keep Required Payroll Records: Create or save electronic versions of your business's payroll records. WHD regulations state that employers must be able to produce the documents required by the FLSA within 72 hours.
• Seek Expert Advice in Advance: The DOL's enforcement agencies typically provide little advance notice to employers, so once you are informed that your business is the subject of a wage and hour audit, contact your human resources manager or employment counsel to discuss your business's rights and responsibilities. A professional employer organization (PEO), like G&A Partners, can also help ensure your employment practices comply with local, state, and federal labor laws and regulations.
• Reschedule the Audit if Needed: You can ask for additional time to gather records requested by the agency investigators or reschedule the appointment to give your business more time to prepare.
• Appoint an Audit Team: Designate a company representative or team responsible for working with the investigator during the audit.
• Gather and Prepare Documents: Assemble documentation requested by the investigator, make copies for your records, and maintain a tracking system.
• Create Space for the Investigator: Provide a quiet, private place where the investigator can work, meet with company representatives, and, if applicable, interview employees. They will research your business's compliance with the FLSA and may expand the investigation to other locations if they find a violation.
• Request an Audit Summary: Once the investigator concludes their audit, ask for an overview of their findings for your records.

If the WHD investigator identifies violations, they will recommend changes in employment practices to bring your company into compliance. In addition, the FLSA allows the DOL or an employee to recover back wages and an equal amount in liquidated damages for minimum wage and overtime violations through administrative procedures, litigation, and/or criminal prosecution.

Navigating an EEOC Investigation

An employee can file a charge(s) with the Equal Employment Opportunity Commission (EEOC) against their employer for the following reasons:

• Unfair treatment because of race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age (40 or older), disability, or genetic information.
• Harassment by managers, co-workers, or others in the workplace, because of race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability, or genetic information.
• Denial of a reasonable workplace accommodation that an employee needs because of religious beliefs or disability.
• Retaliation because an employee complained about job discrimination or assisted with a job discrimination investigation or lawsuit.

The EEOC will notify your organization within 10 days of a charge filing and will provide a link to the EEOC's Respondent Portal, where you can access information about the charge and investigation.

According to the EEOC's "What should I do if I receive an EEOC charge of discrimination?," though a charge does not constitute a finding that your organization engaged in discrimination, the agency has the authority to investigate whether there is reasonable cause to believe discrimination occurred.

Here is what to expect from an Equal Employment Opportunity Commission (EEOC) charge investigation and recommended actions for your business:

Charge Notice
When your business receives an EEOC "Notice of a Charge of Discrimination," review it carefully and follow the directions in the notice. Remember that a charge is a complaint of discrimination, not a determination that discrimination has occurred.

Mediation and Settlement Options
At the start of an investigation, the EEOC will advise your company and the charging party (employee) if the charge is eligible for mediation. You can also ask your assigned investigator about the possibility of a settlement option. Mediation and settlement are voluntary resolutions.

Employer Responsibilities
Employers are encouraged to present any facts that demonstrate the allegations are incorrect or do not violate the law. You can work with the investigator to establish a new deadline if you need additional time to gather information and evidence. NOTE: The EEOC is entitled to all information relevant to the allegations and has the authority to subpoena the information.

EEOC Responsibilities
The investigator assigned to your case will be available to answer questions about the investigation, respond to inquiries about the investigation's status, and inform you of your rights and responsibilities. They are required to conduct a timely investigation and inform you of the outcome.

Investigative Process
During the charge investigation, the EEOC investigator will request information from your company and the charging party, which could include a statement of position ("your side of the story"). They will request your company's personnel policies, the charging party's personnel files, or files of individuals relevant to the investigation. The investigator may also conduct an on-site visit and interview potential witnesses. After evaluating all information, the investigator will recommend whether there is reasonable cause to believe that unlawful discrimination has occurred.

Letter of Discrimination
If the investigator determines that there is reasonable cause to believe discrimination has occurred, both parties will be issued a Letter of Determination, which invites you to work with the agency to resolve the charge through an informal process known as conciliation. If conciliation is not successful, the EEOC has the authority to enforce violations of its statutes by filing a lawsuit in federal court.

Dismissal and Notice of Rights
If the investigator determines there is no reasonable cause to believe that discrimination occurred, the charging party will be issued a notice called a Dismissal and Notice of Rights, which informs the charging party that they have the right to file a lawsuit in federal court within 90 days from the date of its receipt. The employer will also receive a copy of this notice.

Retaliation Protection
Whatever the outcome, take action to ensure that the charging party is not punished for filing the charge and that no employees are punished for participating in the investigation. Retaliation is illegal, even if the EEOC concludes that the charge of discrimination does not have merit.