5 Tips for Preparing Your Clients for Department of Labor Audits

Department of Labor Audit

The Department of Labor (DOL) can conduct an audit on your clients’ companies at any time, with or without warning. Since they are in charge of enforcing ERISA, Fair Labor Standards Act items, and FMLA, there are a lot of things to keep track of in order to stay in compliance at all times.

Maintaining compliance is non-negotiable. Not only do these standards exist for the best interest of your clients’ employees and businesses, there are serious penalties issued for violations. The DOL can issue fines up to $1,000 for some violations, but up to $10,000 for serious labor violations like breaking child labor regulations.

Whether they know an audit is coming soon or not, your clients should be prepared at all times. Here are five tips you can give them to ensure they will pass a DOL audit at anytime.

Update Policies and Documents Regularly

Out-of-date policies are a huge red flag for organizations during audits. Your clients should be able to quickly and confidently provide evidence that they are in compliance with the DOL through their policies. These policies include basic employee records, Summary Plan Descriptions (SPDs), payroll records and more. These policies and documents should be updated immediately upon any changes to ensure that no information is inaccurate. Regularly check in on these documents to ensure no updates were missed.

Self-Audit Periodically

The best way to know if your clients are prepared for an audit is for them to put themselves through one. The DOL has resources about what kind of things they look for during audits, so your clients can make comprehensive checklists. Then, they can perform self-audits and uncover any issues and correct them before the DOL gets to them first.

Assign Compliance Roles

It’s easy for compliance to fall off the radar when nobody thinks they are personally responsible for it. Recommending that your clients assign specific compliance roles increases accountability and breaks up the daunting task into manageable chunks.

Act Quickly When Errors Arise

When your clients discover any discrepancies or errors during self-audit, it’s important that they act immediately. Recommend that they document what the issue was, the action taken, and how it was resolved. This gives them a database to learn from while ensuring that they issues are corrected before an audit is conducted.

Consider an ERISA Wrap Document

Under ERISA requirements, every single plan is required to have a Summary Plan Description (SPD). However, creating and maintaining multiple SPDs is time-consuming and can often lead to human error. Take this burden off your clients by recommending an ERISA wrap document, which combines all SPDs into one document. This ensures that all necessary information for each document is provided, while reducing the manual labor associated with maintaining compliance. Additionally, documents can be edited just by editing the ERISA wrap document, rather than having to update each individual document (where applicable).


DOL audits are something that your clients should be taking very seriously. But with your help, they should not be feared. Offering them these tips will help them make sure they are always in good standing with the DOL and can avoid any detrimental penalties, as well as provide the best possible HR experience for their employees.