September 26, 2006
Employers may be investigated, inspected, audited, or visited by the United States Department of Labor Wage and Hour Division ("WHD"), Occupational Safety and Health Administration ("OSHA"), or assigned state agencies.
The WHD is provided authorization by §11(a) of the Fair Labor Standards Act (“FLSA”) to conduct audits, inspections and visits. The most common federal laws that are investigated by the WHD are the FLSA provisions related to minimum wage, overtime pay, and laws related to employment of minors. In addition, the WHD enforces the Family and Medical Leave Act, Migrant and Seasonal Agricultural Worker Protection Act, Field Sanitation Standards of the OSHA, McNamara-O’Hara Service Contract Act, Davis-Bacon Act, Employee Polygraph Protection Act, and the Consumer Credit Protection Act.
OSHA is provided authorization by § 8(a) of the Occupational Safety and Health Act. This Act gives the Secretary of Labor broad authority to enter and inspect workplaces. In some instances, assigned state agencies are designated to make investigations and inspections on behalf of the federal government. For instance, 29 CFR Part 515 § 1-10 states in part:
An administrative division of the State agency shall be designated to make investigations and inspections under the Acts; qualified staff, under adequate supervision, shall be specifically assigned for work connected with State and Federal child-labor, maximum- hour and minimum-wage laws and regulations; and provision shall be made to inspect any establishment subject to the Acts.
1. WHY ARE INVESTIGATIONS CONDUCTED?
The reasons for inspections, investigations, and visits are typically not disclosed for confidentiality and protection reasons. Typically, complaints prompt visits by the United States Department of Labor, though the existence of a complaint is not always disclosed to an employer. This means that neither the name nor the nature of the complaint may be disclosed to the employer to ensure protection and prevent retaliation.
Complaints could include, whistleblower, discrimination, or harassment claims under any of the above statutes which are enforced by the United States Department of Labor. Complaints filed with the OSHA regional administrator may produce “unprogrammed” OSHA inspections. An employee complaint alleging imminent danger in the workplace is of highest priority for OSHA inspectors. A copy of the complaint may be provided to the employer for inspection, with names and other forms of identification removed. Workplace fatalities, accidents, or catastrophes also trigger unprogrammed OSHA inspections. Referrals and follow-up inspections are also considered unprogrammed. “Programmed” health or safety inspections are part of a regular inspection schedule designed by OSHA based on region and category.
General visits may occur when the United States Department of Labor intends to determine what laws apply to a business, and improve an employer’s compliance with those laws. The WHD may target specific employers to verify whether certain laws are applicable and whether those laws are being complied with. These are called “special emphasis inspections.” The most vulnerable employers who could be to be subjected to “special emphasis inspections” are low-wage industries, who the government may think are more likely to have high rates of violations, employ vulnerable workers, and have rapid changes in industry. Specific geographic areas and specific standards may also determine inspections by the WHD.
2. WHAT ARE THE PROCEDURES OF THE INVESTIGATION?
OSHA inspections may be preceded by a notification letter of a complaint, or an inspection warrant by issued by a United States District Court. Often times, visits are conducted at a reasonable time during normal business hours and in the daytime, without forewarning.
Pre-inspection preparation by an employer should include the appointment of an employee representative for inspector interviews. A chosen representative should be someone who can make important decisions that affect the business such as an accountant, attorney, a member of the health and safety committee, or a chosen walk around representative. Employers should update all policies, procedures, and recordkeeping on a regular basis and be well informed of applicable laws and regulations. Employers and their assigned representatives should develop an OSHA inspection plan and conduct mock OSHA inspections.
During more in-depth investigations, compliance officers may conduct preliminary investigations including looking into whether or not a complaint is valid, and checking on prior or current investigations for the same employer. Additionally, they may collect copies of prior inspection reports, inspector’s notes, interviews, signed statements, and information on previous complaints. An employer may provide a written position statement and request time to consult legal counsel. Investigators may also subpoena documents and witnesses.
The field investigation begins with the arrival of the investigator who will identify him or herself. The investigator will either present their credentials or an employer may request them. The investigator will request to meet with the employer or representative. No postponement is allowed due to absence of employer or employer representative, and OSHA inspections may not be delayed for more than one hour.
An opening conference is conducted, which is where the employer is informed of the purpose of the inspection and the investigation process is explained. In some circumstances the employer is presented with or requests a warrant detailing the scope of the investigation. Employers may request permission to include participation of an employee representative. Employers are provided with law, standards, regulations, and other informational materials to aid them during the visit. The investigator determines what exemptions or limitations apply to the employer. Issues of trade secrets and confidentiality are also discussed.
The investigator will request required records for examination. Photocopies and notes may be taken throughout the investigation for recordkeeping. Records are examined to determine of the amount of business transactions, interstate commerce participation, government contracts, the layout of the facility, and payroll and time records.
Investigators will conduct private employee interviews. These interviews may occur on the employee’s premises, at the employee’s home, by mail, or by telephone. Both former and present employees may be subject to investigation interviews. Tours of the facility are also conducted during OSHA inspections. The employer, employer representative, and/or OSHA coordinator may accompany the compliance officer on the tour.
A closing conference is conducted at the end of the investigation with the employer. The investigator will inform the employer of standards violated, corrections to be made, abatement dates, and citations may be issued. Copies of the citation are provided by mail and employers must post citations where affected employees can view them. Follow up inspections to ensure corrections are made and citations are posted, should be expected.
3. WHAT ARE THE REMEDIES FOR VIOLATIONS?
Depending on the violation, type of investigation, and who performed the investigation, remedies will vary. Financially, employers may be subject to the payment of back wages, civil money penalties, employee suits for recovery, and Secretary of Labor lawsuits brought on behalf of employees. Legally, employers may be subject to court injunctions brought by the Secretary of Labor, criminal penalties, and court injunctions that prohibit further violations. Certain statutes subject employers to the withholding of funds, administrative hearings, court action, loss of federal contracts, and the declaration of ineligibility for future contracts. Protection will be provided to the employees who file complaints or provide information for the investigation. Charges of retaliation, and potentially criminal sanctions, may occur if employees are affected after an investigation.
The Migrant and Seasonal Agricultural Worker Protection Act allows for civil and criminal charges for violations by an employer. Employers may be subject to civil money penalties up to $1,000 per violation. Criminal prosecution can lead to fines up to $10,000 and prison terms up to three years. Employers may have existing or future certificates or registrations revoked or suspended. OSHA Act violations may be referred to Department of Justice for prosecution in federal court.
4. HOW CAN AN EMPLOYER BE EXEMPT OR PREPARE FOR VISITS?
Employers may be exempt from programmed inspections by OSHA if they enroll and participate in voluntary programming. OSHA offers Employer Abatement Assistant and Employee Training Programs. In addition, an OSHA State Based Consultation Program is available which offers free advice to small businesses and one year exemptions when a business requests state visits to make corrections. The Voluntary Protection Program recognizes businesses that go beyond OSHA standards of safety and health by removing participants from general programmed schedule inspection lists.
Employers can also prepare for visits by performing self-compliance examinations or self-audits at least twice a year. Employment posters should be up to date and kept behind lock and key to ensure that compliance is not tampered with.
5. WHAT ARE EMPLOYER RIGHTS DURING INSPECTION?
Employers who are selected for inspection by OSHA may require a warrant for the investigation. Marshall v. Barlow, Inc. 436 U.S. 307, 312 (1978)(applied the Fourth Amendment warrant requirement to employer inspections with probable cause). Employers may try to challenge the validity of the warrant in court. Other rights include that an employer or a representative may accompany the compliance officer on the inspection, they may participate in conferences, meetings, and discussions concerning inspection, citation, or abatement, and they may petition for change in the abatement date. Trade secrets and confidential information can be protected.
Employer should be proactive as opposed to reactive in this area. They should conduct self-audits at least yearly to make sure they are in compliance with applicable laws enforced by the United States Department of Labor. Employers should also train their employees what to do if when an investigator shows up at the facility. Early planning and knowing how to respond to an inspection could potentially save an employer thousands of dollars and protect the employer from criminal prosecution.
*Michael J. Sciotti, Esq. is a Partner and Chair of Hancock & Estabrook, LLP’s Labor & Employment Practice Group. He may be reached at (315)425-3502 or [email protected] Wendy A. Marsh, Esq. is also a Partner and a member of the Labor & Employment & Environmental Practice Groups. The firm’s website is: www.Hancocklaw.com.