The dental attorneys at Nardone Limited regularly assist our clients with labor, employment, and human resource issues, including providing guidance on the Fair Labor Standards Act (“FLSA”) and its regulations.  One very important aspect of operating a dental practice is ensuring that the dental practice complies with federal and state labor and employment laws, rules, and regulations.

What is the Fair Labor Standards Act?

For private sector employers, the FLSA establishes minimum wage, overtime pay, recordkeeping and youth employment standards affecting full-time and part-time workers. The Wage and Hour Division (“Wage and Hour”) of the Department of Labor administers and enforces the FLSA. Wage and Hour has the authority to (i) investigate an employer’s policies, practices, procedures, and other related documents; and (ii) interview employees to determine if the employer is in compliance with the FLSA and its regulations.

What is an FLSA Audit?

As a preventative measure, it is important for all employers, including dental practices, to conduct an internal FLSA audit. There are two types of FLSA audits. One is an FLSA compliance audit and the other is an FLSA position audit.

FLSA Compliance Audit – An FLSA compliance audit is conducted by an individual or organization that is familiar with the FLSA and its regulations. This audit is conducted to review an employer’s policies, procedures, practices, and documentation to ensure that the employer is in compliance with the FLSA and its regulations. Once the individual or organization reviews the employer’s policies, procedures, practices, and documentation, the individual or organization will provide the employer with an analysis and recommendations on various requirements under the FLSA and its regulations.

FLSA Position Audit – Similar to the FLSA compliance audit, the FLSA position audit should also be conducted by an individual or organization that is familiar with the FLSA and its regulations. The position audit is a review of the employer’s positions that are paid on a salary basis and are designated as exempt from the FLSA. This audit will include a review and analysis of the duties and responsibilities of the positions designated as exempt. Once the review is complete, the individual or organization will provide the employer with an analysis and recommendations as to their opinions on whether each position is exempt.

Why is an FLSA Audit Important? 

The FLSA compliance audit and the FLSA position audit, both as defined above, are important to: (i) ensure your dental practice is in compliance with the FLSA; (ii) deter and prevent employees from filing complaints with Wage and Hour related to compliance with the FLSA and its regulations; and (iii) ensure positive findings and no penalties or future-related litigation if the Wage and Hour does conduct an audit of your dental practice. If Wage and Hour conducts an audit of your practice and they issue findings that your practice is not in compliance with the FLSA and its regulations, your dental practice could be subject to paying thousands of dollars in back wages, damages, penalties, and resulting legal fees.

Bottom Line for Your Dental Practice

Nardone Limited has conducted internal FLSA Audits for its clients and has also defended clients, including dental practices, against audits conducted by Wage and Hour. The bottom line is that all employers, including dental practices, must comply with the FLSA and its regulations.

Additionally, no employer is immune from Wage and Hour conducting an audit of your business and issuing findings, fines, and penalties or even filing suit against your practice. An audit could be the result of a complaint filed by a current or former employee or even the result of a random audit conducted by Wage and Hour. A complaint by a current or former employee could be based upon a valid FLSA violation or could be the result of a disgruntled employee seeking revenge.  For these reasons, it is important to ensure your compliance with the FLSA and its regulations to prevent future potential employment-related litigation and liability.