Department of Labor Investigations

Many government contractors will find themselves the subject of an investigation by the Wage and Hour Division (WHD) of the Department of Labor (DoL).  The investigations are conducted as outlined in the WHD's Field Operation Handbook.  A quick review of the handbook demonstrates the need for experienced guidance through the investigation process.  Our lawyers have extensive experience guiding clients through DoL investigations.

Just because a DoL investigator says you owe money doesn’t mean you do.  We assist our clients in identifying mistakes and weaknesses in the investigator's analysis.  After our lawyers analyze the bases for the DoL's claims, we provide you with a clear and objective assessment of your liability.  Even if we conclude that you have financial liability for unpaid obligations under one or more of the complex labor laws, we can assist you with negotiating a favorable settlement with the DoL.

A DoL investigation should be taken very seriously.  For a government contractor, violation of labor laws may have devastating results.  Penalties for violating the Service Contract Act can result in liability for unpaid wages and fringe benefits, contract termination and liability for any resulting costs to the Government, legal action to recover the  underpayments, and debarment from future contracts for up to three years.     

The key to successfully navigating a DoL investigation and to minimize its impact on your company is to know your rights and your obligations.  

You will be notified by letter of the DoL investigation.  As in the following example, the first paragraph of the letter is introductory and will identify the specific government contract(s) at issue: 

• The Wage and Hour Division (WHD) of the U.S. Department of Labor is responsible for administering and enforcing a number of federal labor laws including the Fair Labor Standards Act (FLSA) and the McNamara-O’Hara Service Contract Act (SCA). We also have certain responsibilities under the Davis Bacon and Related Acts, the Contract Work Hour and Safety Standards Act, the Family and Medical Leave Act and the Immigration Reform and Control Act of 1986 (IRCA). This investigation focuses specifically on your contract with the Department of Veterans Affairs in Pittsburgh, PA providing services under contract number... 

As in the following example, the second paragraph of the letter will provide an overview of the process:

• In the usual case the following steps are taken during a review: 1) an opening conference is held with the employer, 2) pertinent records are inspected to determine coverage, exemptions, and status of compliance, 3) a representative number of employees are interviewed, and 4) a closing conference is held to discuss the findings of the review.  Due to COVID-19 there will be no site visit. This investigation will take place electronically and via phone. 

The third paragraph will provide a list of required documents and information:

• 1) Names, addresses, social security numbers, telephone numbers, and job classifications for all persons employed under the contract listed above throughout the contract period.
• 2) All weekly certified payroll reports for all such workers for the same time period.
• 3) Documentation of contributions to health and pension fringe benefit plans for the same time period.
• 4) Copy of the contract including contract stipulations, inclusive of labor standards and prevailing wage requirements, as well as the applicable wage determination. 
• 5) Complete the enclosed Employer Information Form.

The initial letter will also provide the contact information for the investigator, as well as the deadline and method for submitting the required documents and information.

Upon receiving notice of the DoL's investigation, a government contractor would be wise to quickly obtain legal representation.   Please call us at (202) 609-7386 or send an message if we can be of assistance.