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May 04, 2010
Why an Employer Should Conduct an Exemption Audit

In a BLR webinar entitled "Exemption Audits: Prepare Now for Stepped-Up Department of Labor (DOL) Enforcement -- Who's Entitled to Overtime and Who's Not," Cheryl D. Orr, Esq. partner and co-chair of the national Labor and Employment Practice Group at Drinker Biddle & Reath LLP explained that, in addition to a good business practice, being sure employees are properly classified is important because:

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  • Federal regulators are going for broke and looking for donors. Don't volunteer your company!
  • Exemption cases are particularly amenable to class certification.
  • There is a three-year statue of limitations under the Fair Labor Standards Act (FLSA) when there is willful conduct.
  • If employees are misclassified, the damages can be significant and attorneys fees high.

In addition, if employees are classified as exempt but are not, the company will be at the mercy of the employee's best recollection of when they worked, which may contradict the company's records.

Cheryl D. Orr, Esq. is a partner and co-chair of the national Labor and Employment Practice Group at Drinker Biddle & Reath LLP. She concentrates her practice on defending employers against FLSA collective actions and state and federal wage and hour class actions. She regularly litigates discrimination, harassment, and unfair competition claims, conducts high-level workplace investigations, develops plans for reductions in force and offers employer advice and counseling.

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