The Audit Process

The audit involves the human resource professional leading the process. A well-executed HR audit will identify areas of concern in compliance and best practices that could potentially lead to legal disputes and government fines. Start-up companies face very different challenges than companies who are established,


therefore, the HR audit should be customized for each company and contingent on the company’s phase of development. Also something to consider is compliance regulations differ greatly depending on the company size as and monitoring this area is especially important for growing companies. For example, it is not uncommon for companies to be unaware they are required to offer FMLA due to the growth in their workforce until a situation arises. Foster a climate of continuous improvement Once the audit is completed and the corrective action items are implemented, it is important to continue to review and improve policies and practices to ensure that your company is up to date on new regulations and achieves its competitive advantage. Engaging with an outside consultant who can keep track of the audit findings, action items and new regulations ensures continued success.

What is a HR Checkup?

A Human Resource checkup is an audit of your HR “people management” policies and practices to evaluate compliance with city, state and federal employment regulations and identify areas of improvement.

What are the signs that you may need one?

• Your employee handbook has not been updated in more than two years.

• Your company operates or provides services in Austin, Texas and you need to comply with the new Sick Leave Ordinance that will go into effect October 1, 2018.

• Your workforce has grown significantly, and you are unsure of which employment laws and regulations apply to your company after your expansion.

• You have questions about correctly classifying employees as exempt or independent contractor.

HR Audit Areas

What are some of the areas included in an audit review?

• Appropriate employee classifications- Independent contractors versus employee; Exempt (from overtime) versus non-exempt.

• Legal Hiring practices- ADA; Discrimination practices; At will status; Negligent hiring; Background and reference checks;

• Employee Conduct- Discrimination allegations; hostile work environment; dysfunctional teams; Attendance

• Management Practices- Wrongful terminations; Unfair employment practices; Ineffective management practices.

• Employee Performance- Substandard work; Inefficient workflow; Poor customer service; Ineffective performance evaluation process.

• Company Culture- Employee turnover; Employee morale; Conflict in the workplace.

• Compensation and Benefits- Fair and equitable compensation; Comparison to the market; Affordable Care Act compliance.