Internal pay audits are rarely enjoyable. Depending on the scope, these audits can be complex and require detailed analysis. However, in the current legal climate, an internal audit can be extremely valuable and greatly reduce, or even eliminate, potential liability for wage and hour claims as well as pay equity claims. As previously reported on this blog, increased scrutiny into pay equity discrimination, changes in EEO-1 reporting requirements, the Department of Labor’s joint employment efforts, and the updated FLSA exemption rules continue to place companies at greater risk of government audits, fines, and lawsuits.
Many employers may have already reviewed and updated their policies in anticipation of the changes to the “white collar” FLSA exemptions, which go into effect on December 1, 2016. But if your company has not yet done so, or to the extent you have not conducted a more comprehensive internal audit, your company should strongly consider doing so as soon as possible for several reasons.