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Client Alert from the Labor and Employment Group - May 2011

OT Liability? There's An Application For That...

By Jeremy J. Sharp

This week, the U.S. Department of Labor ("DOL") unveiled its first smartphone application, titled "DOL-Timesheet," an interactive timesheet that will enable workers to track hours, wages, breaks, and overtime easily and efficiently. The free application enables workers to view and email summaries of hours and wages in various formats, and includes a "contact us" feature to put the employee directly in contact with the DOL. In the DOL's words, the app encourages workers to gather information that "could prove invaluable during a Wage and Hour Division investigation where an employer has failed to maintain accurate employment records." This statement of purpose is consistent with the DOL's increased audit focus regarding wage and hour issues over the past two years.

DOL-Timesheet is available in English and Spanish, and is currently available for use with the iPhone and the iPod Touch. The DOL is considering similar applications for the Android and Blackberry, as well as additional features to track tips, commissions, bonuses, deductions, holiday pay, pay for weekends, shift differentials and pay for regular days of rest.

The launch of DOL-Timesheet, when viewed in context with the DOL's hiring of 250 new wage and hour auditors in late 2009, sends an unmistakable message to employers: continue business with substandard wage and hour systems and records at your own peril. Fortunately, most employers operate with the best of intentions in this area, and thus news of the DOL-Timesheet app is better viewed as the progression of a storm on the horizon rather than a crackdown on current practices.

In light of the DOL's announcement and increased audit emphasis with respect to wage and hour issues, employers should consider certain action items. First, employers should review payroll administration and systems, wage and hour policies/procedures, and employee handbooks to ensure ongoing legal compliance. Second, employers that have concerns regarding their present handling of wage and hour issues, but that had perhaps been forestalling addressing such concerns (for example, delaying payroll system upgrades pending improvement of economic conditions), should consider moving forward with such initiatives. For all employers, the potential risks of the DOL Wage and Hour "audit lottery" continue to increase, and show no signs of abating.