What Should I Do If The Department Of Labor Is Investigating Or Auditing My Company In New York?
If the Department of Labor is investigating your company, retain a New York City Employment Attorney who is familiar with governmental investigations and audits of employers. Either of two Labor Departments may be investigating or auditing your business. One such administrative agency is the U.S. Department of Labor. The other such agency is the New York State Department of Labor.
With your attorney’s assistance, you should determine what the nature of the Department of Labor’s inquiry is.
Most investigations by the U.S. Department of Labor focuses on (i) the employer’s alleged misclassification of its workers as independent contractors, (ii) the business’s failure to pay, to its employees, the federal minimum wage, or (iii) the company’s failure to pay, to its employees, overtime compensation.
The majority of investigations by the New York State Department of Labor focus on the employer’s asserted mischaracterization of its workers as independent contractors, rather than as employees.
An employer which classifies all of its workers as independent contractors, rather than as employees, neither purchases a workers’ compensation insurance policy nor makes monetary contributions into New York State’s Unemployment Insurance Fund.
At some point, that employer terminates a worker, or one of the employer’s workers suffers, on the job, an injury. That discharged or injured worker files, with the New York State Department of Labor, a claim for unemployment insurance benefits or for workers’ compensation benefits, as the case may be.
As a result of the worker’s claim, the New York State Department of Labor discovers that the employer (i) has failed to purchase, from either a private insurance carrier or the New York State Insurance Fund, a workers’ compensation insurance policy or (ii) has failed to register with the State Department of Labor’s Unemployment Insurance Division, to withhold unemployment insurance taxes from workers’ paychecks, and to make monetary contributions into New York State’s Unemployment Insurance Fund, as applicable.
The State Department of Labor’s discovery prompts the Department to investigate or audit the company for allegedly misclassifying its workers as independent contractors.
In any employee misclassification investigation or audit by the federal or New York State Department of Labor, it is essential that your business retain a New York City Employment Lawyer to assist you in producing the documents that the labor department demands.
Further, in a federal or New York investigation or audit, it is important to understand what is negotiable and what is not negotiable. Typically, what the U.S. or New York State Department of Labor is most willing to negotiate, with the employer under investigation, is not the unpaid wages themselves but, rather, liquidated (additional) money damages.
The federal and State Departments of Labor are each entitled to assess 100% liquidated damages unless the employer demonstrates that its violations were not willful. Usually, it is these additional money damages that the federal or state labor department is most willing to negotiate.
If you are an employer in the New York City metro area and the federal or New York State Department of Labor is investigating or auditing your business, call New York City Employment Lawyer David S. Rich at (347) 941-0760 today.
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