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With Halloween tomorrow, I thought it would be the perfect time to tell a scary story to my HR tech friends. To clarify, I am just retelling of the horrors one Lockton client experienced in hopes that others might avoid a similar fright.

A client recently received the following email from their HR/payroll vendor and called us in a state of panic:

Good Afternoon,

 First and foremost, I want to thank you for being a valued client of VENDOR!

 I’m your assigned HR representative. As part of VENDOR value, I would like to meet with you to help educate you on the Department of Labor’s (DOL) new Plan/Prevent/Protect initiative. This initiative compels businesses of any size to maintain documentation regarding labor and OSHA compliance, keep up with training initiatives to support your documents, and to assign on-site individuals responsible for maintaining the program. Though this initiative has been in place since 2010, funding for enforcement was not made available until July 2013, providing for more than 900 new auditors to seek out violations and generate fine and penalty revenue for the federal government.

 One piece of P3 is extensive, unannounced enforcement audits to be conducted by the 900 newly hired Department of Labor agents/auditors. They are currently inspecting random zip codes to ensure you are compliant with this program and should you be out of compliance, the fines are astronomical. We have already seen the impact of this program locally. The DOL is estimating that for every dollar invested in staffing for this program, they’ll generate $9 back in fines and penalties for non-compliance (this means the average auditor, earning approximately $50,000, will generate an estimated $500,000 in fines for the DOL each year). If a DOL auditor were to walk through your doors tomorrow and ask to take a look around, would you be prepared?

 The purpose of our meeting is to review what P3 is, how it will impact your business and make sure you are not at risk for any fines or employee claims. We will also review your benefits and tax liability to see if we can save you time or money in that area.

 Wow; it’s no wonder our client was scared! It’s quite the shock to learn you’re about to be audited by the DOL and could be at risk for potential fines. With all of the Affordable Care Act (ACA) regulations and compliance requirements, another pending audit is terrifying.

To be honest, when we first saw this email, we were a bit scared for our clients and the mess that this might create for them as well. We decided to reach out to our Compliance Practice, HR Consulting team and a few DOL representatives to gain a better understanding of this provision and set the facts straight.

In various conversations with the DOL, we’ve learned the email above is inaccurate and borderline fraud. It seems the author of the email is using general terms (i.e., labor) and letting the reader jump to conclusions and confusing OSHA with EBSA. We’ve been told that of the approximately 1,200 personnel in the entire agency, only 450 are audit personnel (which is significantly different than what the vendor stated in the email). It’s important to note that the DOL rarely “fines” employers and the recovered money is returned to plan participants. If you’re interested, the DOL/EBSA has an Enforcement Manual that is publicly available. You can also find more specifics on the Plan/Prevent/Protect initiative here.

For what it’s worth, we are disappointed with this vendor. The vendor’s reasoning for distributing this communication is beyond us. We can only assume the vendor is trying to scare clients into buying more services they don’t need.

If you have received this email or a similar one, we suggest focusing on other more pressing business issues. Keep your labor and OSHA compliance records up to date. We will keep monitoring the Plan/Prevent/Protect initiative, and if business processes need to be monitored, we will communicate that to our clients.

This Halloween, you should be scared of ghosts, goblins, zombies, witches (even the ACA ghouls), but not the DOL!

We hope you haven’t been a victim of this scare tactic. If you have received a communication like this from your HR technology vendor and would like to discuss the matter further, let us know. You can comment below or shoot an email to