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 challenge 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