It's tax time, and perhaps the only thing worse than completing your tax returns is finding out that you're being audited. But not all audits are bad. Under the FLSA, conducting an internal audit of your company's pay practices can actually even be beneficial to your business.
Employers should be aware of how we got to the recent FLSA amendment regarding tips, and have a solid understanding of their own tip-related practices, before trying to determine where to go from here.
Today's federal budget included a rider to amend the FLSA and prohibit an employer from keeping tips received by its employees, regardless of whether or not the employer takes a tip credit.
USDOL's Payroll Audit Independent Determination (PAID) pilot program is meant to provide employers with the framework to proactively resolve potential FLSA claims. Nonetheless, on the whole, it seems that the benefits and risks are not particularly distinguishable from an investigation.
The public comment period for the USDOL's proposed rescission of the 2011 tip regulations has closed. Regardless of where data and "fairness" concerns might lead one, the fundamental legal issue is that the agency's authority does not extend to circumstances where an employer is not taking the tip credit.
The Federal Judicial Center has provided guidance that could fast track initial disclosures by including requirements uniquely crafted for FLSA cases.
Technological advances in payroll practices might be desired by both employers and employees, but an employer should give careful consideration as to how it will address the variety of legal restrictions and administrative burdens these advances could implicate.