Plan, Prevent, Protect

HR Advisors Practices Compliance Audits to Support P3 Initiative

The Department of Labor (DOL) is beginning increased enforcement and they expect to generate $7 Billion of additional revenue over the next 10 years.

The DOL’s Goals are to implement the PLAN – PREVENT – PROTECT Program designed to assure that employers regulated by the DOL take responsibility for employment law compliance as Congress requires.

The Regulations will require:

  • PLAN – Require employers to prepare a written plan for identifying and remediating risks of legal violations (for example: explain why certain workers are classified as independent contractors)
  • PREVENT – Require employers to implement the plan in a manner that prevents legal violations and risks to workers.
  • PROTECT – Requires employers to ensure that the plan’s objectives are met – for example: implement a misclassification initiative, including working with the IRS and state labor agencies to target employers who are not classifying workers properly.

What should a company do? – the answer is:  AUDIT – AUDIT – AUDIT!!

It’s back to basics.  Attorneys Gray and Joseph suggest that you look closely at the following areas:

  • Exempt/Non-Exempt classifications
  • Independent Contractor Classifications
  • Improper Deductions/Docking
  • Recordkeeping
  • Posters
  • Paying for all “Work” – Bonuses Calculated in Overtime, Travel Time, Waiting Time/On-Call, Working off-the-clock, etc.

The DOL isn’t the only source of challenges – the IRS is also mobilizing to combat misclassification with a National Research Program that will target 6,000 businesses. Targets will be selected at random and will cover five employment tax-related issues:

  • Worker Misclassification
  • Fringe Benefits
  • Non-Filers
  • Officers’ Compensation
  • Employee Expense Reimbursements

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