--- title: "Q&A: How To Do an Internal Wage & Hour Audit" description: Question: Do you have any recommendations on how to conduct an internal wage and hour audit? image: https://blog.axcethr.com/hubfs/Stock%20images/Green%20Office%20Folder%20with%20Inscription%20Audit%20on%20Office%20Desktop%20with%20Office%20Supplies%20and%20Modern%20Laptop.%20Audit%20Business%20Concept%20on%20Blurred%20Background.%20Audit%20-%20Toned%20Image.%203D.jpeg --- - [Client Portal](https://www.axcethr.com/client-services/) - [Employee Login](https://www.axcethr.com/client-services/) [![AxcetHR Solutions Blog](https://blog.axcethr.com/hubfs/AxcetHR2021%20Blog/axcethr_logo_white%20(1).png)](https://www.axcethr.com/) - [About Us](https://www.axcethr.com/about-us/) - [Corporate Philantropy](https://www.axcethr.com/about-us/corporate-philanthropy/) - [Meet the Team](https://www.axcethr.com/about-us/meet-the-team/) - [Values and Culture](https://www.axcethr.com/about-us/values-and-culture/) - [Kansas PEO](https://www.axcethr.com/about-us/kansas-peo/) - [Missouri PEO](https://www.axcethr.com/about-us/missouri-peo/) - [Careers](https://axcethrsolutions.prismhr-hire.com/) - [Why Axcet](https://www.axcethr.com/why-axcet/) - [Why Choose Axcet?](https://www.axcethr.com/why-axcet/) - [About PEOs](https://www.axcethr.com/why-axcet/about-peos/) - [PEO Cost](https://www.axcethr.com/peo-cost/) - [Switching PEOs](https://www.axcethr.com/switching-peos/) - [Certified PEO](https://www.axcethr.com/why-axcet/certified-peo/) - [HR Outsource Options](https://www.axcethr.com/why-axcet/outsourcing-options/) - [Client Reviews](https://www.axcethr.com/why-axcet/client-reviews/) - [PEO Services](https://www.axcethr.com/services/) - [Human Resources](https://www.axcethr.com/services/human-resources/) - [Employee Benefits](https://www.axcethr.com/services/employee-benefits/) - [Payroll Services](https://www.axcethr.com/services/payroll-and-tax-administration-services/) - [Workers' Comp. and Employee Safety Risk Management](https://www.axcethr.com/services/workers-comp-and-employee-safety-risk-management/) - [Expertise](https://www.axcethr.com/expertise/) - [PEO Expertise You Can Trust](https://www.axcethr.com/expertise/) - [Resource Library](https://www.axcethr.com/expertise/resource-library/) - [Subscribe to the Blog](https://www.axcethr.com/subscribe-to-the-latest-resources/) - [Blog](https://blog.axcethr.com) - [Schedule a Consultation](https://www.axcethr.com/schedule-consultation/) - [Why Axcet](https://www.axcethr.com/why-axcet/) - [Client Reviews](https://www.axcethr.com/why-axcet/client-reviews/) - [Why Choose Axcet?](https://www.axcethr.com/why-axcet/) - [About PEOs](https://www.axcethr.com/why-axcet/about-peos/) - [Certified PEO](https://www.axcethr.com/why-axcet/certified-peo/) - [Options to Outsource Human Resources](https://www.axcethr.com/why-axcet/outsourcing-options/) - [Services](https://www.axcethr.com/services/) - [Complete List of Services](https://www.axcethr.com/services/) - [Human Resources](https://www.axcethr.com/services/human-resources/) - [Employee Benefits](https://www.axcethr.com/services/employee-benefits/) - [Risk Management](https://www.axcethr.com/services/risk-management/) - [Payroll Administration](https://www.axcethr.com/services/payroll-and-tax-administration-services/) - [Expertise](https://www.axcethr.com/expertise/) - [Expertise You Can Trust](https://www.axcethr.com/expertise/) - [Resource Library](https://www.axcethr.com/expertise/resource-library/) - [Blog](https://blog.axcethr.com/) - [Subscribe to the Blog](https://www.axcethr.com/subscribe-to-the-latest-resources/) - [About Us](https://www.axcethr.com/about-us/) - [Community Involvement](https://www.axcethr.com/about-us/community-involvement/) - [Meet the Team](https://www.axcethr.com/about-us/meet-the-team/) - [What We Stand For](https://www.axcethr.com/about-us/what-we-stand-for/) - [Careers](https://axcethrsolutions.prismhr-hire.com/) - [Client Portal](https://www.axcethr.com/client-services/) - [Employee Login](https://www.axcethr.com/client-services/) [![fuel-blog-logo](https://blog.axcethr.com/hs-fs/hubfs/fuel-blog-logo.png?width=310&height=97&name=fuel-blog-logo.png)](https://blog.axcethr.com) Filter Blog by Topic - [Human Resources](https://blog.axcethr.com/topic/human-resources) - [Payroll Administration](https://blog.axcethr.com/topic/payroll-administration) - [Employee Safety & Risk Management](https://blog.axcethr.com/topic/employee-safety-risk-management) - [Employee Benefits](https://blog.axcethr.com/topic/employee-benefits) - [All about COVID-19 in the Workplace](https://blog.axcethr.com/topic/covid19) - [Kansas & Missouri HR News](https://blog.axcethr.com/topic/kansas-and-missouri-hr-news) - [Kansas City Interest News](https://blog.axcethr.com/topic/kansas-city-interest-news) - [PEO/HRO](https://blog.axcethr.com/topic/peo) - Choose Topic: - [Human Resources](https://blog.axcethr.com/topic/human-resources) - Payroll Administrations - [Employee Safety & Risk Management](https://blog.axcethr.com/topic/employee-safety-risk-management) - [Employee Benefits](https://blog.axcethr.com/topic/employee-benefits) - [PEO](https://blog.axcethr.com/topic/peo) # Q&A: How To Do an Internal Wage & Hour Audit By [Jo McClure, CPP](https://blog.axcethr.com/author/jo-mcclure) on [Dec 14, 2017](https://blog.axcethr.com/qa-how-to-do-an-internal-wage-hour-audit) 3 min read [0 comment(s)](https://blog.axcethr.com/qa-how-to-do-an-internal-wage-hour-audit#comments-listing) Share this: - - - - [whatsapp://send?text=https://blog.axcethr.com/qa-how-to-do-an-internal-wage-hour-audit](whatsapp://send?text=https://blog.axcethr.com/qa-how-to-do-an-internal-wage-hour-audit) - [mailto:?subject=Q&A:%20How%20To%20Do%20an%20Internal%20Wage%20&%20Hour%20Audit&body=https://blog.axcethr.com/qa-how-to-do-an-internal-wage-hour-audit](mailto:?subject=Q&A:%20How%20To%20Do%20an%20Internal%20Wage%20&%20Hour%20Audit&body=https://blog.axcethr.com/qa-how-to-do-an-internal-wage-hour-audit) ![How to do an Internal Wage & Hour Audit](https://blog.axcethr.com/hs-fs/hubfs/Stock%20images/Green%20Office%20Folder%20with%20Inscription%20Audit%20on%20Office%20Desktop%20with%20Office%20Supplies%20and%20Modern%20Laptop.%20Audit%20Business%20Concept%20on%20Blurred%20Background.%20Audit%20-%20Toned%20Image.%203D.jpeg?width=1000&name=Green%20Office%20Folder%20with%20Inscription%20Audit%20on%20Office%20Desktop%20with%20Office%20Supplies%20and%20Modern%20Laptop.%20Audit%20Business%20Concept%20on%20Blurred%20Background.%20Audit%20-%20Toned%20Image.%203D.jpeg) Recently, we were asked if we have any recommendations on how to conduct an internal wage and hour audit? As a top PEO in Kansas City and the surrounding areas, we were happy to provide expert HR advice. Here's how to perform an internal wage and hour audit. First, kudos to you and your organization for considering this practice. Some organizations don’t conduct wage and hour audits because they can be costly and time-consuming.  However, choosing to conduct them shows that you are being proactive and trying to protect your organization from legal and financial liability due to non-compliance with the federal Fair Labor Standards Act (FLSA) and state wage and hour laws. You should conduct these audits periodically, such as at the beginning of your fiscal year, when your organization undergoes restructuring, or when there are significant changes to FLSA regulations and state wage and hour laws. [![How to Perform an Internal Payroll Audit](https://no-cache.hubspot.com/cta/default/2652187/418efec2-3765-4f8c-8ee5-6c66b1d172fd.png)](https://cta-redirect.hubspot.com/cta/redirect/2652187/418efec2-3765-4f8c-8ee5-6c66b1d172fd)As general guidelines, when you conduct an internal wage and hour audit, consider the following: ## **Determine the Nature and Scope of the Audit** Which employees, positions, and issues do you want to review? Which records will you review? For example, job descriptions, payroll records, performance documents? What changes in the law may be driving the audit? [RELATED: Fair Pay is Fair Play; How a Pay Equity Audit Ensures Compliance With New Laws >>](https://blog.axcethr.com/fair-pay-is-fair-play-a-pay-equity-audit-ensures-compliance-with-new-laws) ## **Determine Who in Your Organization Should Lead the Audit** Typically, these audits are led by a senior human resources leader or a senior company manager, though employers may choose to conduct them under the direction or guidance of inside or outside legal counsel for compliance or other legal strategy purposes. If the audit is not conducted under the direction of legal counsel, it’s always a good idea to consult your employment law counsel or tax advisor (depending on the issue) about any legal or compliance questions that may arise during the process. ## **Identify What You Want To Document About the Audit** At the very least, document the scope, purpose, and results of the audit. As a best practice, you should also document who is conducting the audit, any issues discovered, and the plan for how you will address these issues. [RELATED: Addressing the Common Issue of Pay Compression >>](https://blog.axcethr.com/addressing-the-common-issue-of-pay-compression) ## **Consider Some of the Common Issues That May Drive Department of Labor (DOL) Audits and Include Them in Your Audit** DOL audits are usually done in response to complaints received about an organization. Some of the common complaints revolve around whether: - Workers are properly classified as either: (1) [exempt or nonexempt](https://blog.axcethr.com/exempt-v.-non-exempt-whats-the-difference) from overtime, or (2) independent contractors or W-2 employees. - Overtime pay is properly calculated. - Compensable time is accurately captured and recorded. - Employees are given adequate opportunities to take meal and rest breaks. - Employers are complying with scheduling regulations and child labor laws. - Payroll practices meet various requirements. Keep in mind the DOL can conduct a wage and hour audit at any time and is not required to provide you with notice. Additionally, many factors — internal and external — could cause your organization to suddenly be out of compliance with wage and hour laws. Incorporating periodic internal wage and hour audits into your annual business practice as a precautionary measure may help minimize risks to your organization.  [RELATED: Building an Effective Compensation Strategy in Uncertain Times >>](https://blog.axcethr.com/building-an-effective-compensation-strategy-in-uncertain-times) Finally, as employment law experts at Constangy, Brooks, Smith & Prophete, LLP suggest while conducting an internal audit is important, be aware of other legal implications that could arise from the auditing process. If you discover federal or state wage and hour law violations during the audit, you could expose your company to a willful violation of wage and hour laws in subsequent litigation if you do not correct the issues immediately. Consulting with outside legal counsel during your audit process can help mitigate your risks in the event that your wage and hour practices are challenged. ## **[![Stress-Free Payroll Processing](https://no-cache.hubspot.com/cta/default/2652187/interactive-189805175855.png)](https://blog.axcethr.com/hs/cta/wi/redirect?encryptedPayload=AVxigLIA0LVS8JjIKVmiUkeeMWaMPR5eoMeo7q%2BkBcZCz%2FZvFIeaqFZ2%2Fq2%2BdIXtT4o61sR1isp94Zyy6VT6oU1yXU6TtRRrIC39UDLqle%2FJjznvJ%2FaGyE8PVu1Gd4rA1Ld4SlF%2FvRikw9Qq8sSYbayPs0A%2Bzyk0FpaMtl9K%2Fko9cGtkVOSs8KRRcLf%2Fxq3lnwjC%2Bx61puPic4drzPI2a%2F6ZPOMHQlsefAa4NfrSjhexWHRyv%2FZ0sZIg%2BDoPnqsvPr6pue9t4j0yA9sGS8zOgEoDxb2k%2FR5hSKarPpUghpxOJe5r06x1g%2BSxPULI&webInteractiveContentId=189805175855&portalId=2652187)** ## **Strengthen Your Payroll Processes with Expert Administration Support** Conducting internal wage and hour audits is essential for identifying and correcting payroll discrepancies, ensuring compliance with labor laws, and maintaining accurate employee records. These audits help businesses proactively address issues related to employee classifications, overtime calculations, and recordkeeping practices. Axcet HR Solutions offers comprehensive payroll administration services to assist small and mid-sized businesses in managing these complexities. Our team provides the tools and expertise needed to streamline payroll processes, maintain compliance, and reduce the risk of costly errors. [Learn more about our payroll administration services and how we can support your business.](https://www.axcethr.com/services/payroll-and-tax-administration-services/payroll-administration/) [![Subscribe to the Axcet HR Blog](https://no-cache.hubspot.com/cta/default/2652187/f871218e-9b82-4b84-8b15-a7045e474239.png)](https://cta-redirect.hubspot.com/cta/redirect/2652187/f871218e-9b82-4b84-8b15-a7045e474239) [![Jo McClure, CPP](https://blog.axcethr.com/hs-fs/hubfs/Jo-24.jpg?width=80&height=80&name=Jo-24.jpg)](https://blog.axcethr.com/author/jo-mcclure) Written by #### [Jo McClure, CPP](https://blog.axcethr.com/author/jo-mcclure) Jo McClure, CPP, is the Director of Payroll Administration at Axcet HR Solutions, where she has been a pivotal leader for over 20 years. With more than two decades of experience in payroll outsourcing and professional employer organizations (PEOs), Jo specializes in helping small to mid-sized businesses navigate payroll administration, employee benefits, and compliance. Her strategic leadership at Axcet focuses on implementing best practices in payroll management, compliance auditing, and risk mitigation. Jo obtained her Certified Payroll Professional (CPP) designation in 2006 and has held numerous leadership roles in the Greater Kansas City Chapter of the American Payroll Association, including President, Vice President, and Chapter Coordinator. A frequent speaker at the Midwest Regional Payroll Conference, she has also contributed articles to publications such as *Thinking Bigger Business* and *Kansas City Small Business Monthly*. Jo’s expertise has been recognized through industry publications. She co-authored the article *“High-Touch in the Age of High-Tech: How PEOs Can Embrace AI Without Losing Their Humanity”* https://peoinsider.org/articles/high-touch-in-the-age-of-high-tech-how-peos-can-embrace-ai-without-losing-their-humanity/ for PEO Insider (March 2026), alongside Jeanette Coleman, SPHR, SHRM-SCP, and authored *“PEOs in the Community: Axcet Making Philanthropy Part of the Company’s Culture”* https://peoinsider.org/articles/peos-in-the-community-axcet-making-philanthropy-part-of-the-companys-culture/ (November 2025). These contributions reflect her perspective on balancing technology-driven payroll and HR processes with the human experience, as well as the role of community engagement in building strong organizational cultures. Jo's specialties include payroll implementation, compliance auditing, and crafting best-practice payroll solutions that ensure businesses stay compliant while optimizing their processes. Published in: PEO Insider Read more [View all posts →](https://blog.axcethr.com/author/jo-mcclure) ### Get HR Updates ### Table of Contents #### [Q&A: Rumors of Elf Resignation ![Rumors of Elf Resignation](https://blog.axcethr.com/hubfs/Stock%20images/3D%20Elves%20with%20Christmas%20presents%20-%20isolated%20over%20a%20white%20background.jpeg)](https://blog.axcethr.com/rumors-of-elf-resignation) #### [![Beautiful brunette sleeping in her bed at home in the bedroom](https://blog.axcethr.com/hubfs/Stock%20images/Beautiful%20brunette%20sleeping%20in%20her%20bed%20at%20home%20in%20the%20bedroom.jpeg) How Do Employers Calculate FMLA Leave Around the Holidays](https://blog.axcethr.com/how-do-employers-calculate-fmla-leave-around-the-holidays) ## Let us know what you think... ![AxcetHR Blog](https://blog.axcethr.com/hubfs/AxcetHR2021%20Blog/axcethr_logo_white%20(1).png) - [Why Axcet](https://www.axcethr.com/why-axcet/) - [What We Stand For](https://www.axcethr.com/about-us/what-we-stand-for/) - [Expertise](https://www.axcethr.com/expertise/) - [Employee Benefits](https://www.axcethr.com/services/employee-benefits/) - [Human Resources](https://www.axcethr.com/services/human-resources/) - [Payroll Services](https://www.axcethr.com/services/payroll-and-tax-administration-services/) - [Risk Management](https://www.axcethr.com/services/workers-comp-and-employee-safety-risk-management/) - [Meet the Team](https://www.axcethr.com/about-us/meet-the-team/) - [Subscribe to Latest Resources](https://www.axcethr.com/subscribe-to-the-latest-resources/) - [Resource Library](https://www.axcethr.com/expertise/resource-library/) - [\[ Client Portal \]](https://www.axcethr.com/client-services/) - - - - - Search for: Copyright © 2023 Axcet HR Solutions – Kansas City's PEO Since 1988 | [Privacy Policy](https://www.axcethr.com/privacy-policy/) | [Terms and Conditions](https://www.axcethr.com/terms-conditions/) | [**Join our Team – Careers »**](https://axcethrsolutions.prismhr-hire.com/) 10975 Grandview Drive Suite 200, Corporate Woods Building 27, Overland Park, KS 66210 | Call us: 913-383-2999 *The IRS does not endorse any particular For more information on [certified professional employer organizations](https://www.axcethr.com/why-axcet/certified-peo/), go to [www.irs.gov](https://www.irs.gov).* Remove cookies ![](https://dc.ads.linkedin.com/collect/?pid=43031&fmt=gif) ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Jo McClure, CPP", "url" : "https://blog.axcethr.com/author/jo-mcclure" }, "dateModified" : "2025-05-06T17:47:51.828Z", "datePublished" : "2017-12-14T13:00:00.000Z", "headline" : "Q&A: How To Do an Internal Wage & Hour Audit", "image" : [ "https://blog.axcethr.com/hubfs/Stock%20images/Green%20Office%20Folder%20with%20Inscription%20Audit%20on%20Office%20Desktop%20with%20Office%20Supplies%20and%20Modern%20Laptop.%20Audit%20Business%20Concept%20on%20Blurred%20Background.%20Audit%20-%20Toned%20Image.%203D.jpeg" ], "mainEntityOfPage" : { "@id" : "https://blog.axcethr.com/qa-how-to-do-an-internal-wage-hour-audit", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://blog.axcethr.com/hubfs/_logo_axcethr_primary.png" }, "name" : "Axcet HR Solutions" } } ``` ```json { "@context" : "https://schema.org", "@id" : "https://www.axcethr.com/#organization", "@type" : "Organization", "address" : { "@type" : "PostalAddress", "addressCountry" : "US", "addressLocality" : "Kansas City", "addressRegion" : "MO" }, "aggregateRating" : { "@type" : "AggregateRating", "bestRating" : "5", "ratingValue" : "5", "reviewCount" : "100" }, "areaServed" : { "@type" : "Country", "name" : "United States" }, "award" : [ "IRS Certified Professional Employer Organization (CPEO)", "Award-Winning HR Solutions Provider", "SHRM Certified HR Professionals", "HRCI Certified HR Professionals" ], "contactPoint" : { "@type" : "ContactPoint", "areaServed" : "US", "availableLanguage" : "English", "contactType" : "Customer Service" }, "description" : "Award-winning Professional Employer Organization (PEO) providing comprehensive HR solutions, payroll services, employee benefits, and risk management to small and mid-sized businesses. Founded in Kansas City in 1988 with 35+ years of expertise.", "foundingDate" : "1988", "foundingLocation" : { "@type" : "Place", "address" : { "@type" : "PostalAddress", "addressCountry" : "US", "addressLocality" : "Kansas City", "addressRegion" : "MO" } }, "hasOfferCatalog" : { "@type" : "OfferCatalog", "itemListElement" : [ { "@type" : "Offer", "itemOffered" : { "@type" : "Service", "description" : "Comprehensive HR management services including recruitment, retention, performance management, and company culture development", "name" : "Human Resources Management" } }, { "@type" : "Offer", "itemOffered" : { "@type" : "Service", "description" : "Accurate payroll processing and payroll tax filing with dedicated payroll consultants", "name" : "Payroll Processing" } }, { "@type" : "Offer", "itemOffered" : { "@type" : "Service", "description" : "Group employee benefits management including health insurance evaluation, selection, and administration", "name" : "Employee Benefits Administration" } }, { "@type" : "Offer", "itemOffered" : { "@type" : "Service", "description" : "Workplace safety compliance and risk management solutions", "name" : "Risk Management" } }, { "@type" : "Offer", "itemOffered" : { "@type" : "Service", "description" : "Employment law compliance, regulatory reporting, and guidance from employment law attorneys", "name" : "HR Compliance & Legal Support" } } ], "name" : "HR Solutions Services" }, "keywords" : "PEO, Professional Employer Organization, HR Solutions, Human Resources Outsourcing, Payroll Services, Employee Benefits, Kansas City PEO, Small Business HR, Mid-Sized Business HR, HR Consulting, IRS Certified PEO, CPEO", "knowsAbout" : [ "Human Resources Management", "Professional Employer Organization", "PEO Services", "Payroll Processing", "Employee Benefits Administration", "Risk Management", "HR Compliance", "Health Plan Management", "Talent Recruitment", "Performance Management", "Workplace Safety", "Employment Law Compliance" ], "legalName" : "Axcet HR Solutions", "logo" : { "@type" : "ImageObject", "url" : "https://www.axcethr.com/wp-content/uploads/axcet-logo.png" }, "memberOf" : { "@type" : "Organization", "name" : "IRS Certified Professional Employer Organizations" }, "name" : "Axcet HR Solutions", "numberOfEmployees" : { "@type" : "QuantitativeValue", "value" : "50-200" }, "sameAs" : [ "https://blog.axcethr.com" ], "slogan" : "HR Support That Drives Success", "url" : "https://www.axcethr.com" } ``` ```json { "@context" : "https://schema.org", "@id" : "https://blog.axcethr.com/qa-how-to-do-an-internal-wage-hour-audit#article", "@type" : "BlogPosting", "alternativeHeadline" : "Recently, we were asked if we have any recommendations on false", "articleBody" : "Recently, we were asked if we have any recommendations on how to conduct an internal wage and hour audit? As a top PEO in Kansas City and the surrounding areas, we were happy to provide expert HR advice. Here's how to perform an internal wage and hour audit. First, kudos to you and your organization for considering this practice. Some organizations don’t conduct wage and hour audits because they can be costly and time-consuming. However, choosing to conduct them shows that you are being proactive and trying to protect your organization from legal and financial liability due to non-compliance with the federal Fair Labor Standards Act (FLSA) and state wage and hour laws. You should conduct these audits periodically, such as at the beginning of your fiscal year, when your organization undergoes restructuring, or when there are significant changes to FLSA regulations and state wage and hour laws. As general guidelines, when you conduct an internal wage and hour audit, consider the following: Determine the Nature and Scope of the Audit Which employees, positions, and issues do you want to review? Which records will you review? For example, job descriptions, payroll records, performance documents? What changes in the law may be driving the audit? RELATED: Fair Pay is Fair Play; How a Pay Equity Audit Ensures Compliance With New Laws >> Determine Who in Your Organization Should Lead the Audit Typically, these audits are led by a senior human resources leader or a senior company manager, though employers may choose to conduct them under the direction or guidance of inside or outside legal counsel for compliance or other legal strategy purposes. If the audit is not conducted under the direction of legal counsel, it’s always a good idea to consult your employment law counsel or tax advisor (depending on the issue) about any legal or compliance questions that may arise during the process. Identify What You Want To Document About the Audit At the very least, document the scope, purpose, and results of the audit. As a best practice, you should also document who is conducting the audit, any issues discovered, and the plan for how you will address these issues. RELATED: Addressing the Common Issue of Pay Compression >> Consider Some of the Common Issues That May Drive Department of Labor (DOL) Audits and Include Them in Your Audit DOL audits are usually done in response to complaints received about an organization. Some of the common complaints revolve around whether: Workers are properly classified as either: (1) exempt or nonexempt from overtime, or (2) independent contractors or W-2 employees. Overtime pay is properly calculated. Compensable time is accurately captured and recorded. Employees are given adequate opportunities to take meal and rest breaks. Employers are complying with scheduling regulations and child labor laws. Payroll practices meet various requirements. Keep in mind the DOL can conduct a wage and hour audit at any time and is not required to provide you with notice. Additionally, many factors — internal and external — could cause your organization to suddenly be out of compliance with wage and hour laws. Incorporating periodic internal wage and hour audits into your annual business practice as a precautionary measure may help minimize risks to your organization. RELATED: Building an Effective Compensation Strategy in Uncertain Times >> Finally, as employment law experts at Constangy, Brooks, Smith & Prophete, LLP suggest while conducting an internal audit is important, be aware of other legal implications that could arise from the auditing process. If you discover federal or state wage and hour law violations during the audit, you could expose your company to a willful violation of wage and hour laws in subsequent litigation if you do not correct the issues immediately. Consulting with outside legal counsel during your audit process can help mitigate your risks in the event that your wage and hour practices are challenged. Strengthen Your Payroll Processes with Expert Administration Support Conducting internal wage and hour audits is essential for identifying and correcting payroll discrepancies, ensuring compliance with labor laws, and maintaining accurate employee records. These audits help businesses proactively address issues related to employee classifications, overtime calculations, and recordkeeping practices. Axcet HR Solutions offers comprehensive payroll administration services to assist small and mid-sized businesses in managing these complexities. Our team provides the tools and expertise needed to streamline payroll processes, maintain compliance, and reduce the risk of costly errors. Learn more about our payroll administration services and how we can support your business.", "author" : { "@id" : "https://blog.axcethr.com/author/jo-mcclure#author", "@type" : "Person", "name" : "Jo McClure, CPP", "url" : "https://blog.axcethr.com/author/jo-mcclure" }, "dateCreated" : "2017-12-14", "dateModified" : "2025-05-06", "datePublished" : "2017-12-14", "description" : "Recently, we were asked if we have any recommendations on how to conduct an internal wage and hour audit? As a top PEO in Kansas City and the surrounding areas, we were happy to provide expert HR advice. Here's how to perform an internal wage and hour audit. First, kudos to you and your organization for considering this practice. Some ...", "editor" : "Jo McClure, CPP", "genre" : "Human Resources and Employee Management", "headline" : "Q&A: How To Do an Internal Wage & Hour Audit", "image" : "https://cdn2.hubspot.net/hubfs/2652187/Stock%20images/Green%20Office%20Folder%20with%20Inscription%20Audit%20on%20Office%20Desktop%20with%20Office%20Supplies%20and%20Modern%20Laptop.%20Audit%20Business%20Concept%20on%20Blurred%20Background.%20Audit%20-%20Toned%20Image.%203D.jpeg", "keywords" : "Payroll, Payroll Administration, wage and hour mistakes, common wage and hour mistakes, most common wage and hour mistakes", "mainEntityOfPage" : { "@id" : "https://blog.axcethr.com/qa-how-to-do-an-internal-wage-hour-audit", "@type" : "WebPage" }, "publisher" : { "@id" : "https://www.axcethr.com/#organization", "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://blog.axcethr.com/hs-fs/hubfs/axcethr_logo_white.png?width=225&name=axcethr_logo_white.png" }, "name" : "Axcet HR Solutions" }, "url" : "https://blog.axcethr.com/qa-how-to-do-an-internal-wage-hour-audit", "wordCount" : "4803" } ``` ```json { "@context" : "https://schema.org", "@type" : "BreadcrumbList", "itemListElement" : [ { "@type" : "ListItem", "item" : "https://www.axcethr.com/", "name" : "Home", "position" : 1 }, { "@type" : "ListItem", "item" : "https://insights.axcethr.com/", "name" : "Insights", "position" : 2 }, { "@type" : "ListItem", "item" : "https://insights.axcethr.com/tag/payroll", "name" : "Payroll", "position" : 3 }, { "@type" : "ListItem", "item" : "https://blog.axcethr.com/qa-how-to-do-an-internal-wage-hour-audit", "name" : "Q&A: How To Do an Internal Wage & Hour Audit", "position" : 4 } ] } ```