FLSA Audit Checklist


The U.S. Department of Labor enforces the Fair Labor Standards Act (FLSA), which regulates labor practices such as minimum wages, overtime pay and child labor. The agency may contact a business to conduct an audit, either due to an employee complaint or an irregularity in its records, and ensure that the company is complying with the law. Businesses must know what the FLSA audit will look for and prepare accordingly.

Paper Trail

  • Although the FLSA does not require a company to follow a specific format, it calls upon employers to keep accurate and up-to-date records for nonexempt employees. These records should cover the employee's personal information -- name, address, occupation, Social Security number and so on -- and compensation data. Labor department auditors inspect these records to make workers are being paid correctly and their information is properly recorded.

Child Labor

  • Although 16 is the minimum age for most employment outside the agricultural sector, the FLSA allows minors age 14 and 15 to work after school, on weekends and on school holidays in specific positions under certain conditions. Minors are allowed to work in retail stores, restaurants and service stations in nonhazardous positions. The employer should make sure the proper paperwork establishing the minor employee's age and duties is in place in preparation for an audit.

Pay Package

  • The federal minimum wage was $7.25 per hour at the time of publication. Part of the FLSA audit ensures that non-exempt employees receive the minimum wage for up to 40 hours per week. The audit also serves to find instances of unpaid or underpaid overtime work. If an employer fails to pay the minimum wage or authorizes unpaid or underpaid overtime hours, it may be forced to reimburse the employee. It also faces fines and penalties for violating federal labor law.

Administrative Exemptions

  • Some classes of employees are exempt from minimum wage, overtime pay and child-labor laws. Exemption standards are narrow and the burden of proof falls on the employer. Some examples of exempt employees include commission sales staff, farm workers and seasonal and recreational workers. Both employers and employees should examine the conditions and stipulations of an FLSA exemption before deciding an employee qualifies.


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