When the Department of Labor investigates your drivers' pay: the visit, the records, and back wages

How a Wage and Hour investigation starts

Many Wage and Hour Division investigations start with a complaint from a worker, and WHD keeps complaints confidential. It may not even confirm that one exists. Others come from targeted reviews of industries with high violation rates or vulnerable workers, or of a particular area, and WHD generally does not say which kind yours is (Fact Sheet 44).

The law behind the visit is broad. Investigators may enter and inspect workplaces and records, copy records, and question employees about wages, hours, and working conditions (29 U.S.C. 211(a)). They do not need to call ahead, and some arrive unannounced to see a normal day. The rules they check against, from minimum wage on per-trip pay to paid waiting time, are in the NEMT driver pay guide and the overtime guide.

What happens during the visit

A WHD investigation follows the same steps in most cases:

1. Opening. The investigator shows credentials, explains the process, and lists the records needed.
2. Coverage. The investigator confirms the law applies, looking at annual sales volume and interstate activity.
3. Records review. Payroll and time records are examined, with notes, transcriptions, or copies taken.
4. Interviews. Drivers and other employees are interviewed privately, usually at the workplace, sometimes by phone, by mail, or at home, to check the records, job duties, and any exemption you claim.
5. Final meeting. The investigator meets someone with authority to commit the company to changes, explains any violations, and says how to fix them. If back wages are owed, the investigator asks for payment and may ask you to calculate the amounts.

You may have an accountant or a lawyer with you at any point, and you may present more facts after hearing the findings.

The records you will be asked for

Expect to produce payroll records and time records first. Payroll records and the employee data they hold must be kept at least three years, and daily time records, rate tables, and records of customer billings at least two (29 CFR 516.5 and 516.6). The full list of what to keep and for how long is in how long to keep employee records.

Records must be available for inspection and transcription. If you keep them at a central office instead of where drivers work, you have 72 hours from the request to make them available (29 CFR 516.7).

For a NEMT company, the trip records matter as much as the timecards. Before you hand anything over, compare each driver’s clock-in and clock-out times with the first pickup and the last drop-off in your trip log. A pickup logged before clock-in, or a return trip finished after clock-out, is unpaid time on paper.

What WHD has found at NEMT companies

The Department of Labor has announced several cases against medical transportation companies, and the same few practices come up:

• KDK Transport Co., Coeburn, Virginia (July 2024). WHD found the company wrongly applied the motor carrier exemption and did not add up all hours worked, including driving and wait times, when computing overtime. It recovered $170,439 for 60 drivers.
• American West Medical Transport, Elk Grove, California (December 2019). Drivers were paid flat salaries no matter how many hours they worked, and hourly workers got straight time for overtime hours. The company agreed to pay $147,416 to 36 employees.
• Miami Beach Medical Transport, Florida (July 2018). Drivers were not paid for time spent at home calling patients to confirm the next day’s route, and the company deducted 30 minutes for lunch every day whether or not drivers got the break. It paid $222,059 to 53 employees.
• Travelon Transportation, Eden Prairie, Minnesota (June 2023). The company treated drivers as independent contractors and deducted van leasing, insurance, maintenance, dispatch, and tablet fees that sometimes pushed pay below minimum wage. It refused to comply with WHD’s findings, the Department sued, and after a five-day jury trial the court awarded 21 drivers $254,628 in back wages and liquidated damages.

Why the motor carrier and taxicab exemptions rarely fit NEMT work, and how bonuses enter the overtime rate, are covered in the overtime guide. The contractor question is in classifying NEMT drivers, and deductions for vans and damage are in charging drivers for accidents or damage.

How far back do back wages go?

Back wages reach two years back, or three years when the violation was willful (29 U.S.C. 255). WHD’s penalty rule describes willful as knowing the conduct was prohibited or showing reckless disregard, which includes not looking further into whether a pay practice was legal when you should have (29 CFR 578.3(c)).

As an example, take a driver who works five 10-hour shifts a week while the timekeeping system docks a 30-minute lunch from each one, and the driver rarely gets the break. Payroll shows 47.5 hours when the driver worked 50. The missing 2.5 hours each week all fall past 40, so each is owed at time and a half, for every week in the two-year lookback or three years if the violation is found willful.

What you pay besides back wages

What else you owe depends on whether the case settles or goes to court:

• In a WHD settlement, only unpaid minimum wages and overtime. Since June 27, 2025, Field Assistance Bulletin 2025-3 bars WHD from asking for, accepting, or using liquidated damages as a bargaining chip in any case it resolves before a lawsuit.
• In a lawsuit by the Department or the drivers, the unpaid wages and the same sum again as liquidated damages (29 U.S.C. 216(b) and (c)). A court may reduce or deny the liquidated damages if you show you acted in good faith and had reasonable grounds to believe you were following the law (29 U.S.C. 260).
• Civil money penalties when minimum wage or overtime violations are repeated or willful, capped at $2,515 for each violation (29 CFR 578.3). There was no inflation increase for 2026, because the October 2025 price data the formula requires was never published, so the 2025 figure still applies. A violation counts as repeated when WHD or a court has already told you about a prior one.

WHD sets a penalty by weighing how serious the violations were and the size of your business, and it may also consider good faith efforts, your explanation, past violations, your commitment to comply, how many workers were affected, and any pattern (29 CFR 578.4). You have 15 days from receiving the penalty notice to file a written exception and request a hearing; otherwise the penalty becomes final with no further review (29 CFR 580.5 and 580.6).

Paying back wages through WHD

Back wages are usually paid under WHD’s supervision, and that matters to you. When a driver agrees to accept the payment and it is paid in full, the driver waives the right to sue for those wages and the matching liquidated damages (29 U.S.C. 216(c)). Payments you make before WHD has reviewed the amounts do not carry that effect.

Employers pay WHD through Pay.gov, using the back wage payment form for the WHD region handling the case. WHD then distributes the money. It keeps looking for workers it cannot find and holds their back wages for three years before sending them to the U.S. Treasury. Former drivers can search for money owed to them in WHD’s Workers Owed Wages tool, and since October 1, 2025 WHD pays those claims electronically.

Do not punish the drivers who talked

Firing or otherwise penalizing a driver for complaining about pay, or for helping an investigation, is a separate violation. The protection covers oral complaints as well as written ones, and it covers former employees. A driver who is retaliated against can recover reinstatement, lost wages, and an equal amount in liquidated damages (Fact Sheet 77A). Safety, billing fraud, and privacy reports carry their own retaliation protections, covered in whistleblower protections for NEMT drivers.

Fixing it before WHD calls: the PAID program

WHD’s Payroll Audit Independent Determination program lets an employer that finds its own minimum wage or overtime problems pay them under WHD supervision without a lawsuit. You audit the last two years, identify the drivers and periods affected, calculate what is owed, and send WHD the calculations, payroll and hours records, and proof the practice has changed. WHD reviews the numbers, and you pay within 15 days of its summary of unpaid wages.

You cannot use it for practices WHD is already investigating or that are in litigation, or if WHD or a court found a violation in the last three years, or if you used PAID in the last three years to resolve minimum wage or overtime issues. Drivers may accept or decline the settlement, and the release covers only the violations you paid for. It does not cut off claims under state or local law.

State labor departments investigate too

State wage agencies enforce their own laws, often with longer reach than federal law. New York is one example: an action to recover wages under its Labor Law can be brought within six years, the clock pauses when a worker complains to the state labor commissioner or the commissioner opens an investigation, and liquidated damages can reach 100 percent of the wages found due, in the commissioner’s cases and in workers’ own lawsuits (Labor Law 198). A federal settlement does not resolve a state claim, so check your state labor department’s rules before you sign anything.

Driver hours on record in HealthRide

Every driver shift in HealthRide has a timecard, and every trip carries its pickup and drop-off timestamps, so hours and trips can be checked against each other. When an investigator asks for records, you can export hours and miles per driver for just the weeks in the request from the reports page.