Complaints concerning Investigation for Compliance with Fair Labor Standards Act

HRD-78-113: Published: May 16, 1978. Publicly Released: May 16, 1978.

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Certain allegations were made by an officer of a firm with regard to the GAO report concerning the Department of Labor's investigation of his enterprise for compliance with the minimum wage and overtime provisions of the Fair Labor Standards Act. GAO did not contact the officer or his accountant regarding the allegations. Direct contact with the employer was considered inappropriate because at that time the case was under investigation with potential for litigation to enforce payment for unpaid back wages. Contrary to the officer's contention, the report neither stated nor implied that his stores were subsidiaries of the Tandy Corporation. Labor's use of the rolling (or tumbling) quarter method in computing the officer's annual gross volume of sales was consistent with applicable provisions of the Fair Labor Standards Act. Wage and Hour (WH) Publication 1308 adequately describes this method of determining coverage under the act. Despite any shortcoming of WH Publication 1308, both the officer and his accountant had specific knowledge of the rolling quarter method of computing annual gross volume of sales. However, the officer was correct in his contention that WH Publication 1308 does not spell out an employer's specific rights to a higher-level review or administrative appeal in the event of disagreement with compliance procedures or findings. Contrary to the officer's contention, the compliance officers applied published rules in determining that two employees did not qualify for exemption from minimum wage and overtime pay requirements.

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