Enterprise-wide independent monitor: Compliance with the Fair Labor Standards Act of 1938

Large restaurant chain

Alleged noncompliance with Fair Labor Standards Act

Services performed
Team of forensic accountants perform investigations through independent monitoring

Company became compliant and implemented a training program to prevent future noncompliance
THE SITUATION Our client, a family-owned and -operated restaurant and sports bar with locations and operations in Pennsylvania and New Jersey, was sued in the United States District Court for the Eastern District of Pennsylvania by a named defendant alleging noncompliance with several wage and hour regulations. Subsequently, our client agreed to the judgment without contest. In doing so, the company agreed to certain injunctive relief, in addition to engaging a professional services firm as an enterprise-wide monitor. The monitor’s purpose is to perform site visits, procedures and tasks designed to determine the company’s adherence to the judgment and specific sections of the Fair Labor Standards Act of 1938.

Grant Thornton LLP was engaged by the company to provide enterprise-wide monitoring services in this matter. Our job was to conduct, without advance notice, inspections of restaurant locations, in addition to analyzing records, books, time records and time-recording devices to assess compliance with the act and the judgment. In doing so, we were asked to provide forensic accounting and advisory services, and offer our findings, conclusions and recommendations.

WHAT THE TEAM DID Grant Thornton’s forensic accountants analyzed the company’s payroll and timekeeping processes, and worked with company management to improve processes and implement training for all staff. We visited and performed on-site inspections of numerous locations. We performed interviews of randomly selected managerial and non-managerial employees, and determined that the company was in compliance with the act and the judgment.

OUTCOMES The company became compliant with its regulatory requirements and obligations to employees under the act, strengthened its compliance management system, and internal financial controls. Further, the company implemented a process to train staff of their rights under the Fair Labor Standards Act of 1938.

Contact Frederick J. Kohm Jr.
Partner and Philadelphia Practice Leader
Forensic, Investigations and Dispute Services
T +1 215 376 6040<