DOL Audit

LindaS

We just received notification from the DOL that one of our 401(k) plans as well as one of our Health Insurance Plans are being audited. This is a result of an employee complaint regarding payment of benefits to both.

Can anyone tell me what to expect regarding these?

pork1

You can expect a very detailed look at your plans and the actions of your plan administrators/Board of Directors. You will never be told the specifics of the complaint and they will look at everything. You can just bet your personnel pay records will be looked into very deeply, from this they will glean the necessary information they will need to find your company "guilty or innocent" of the specific charges, which will be so sluttered with other findings of minor concern that the main purpose or complaint will not be recognized nor will the person who made the complaint be identified. After they get through, go about correcting the issues raised, correct the error of our ways in dealing with these areas of concern, pay the fines, and penalties and then move on, but learn from the mistakes and put new policies and procedures in place to make sure the situation never comes your way again!

Good luck and don't worry even this too shall pass!

PORK

LindaS

When you say, "personnel pay records" are you meaning payroll records? I was under the assumption that they are going to be examining payment of 401(k) and health insurance claims.

Crout

The idea is that if you make them come out to your business they will make it worth their while. So they will look at anything even remotely relevant. Unless your records are completely pristine and in order, (which never happens) you WILL be paying some fines.

sonny

and even remotely relevant can be a stretch. Be prepared for them to find something.. Good luck, not a lot of fun.

pork1

Yes, I mean payroll records, on which they will find documented 401K contibutions, while looking at that they will find hours worked and payments covered by FLSA & overtime payments, they'll find direct deposits, bonuses, tax and garnishments.

If you can keep them out of an individuals personnel files where you probably store evaluations and pay increases and formal letters of performance instruction, you maybe able to keep the audit specific to payroll and time cards. When the investigator wants something be prepared to get the specific document that the investigator asked you to get, do not give him/her the personnel file so they look and see other information.

If you can cause your computer system to "spit out" group records of specific information then do that, if you can't then spend the time necessary to obtain the singular document. Be supportive of the auditors, but protect the company as best you can!

In my last audit, it was overtime for computer driven artist, who the department director/owner required these employees 12 of them to be salaried and classified as EXEMPT. I tried to tell him what it should be but he refused to allow me to change their classification. The audit was set as 401K distribution of contributions issue. We had no findings in the 401K programs, however, we paid thousands of $0llars in back overtime payments to artist who were nothing more than computer operators creating carpet design from management created patterns. They could create new carpet designs in a minute, one design builds on another, there is nothing new. There were also penalties paid by the company.

Good Luck, keep us posted on your outcome!