Embracing a robust DOL compliance audit process offers businesses unspeakable value, but the idea is daunting and often unfamiliar.
It’s critically important to understand the basic elements of an audit before trying to adopt a process. Audits used to determine whether a company has an effective compliance program are somewhat of a “game,” with the contractor tasked with convincing a skeptical government official that the organization has things under control with regard to EEO/AA.
What this looks like differs from organization to organization and circumstance to circumstance. What it doesn’t look like is simply showcasing “technical compliance.” Having the elements of an affirmative action program in place is only the bare minimum — what businesses actually do with those elements matters far more.
Posting a policy in the company break room, for instance, is helpful and sometimes required to ensure compliance. But audits don’t focus on whether a policy is posted and visible — they look at whether (and to what extent) that policy is being followed and applied consistently. It’s about achieving equal employment opportunity.
What a DOL Audit Involves and Requires
Just how much time and resources must be devoted to a DOL audit? In 2015, Congress found alarming evidence that the answer to that question was “too much.” Businesses with no violations saw audits lasting roughly six months, and those with even minor technical violations worked through the process for more than a year. When discrimination allegations were involved, an audit could take up to four years.
The good news? When a business undergoes a DOL audit, no one goes to jail or incurs fines — the DOL doesn’t actually have the authority to levy fines. However, the agency regularly enters into DOL settlement agreements and consent decrees, and it frequently wins court orders involving invasive monitoring of employment practices that allow it to collect damages for alleged discrimination victims, which can quickly reach six or seven figures.
There’s also the matter of public relations issues that can arise during and because of an audit. Because DOL publishes all financial agreements on its website and regularly issues press releases about discrimination settlements, a company’s issues become public knowledge. As a result, those reports can lead to criticism and reputational damage.
Perfecting the Compliance Audit Process
How can compliance professionals prepare for and perform well during a robust DOL compliance audit process? What do they need to do before submission or to prepare for follow-ups before or after an on-site visit?
They don’t need law degrees, but they do need a deep understanding of the underlying goals of equal employment opportunity and affirmative action. The what is fairly useless without the why. Every audit seeks to answer core questions about a company’s culture, so every answer must show that the company has an active culture of inclusivity.
While it helps for businesses to demonstrate sincere, good-faith efforts to comply, that effort can be all for naught if compliance professionals can’t sell it. Because of this, they have to be able to control the conversation and show receipts for how they are working to make their organizations EEO and AA compliant.
Compliance professionals should also routinely perform mock audits to test how prepared they would be in a real-world audit. More than anecdotes and persuasive conversation, data and documents tell the story of how hard a company is working to be compliant. Preparing for an audit can quickly show compliance professionals any existing holes in their documentation and records.
Too many compliance professionals only engage in the hard work of compliance if and when they get notice of an audit, but it doesn’t have to be this way. By actively working toward and preparing for audits, they help ensure nothing comes as a surprise when they’re asked to show whether an effective compliance program is in place and checks all the boxes.
Ultimately, compliance professionals must be prepared to speak with confidence about their compliance efforts. The individuals in charge of compliance programs must be ready, willing, and able to show that they abide by that truth in their organizations. There is no reason to let fear or anxiety hinder the DOL audit process. Instead, compliance professionals should see audits as opportunities to interact with regulators personally while showcasing the hard work they’re doing to create actively diverse and inclusive workplaces.
Interested in making sure your organization has an effective compliance program in place today? Uncover any issues by performing a mock audit at your company.