As covered in Chapter 12, a notice of determination gives the employer the right to file an exception to the penalty and request a hearing — this section covers how that request turns into a decided case. The exception must be in writing, sent to the official who issued the determination at the Wage and Hour Division address shown on the notice, and received no later than fifteen days after the employer receives that notice. No particular form is required, but the request must be dated; typewritten or legibly written; must specify the issue or issues in the notice that it is challenging; must state the specific reasons the employer believes the determination is wrong; must be signed by the person requesting the hearing or an authorized representative; and must include an address for further communications. Filing on time matters immediately: while the exception is pending, the determination of the Administrator (the Wage and Hour Division official who issued the notice of determination) is inoperative (does not take effect) unless and until the case is dismissed or an Administrative Law Judge issues a decision affirming it.

A timely exception commences an administrative proceeding. The Administrator — acting through the Associate Solicitor for the Division of Fair Labor Standards (an attorney in the Department of Labor’s Office of the Solicitor whose division handles fair-labor-standards cases) or the Regional Solicitor for the region where the case arose — refers the matter to the Chief Administrative Law Judge by an Order of Reference (the Administrator’s formal referral of the case to the Chief Administrative Law Judge for a hearing), with the notice of determination and the exception attached; those two documents then serve as the formal opening filings — what a court would call the complaint and answer — for the proceeding. The Chief Administrative Law Judge appoints an Administrative Law Judge to hear the case, and that judge notifies everyone involved of the time and place of a prehearing conference (a preliminary session held before the hearing itself) and of the hearing itself.

The judge’s decision is narrower than it might sound. It can only determine whether the employer committed a violation of section 12 (the Act’s child labor provisions), a violation of section 3(m)(2)(B) (the Act’s tip retention provisions), or a repeated or willful violation of section 6 or section 7 of the Act, and whether the Administrator’s penalty was appropriate — the judge cannot rule on whether a regulation is lawful or a statute is constitutional. The decision must include findings and conclusions, with reasons, on every material (important) issue in the record, plus an order that affirms, denies, reverses, or modifies the Administrator’s determination in whole or in part. Copies go to every party. A party wanting review of the judge’s decision — including judicial review (review by a court) — must file a petition (a formal written request for review) with the Department’s Administrative Review Board (the Board), received by the Board within thirty days of the judge’s decision (§ 580.13). A timely-filed petition renders the judge’s decision inoperative unless and until the Board dismisses the appeal or issues a decision affirming it — the same inoperative-pending-review structure already described for the exception stage (§ 580.13(a)). Without a timely petition, the judge’s decision becomes the final order of the Secretary of Labor (as defined in § 580.1, the U.S. Department of Labor official whose designated representatives include the Administrator). Where the Board does act instead, its decision, served on all parties (§ 580.16), stands as the final determination, and the penalty becomes immediately due and payable (§ 580.18(a)).