DOL Audit

DOL AuditWhen you own a business, you should know what a Department of Labor Audit (DOL audit) is. There are certain laws that businesses must abide by and it is important to understand what those laws are and what happens if you violate those laws, even accidentally. At PolicySmart, we understand the importance of running a company and ensuring you are following the law. To learn more about an audit and how we can help you, please give our office a call. You always want to make sure your business is on top of things. 

What are these audits?

If you are unfamiliar with these audits, they are conducted by the Department of Labor. The purpose is to ensure that working conditions are fair and that employees are not being overcharged by holding vendors/advisors for their 401(k) or 403(b) retirement plans. Thus, the DOL performs audits and if your fees are not in line with your peer groups, they will penalize you as an entity and personally. 

What happens during these audits? 

There are multiple types of audits and each one will not be the same. That said, there are similarities you can expect. One of the most common types of audits that occurs is known as a Wage and Hour Division audit. During this type of audit, the DOL will look at employee records and the rights at your company. They will look at factors such as suitable working hours for underage employees or compensation for overtime-eligible employees. If there are no violations, you will not receive any penalties. Another audit reviews retirement vendor fees.

Can you be criminally prosecuted for any violations?

It is certainly possible to be criminally prosecuted because of failing to comply with labor laws or enabling high fees. That said, an audit from the DOL would have to turn up evidence that you were willfully violating the law in certain instances. Typically, violations are derived from negligence or neglect and would only yield penalties and punishments, not criminal prosecution. 

Will I know that a DOL audit is coming? 

In some cases, you will have prior warning that an audit is coming. You may receive a letter telling you that someone from the DOL will show up. However, it is possible the DOL will come without telling you in advance. 

Give Our Office a Call To See How We Can Help You

When you are unfamiliar with these audits, they can seem quite daunting. If you have any more questions regarding an audit from the DOL, please contact PolicySmart® at  (888) 873-1982.