HomeMy WebLinkAboutItem 11g - Fair Labor Standard Act Auditing Services
DATE: October 1, 2024
TO: Honorable Mayor and City Council
FROM: Anely Williams, Interim Human Resources Director
By: Sairy Stepanian, Human Resources Manager
SUBJECT: PURCHASE ORDER WITH LIEBERT CASSIDY WHITMORE FOR
AUDITING SERVICES RELATED TO THE FAIR LABOR STANDARDS
ACT (“FLSA”) IN AN AMOUNT NOT TO EXCEED $125,000
CEQA: Not a Project
Recommendation: Approve
SUMMARY
As part of the Fiscal Year 2024-25 Operating Budget, the City Council approved a New
Project for auditing services associated with the Fair Labor Standards Act (“FLSA”). To
take proactive measures and ensure adherence to the provisions set forth by the FLSA,
a comprehensive assessment of the City’s practices is necessary.
The City of Arcadia currently contracts with the law firm of Liebert Cassidy Whitmore to
provide an array of personnel-related legal services. In consideration of the already
existing legal services agreement, it is recommended that the City Council approve a
Purchase Order with Liebert Cassidy Whitmore for comprehensive auditing services
pertaining to the FLSA, in an amount not to exceed $125,000.
BACKGROUND
The FLSA was enacted in 1938 to provide protection to eligible workers for matters related
to wages, overtime compensation, and payroll recordkeeping practices. Periodic
amendments to the FLSA have been implemented to address changes in workplace
expectations and practices. Although amendments to the FLSA do occur, including as
recently as 2024, legal determinations that are based on the FLSA can occur more
frequently than formal amendments. Ensuring the City’s practices keep pace with these
complex legal rulings and formal amendments is necessary to ensure full compliance with
the law.
In 2011, the City conducted a formal FLSA audit. The professional audit and
comprehensive review resulted in a detailed report that was based upon information
Purchase Order for FLSA Audit
October 1, 2024
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gathered through interviews, fact finding, and inspection of documents provided by the
City. The results of the audit encompassed recommendations on best practices and policy
samples to ensure compliance with the FLSA.
Generally, it is good practice for agencies to conduct a periodic FLSA audit of internal
practices to capture changes in the FLSA and legal determinations. In consideration of
the 13 years that have elapsed since the City’s last FLSA audit, an updated
comprehensive audit is necessary.
DISCUSSION
To ensure a fair and comprehensive approach, the audit will involve the participation of
all departments during the data gathering phase. The audit will also entail a detailed
review of various pertinent Human Resources and Payroll practices, with respect to the
FLSA and any changes that have occurred since the City’s last audit. The resulting report
will inform the City of best practices to ensure ongoing compliance with the provisions of
the FLSA.
The City of Arcadia currently contracts with the law firm of Liebert Cassidy Whitmore
(“LCW”) to provide an array of personnel-related legal services. The legal services
agreement provides flexibility in that the necessary annual amounts are established in the
Human Resources Department’s Operating Budget, which can vary depending on the
needs of the City in any given year. LCW conducted the 2011 FLSA Audit for the City and
does this type of work for many agencies throughout the state.
The decades’ long professional relationship between the City and LCW, combined with
the existing contract, are conditions that make it more favorable for the City to immediately
commence the intended FLSA audit. Notably, having conducted the City’s last FLSA
audit, LCW is equipped with access to historical information and familiarity with the City’s
systems. LCW’s knowledge and understanding of the City will expedite the audit and
reduce costs through an efficient and timely project onboarding process. Accordingly, it
is recommended that the City Council approve a Purchase Order under the existing legal
services agreement with LCW for a comprehensive FLSA audit, in an amount not to
exceed $125,000.
ENVIRONMENTAL ANALYSIS
The proposed action does not constitute a project under the California Environmental
Quality Act (“CEQA”), as it can be seen with certainty that it will have no impact on the
environment.
Purchase Order for FLSA Audit
October 1, 2024
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FISCAL IMPACT
The comprehensive FLSA audit will not exceed $125,000 and sufficient funds have been
allocated in the Human Resources Department’s Fiscal Year 2024-25 Operating Budget
for this expense. An updated FLSA Audit resulting in necessary changes to City policies
and procedures is expected to save substantial legal and other costs over time.
RECOMMENDATION
It is recommended that the City Council determine that this action does not constitute a
project under the California Environmental Quality Act (“CEQA”); and approve a Purchase
Order with Liebert Cassidy Whitmore for Auditing Services related to the Fair Labor
Standards Act (“FLSA”) in an amount not to exceed $125,000.