Article contributed by Steven R. Nevolis, Ellenoff Grossman & Schole LLP
All of these agencies investigate different areas of compliance relating to how employers treat their employees. In the past year or so, these agencies have seen a major shift in enforcement priorities, staffing, and funding. However, they all have one common theme – once they begin an investigation, it will take months, even years, for it to be complete. In fact, during the investigations, employers would be forgiven to believe that the process itself is the actual punishment.
Since it’s not a matter of if, but when an employer will be part of one of these investigations, employers need to establish best practices to navigate these issues.
For the last several years, all of these various agencies seem to be operating with as broad a scope as possible, along with short-staffing that is common in most government agencies. This inevitably led to a backlog where cases would sit for at least a year before an investigation would even begin. This left employers puzzled as to what to do when they received a notice of investigation – to the employer the issue in question had long since resolved itself, only to now be resurrected.
The federal, state, and local governments have taken different approaches in the past year to combat these issues. At the federal level, investigative agencies have narrowed the topics they intend to prioritize, such as the EEOC shifting focus to DEI issues, and the NLRB removing a litany of topics from their investigations list (such as investigating certain workplace policies). At the state and local level, agencies have not narrowed their scope but rather have re-assigned investigations from busier regions to less busy offices to move the investigations along, or sought additional funding to secure more investigators. In fact, the new mayoral administration in New York City has announced additional funding for the New York City Commission on Human Rights specifically to alleviate the backlog.
When employers receive a notice of investigation from any of these agencies, the employer is expected to provide the agency with evidence to refute the claims. This generally means one thing – documentation. What type of documentation will surely depend on the subject of the investigation, but it’s always best practice for employers to prepare and maintain documents in any area that may be a hotbed for legal compliance investigations.
Specifically, in the employment field, employers should ensure they have documentation relating to the following topics, just to name a few:
- Anti-discrimination and anti-retaliation policies;
- Complaint investigation procedures;
- Policies relating to use of sick time and other protected leave;
- Wage statements and other wage-related records;
- Time clock data that is made contemporaneously to when an employee clocks-in and clocks-out
Once an employer puts into place all this documentation, it must also ensure that these documents are saved for three to six years, depending on the subject of the documentation. Ultimately, if an employer doesn’t have documentation to refute the claim of a former employee or an investigative agency, it’s almost as though the employer can never prove that the allegations are false. Not having that documentation creates an uphill battle.
After lack of documentation, the biggest area that creates liability in investigations is lack of manager training. Managers are an employer’s front line to its employees and managers must have extensive knowledge of their expectations under the various employment laws. In fact, if a manager has knowledge of a potential violation of an employment law, then the employer itself is considered to have knowledge of that violation as well. By establishing a process of new manager training and annual training for existing managers, employers can ensure these managers are equipped with the knowledge to navigate these scenarios.
Finally, when an employer receives a notice of investigation, it should seek to cooperate with the investigators and provide timely, reasonable responses to their requests. Nothing makes an investigation difficult as quickly as obstructing an investigator’s attempt to retrieve information or not responding at all. These agencies have wide latitude when it comes to the jurisdiction they cover, and employers generally need to cooperate as a condition of their business license. To that end, it’s important to bring in legal counsel as the beginning of the investigation to ensure it’s done correctly.
Investigative agencies aren’t going away anytime soon – they are simply changing the way they operate. But the gameplan for employers remains the same – document, train managers, and reasonably cooperate.
Steven R. Nevolis is a Partner in the Labor & Employment Group at Ellenoff Grossman & Schole LLP.
His practice encompasses a broad spectrum of services for management-side clients, including employment litigation and class actions, employment law compliance counseling, and traditional labor work in unionized work forces.
He seeks to serve as an indispensable resource for his clients in analyzing, advising, and resolving any and all matters related to labor and employment law, allowing his clients’ businesses to operate with minimal disruption. Mr. Nevolis can be reached at (212) 370-1300 or snevolis@egsllp.com.
