Managing Labor Law Claims & Investigations

As a business owner, you’re committed to following local, state, and federal labor laws to ensure compliance. But given the complexity and changing nature of regulations, it’s equally important to be prepared for the possibility of human resources (HR) labor law claims in case your business faces an investigation, audit, or lawsuit based on charges filed with U.S. labor agencies.

The Equal Opportunity Commission (EEOC), Department of Labor's Occupational Safety and Health Administration (OSHA), Wage and Hour Division (WHD), and National Labor Relations Board (NLRB) and are charged with enforcing various U.S. labor laws, which grant them authority to set and enforce established standards.

Employees can contact these federal agencies for guidance or to submit claims regarding unfair employment practices by their employers. Responsibilities for each agency include (but are not limited to):

• Equal Opportunity Commission (EEOC): Investigates unlawful employment discrimination and harassment claims
• Wage and Hour Division (WHD): Responsible for minimum wage and overtime claims under the Fair Labor Standard Act (FLSA), child labor claims under the FLSA, and alleged Family and Medical Leave Act (FMLA) violations
• Occupational Safety and Health Administration (OSHA): Investigates alleged workplace safety violations
• National Labor Relations Board (NLRB): Handles claims that involve alleged interference with labor organizing activities

More recently, these agencies have joined forces to protect employees' rights in the workplace.

In 2022, the NLRB and WHD announced a joint Memorandum of Understanding (MOU) to “…strengthen the agencies' partnership through greater coordination in information sharing, joint investigations and enforcement activity, training, education, and outreach.” In particular, the partnership focuses on enforcing unlawful pay practices, misclassifying workers as independent contractors, and retaliating against workers who exercise their rights to organize and bargain collectively.

In 2023, the NLRB and OHSA entered an MOU to promote safe and healthy workplaces by strengthening protections for workers who speak out about unsafe working conditions or retaliation for voicing concerns.

A labor law claim is a legal complaint filed by an employee alleging that their employer has violated a labor law. A government agency or other authorized body conducts a labor law investigation to examine the claim's validity by gathering evidence through interviews, document reviews, and site visits to determine if a violation occurred and if corrective action is needed.

According to USA.gov, labor claims often involve violations of the following workplace protections:

• Termination of Employment: Federal and state laws determine how and when employees can be fired.
• Discrimination, Harassment, and Retaliation: The EEOC and states enforce discrimination and harassment laws that protect workers from unfair and unwelcome treatment at work. Discrimination and/or harassment happens when an employer mistreats an employee or job applicant – or demonstrates unwelcome conduct – because of their race, color, religion, sex, national origin, age (40 or older), disability, or genetic information. Retaliation happens when an employer treats someone poorly because they engaged in a protected activity.
• Workplace Safety: Federal law states that employees have the right to a safe workplace free of health and safety hazards and the right to voice concerns about safety issues without fear of retaliation.
• The Family and Medical Leave Act (FMLA): The WHD enforces FMLA violations, allowing eligible employees up to 12 weeks of unpaid leave for medical or family reasons. The employer must protect the employee's position and access to group health benefits while they are on leave.
• Wage Laws: The WHD investigates violations of the Fair Labor Standards Act (FSLA), which governs minimum wage, overtime pay, and job misclassification, which determines when and how employers classify employees and independent contractors. Many states also enforce their own minimum wage laws.

Each labor agency has its own investigation process. Familiarizing yourself with HR labor law claims will help prepare your company to work with these agencies, should the need arise, and resolve any issues as successfully as possible for both your business and employees.

The labor law investigation process starts when an employee files a claim with the applicable labor agency, and the timeline of labor law investigations varies with the claim. Some may take a few days to complete, while others run for several weeks, depending on the severity and complexity of the claim. When managing labor law claims investigations, it's best to plan for the possibility of a longer timeline.

Take, for example, a Department of Labor (DOL) investigation, which, according to Laborsoft.com typically lasts three to six months.

“This is the amount of time needed to get from the initial complaint to a settlement or adjudication,” states LaborSoft in their article, “How Long Does a Department of Labor Investigation Take?” “If the scope of the claim is limited in time, place, or number of people involved, the investigation may move toward resolution more quickly. A large investigation can potentially take much longer, though. It’s not unusual for complicated cases to continue to progress for two years or longer as additional evidence is gathered, involved parties and experts are interviewed, and a complete vision of the case is constructed.”

Factors that may contribute to the length of an investigation include:

• The complexity of the issues that are under investigation.
• Legal questions or matters that require adjudication.
• There is a need to call upon expert witnesses to assist with the investigation.
• The number of employees affected by the claim and their level of cooperation in the investigation.
• Ease (or difficulty) obtaining evidence.

The best defense is a good offense. Conducting a self-audit of the human resources policies and procedures for your business helps you identify and resolve any potential HR compliance problems before an investigator gets involved. Your company can also put procedures in place to help manage labor law investigations so that you are prepared if or when it happens.

Each agency charged with administering labor laws has its own employee relations investigation process. That process determines what happens from start to finish – including claims filing, investigation, statement of findings or resolution, and employer/employee appeals.

Because each process is unique, our G&A Partners compliance experts have gathered important information and workplace investigation examples for the Equal Employment Opportunity Commission (EEOC), Occupational Safety and Health Administration (OSHA), and the Wage and Hour Division (WHD). This can help serve as a guide for your business in the event one of your employees files a labor law claim.

Most private-sector employers and employees in all 50 states, the District of Columbia, and other U.S. jurisdictions are covered by the federal OSHA program or an OSHA-approved state plan. Self-employed workers are usually covered under state plans, and some industries are regulated by specific federal agencies, such as the Mine Safety and Health Administration.

Under the Occupational Safety and Health Act (OSH Act), employees have the right to:

• A safe workplace
• Raise a safety or health concern or report a workplace injury or illness to their employer or OSHA without fear of retaliation
• Receive information and training on job hazards
• Request an OSHA inspection of their workplace
• File a complaint with OSHA in the event of retaliation
• See OSHA citations issued to their employer

Inspections can happen anytime, whether requested by an employee or employer or as an unrequested inspection initiated by OSHA, and inspections can cover the entire workplace or just a few operations.

When OSHA receives a complaint, it is evaluated to determine if it warrants an off-site investigation or on-site inspection.

At least one of the following eight criteria must be met for OSHA to conduct an on-site inspection:

1. A written, signed complaint by a current employee or employee representative with enough detail to enable OSHA to determine that a violation or danger likely exists that threatens physical harm or that an imminent danger exists
2. An allegation that physical harm has occurred as a result of the hazard and that it still exists
3. A report of an imminent danger
4. A complaint about a company in an industry covered by one of OSHA's local or national emphasis programs or a hazard targeted by one of these programs
5. Inadequate response from an employer who has received information on the hazard through a phone/fax investigation
6. A complaint against an employer with a past history of egregious, willful or failure-to-abate OSHA citations within the past three years
7. Referral from a whistle-blower investigator
8. Complaint at a facility scheduled for or already undergoing an OSHA inspection

During a phone investigation, an OSHA representative contacts the employer, describes the alleged hazards, and follows up with a fax or letter. The employer must respond within five days, identifying in writing any problems found and noting corrective actions taken or planned. OSHA generally will not conduct an on-site inspection if they determine the issue has been adequately resolved. The employee who filed the original complaint will receive a copy of the employer's response and can request an on-site inspection if unsatisfied with the outcome.

How to Prepare for Each Phase of OSHA's On-Site Inspection Process

OSHA Inspector Arrival

Upon arrival, the OSHA inspector (called a “compliance officer”) must check in and obtain permission to conduct the inspection.

Recommended actions to take during this phase:

• Designate a supervisor or manager to greet the inspector and verify credentials by requesting to see their government-issued ID and business card.
• Request the reason for the inspection (employee complaint, accident, etc.) and what they will inspect (scope).
• Assemble all management team members and employees participating in the inspection process.
• Grant the inspector “permission to inspect.” If your company chooses not to, OSHA will likely delay the inspection and seek a warrant to inspect.

Opening Conference

The OSHA inspector will request to meet with representatives of your company's management team and employees to explain the purpose of the inspection. During the opening conference, they will explain why OSHA selected the workplace for inspection and describe the inspection scope, walkaround procedures, employee representation and employee interviews. You will select a representative to accompany the OSHA inspector, and the employee(s) can also designate an authorized representative.

Recommended actions to take during this phase:

• Take detailed notes during the opening conference.
• Ensure that the inspection will cover the hazards listed in the complaint.
• Keep all publications and documents provided by the inspector.
• Request that the inspector advise company representatives of all suspected violations and the standards involved.

Records Review

The inspector will check your company's OSHA-required Log and Summary of Occupational Injuries and Illnesses and may ask to review documents related to your company's health and safety program.

Walkaround

Next, the inspector will start the walkaround to check for safety and/or health hazards in the workplace areas covered by the inspection. They may point out possible violations that can be corrected immediately, and they will review worksite injury and illness records and check for the posting of the official OSHA poster.

Recommended actions to take during this phase:

• Accompany the inspector on the walkaround.
• Inform co-workers that the inspection is in progress and that they can talk privately with the inspector about hazards, past accidents, illnesses, and worker complaints.
• Take notes and photos during the inspection. As violations are documented, the inspector should bring them to your representative's attention.
• Ask questions if you do not understand what the inspector is doing.
• Request summaries of sampling results, which OSHA must provide as soon as it is reasonable or feasible given the circumstances.

Closing Conference

After the walkaround, the inspector will conduct a closing conference with the company and employee representatives to discuss apparent violations, possible fines, corrective measures, and deadlines.

Recommended actions to take during this phase:

• Ask for details about violations the inspector documented at your workplace.
• Take notes and record documentation provided by the inspector.

OSHA's deadline to issue citations is six months after the inspection. After that, employers only have 15 working days to contest, attend an informal conference, or pay the designated fine.

As part of the OSHA appeals process, an employer can request an informal conference with the OSHA Area Director to discuss citations, penalties, abatement dates, or any other information pertinent to the inspection. Consult OSHA’s inspection guide for additional information.

Most wage and hour investigations by the Department of Labor (DOL) originate with an employee complaint, which is kept confidential. In addition, the DOL conducts targeted investigations of certain types of businesses or industries known for employing vulnerable workers or committing a more significant number of violations or egregious violations.

Investigations are conducted by Wage and Hour Division (WHD) authorized representatives, who gather data on wages, hours, and other employment conditions to determine compliance with the FLSA regardless of workers' immigration status.

In fiscal year 2024, WHD reported recovering more than $273 million in back wages and damages for nearly 152,000 workers nationwide.

Though business owners cannot eliminate the risk of a wage and hour audit, you can be prepared.

Below are recommended steps to help you prepare for and manage an investigation:

• Self-Audit Your FLSA Compliance: You can avoid or mitigate the burden of an investigation by regularly auditing your company's compliance. Check FLSA requirements to help you identify and resolve problems before a WHD investigation.
• Keep Required Payroll Records: Create or save electronic versions of your business's payroll records. WHD regulations state that employers must be able to produce the documents required by the FLSA within 72 hours.
• Seek Expert Advice in Advance: The DOL's enforcement agencies typically provide little advance notice to employers, so once you are informed that your business is the subject of a wage and hour audit, contact your human resources manager or employment counsel to discuss your business's rights and responsibilities. A professional employer organization (PEO), like G&A Partners, can also help ensure your employment practices comply with local, state, and federal labor laws and regulations.
• Reschedule the Audit if Needed: You can ask for additional time to gather records requested by the agency investigators or reschedule the appointment to give your business more time to prepare.
• Appoint an Audit Team: Designate a company representative or team responsible for working with the investigator during the audit.
• Gather and Prepare Documents: Assemble documentation requested by the investigator, make copies for your records, and maintain a tracking system.
• Create Space for the Investigator: Provide a quiet, private place where the investigator can work, meet with company representatives, and, if applicable, interview employees. They will research your business's compliance with the FLSA and may expand the investigation to other locations if they find a violation.
• Request an Audit Summary: Once the investigator concludes their audit, ask for an overview of their findings for your records.

If the WHD investigator identifies violations, they will recommend changes in employment practices to bring your company into compliance. In addition, the FLSA allows the DOL or an employee to recover back wages and an equal amount in liquidated damages for minimum wage and overtime violations.

EEOC has enforcement responsibility for the following federal employment discrimination laws:

• Title VII of the Civil Rights Act of 1964 (Title VII)
• The Pregnancy Discrimination Act
• The Pregnant Workers Fairness Act of 2022 (PWFA)
• The Equal Pay Act of 1963
• Title I and V of the Americans with Disabilities Act of 1990 (ADA)
• Sections 501 and 505 of the Rehabilitation Act of 1973
• The Age Discrimination in Employment Act of 1967 (ADEA)
• Genetic Information Nondiscrimination Act of 2008

An employee can file a charge(s) with the EEOC against their employer for the following reasons:

• Unfair treatment because of race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, disability, age (age 40 or older) or genetic information.
• Harassment by managers, co-workers, or others in the workplace because of race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, disability, age (age 40 or older) or genetic information.
• Denial of a reasonable workplace accommodation that an employee needs because of religious beliefs, disability, pregnancy, childbirth, or related medical conditions.
• Being mistreated or harassed because you complained about or assisted with a job discrimination investigation or lawsuit.

The EEOC will notify your organization within 10 days of a charge filing and will provide a link to the EEOC's Respondent Portal, where you can access information about the charge and investigation.

According to the EEOC's “What should I do if I receive an EEOC charge of discrimination?” though a charge does not constitute a finding that your organization engaged in discrimination, the agency has the authority to investigate whether there is reasonable cause to believe discrimination occurred.

Here is what to expect from an EEOC charge investigation and recommended actions for your business:

Charge Notice

When your business receives an EEOC “Notice of a Charge of Discrimination,” review it carefully and follow the directions in the notice. Remember that a charge is a complaint of discrimination, not a determination that discrimination has occurred.

Mediation and Settlement Options

At the start of an investigation, the EEOC will advise your company and the charging party (employee) if the charge is eligible for mediation. You can also ask your assigned investigator about the possibility of a settlement option. Mediation and settlement are voluntary resolutions.

Employer Responsibilities

Employers are encouraged to present any facts that demonstrate the allegations are incorrect or do not violate the law. You can work with the investigator to establish a new deadline if you need additional time to gather information and evidence.

NOTE: The EEOC is entitled to all information relevant to the allegations and has the authority to subpoena the information.

EEOC Responsibilities

The investigator assigned to your case will be available to answer questions about the investigation, respond to inquiries about the investigation's status, and inform you of your rights and responsibilities. They are required to conduct a timely investigation and inform you of the outcome.

Investigative Process

During the charge investigation, the EEOC investigator will request information from your company and the charging party, which could include a statement of position (“your side of the story”). They will ask about your company's personnel policies, the charging party's personnel files, or the files of individuals relevant to the investigation. The investigator may also conduct an on-site visit and interview potential witnesses. After evaluating all information, the investigator will recommend whether there is reasonable cause to believe unlawful discrimination occurred.

Letter of Determination

If the investigator determines that there is reasonable cause to believe discrimination has occurred, both parties will be issued a Letter of Determination, which invites you to work with the agency to resolve the charge through an informal process known as conciliation. If conciliation is not successful, the EEOC has the authority to enforce violations of its statutes by filing a lawsuit in federal court.

Dismissal and Notice of Rights

If the investigator determines there is no reasonable cause to believe that discrimination occurred, the charging party will be issued a notice called a Dismissal and Notice of Rights. This notice informs the charging party that they have the right to file a lawsuit in federal court within 90 days from the date of its receipt. The employer will also receive a copy of this notice.

Retaliation Protection

Whatever the outcome, ensure that the charging party is not punished for filing the charge and that no employees are punished for participating in the investigation. Retaliation is illegal, even if the EEOC concludes that the charge of discrimination does not have merit.

You can learn more about National Labor Relations Board (NLRB) investigations here.