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An HR Audit to Position You for a Great Start to 2022

HR Self AuditFor human resources professionals, a new year serves as a natural jumping off point for a check-in on best practices concerning company policies, compliance with employment statutes, and good record keeping. To make your job easier, we are providing you three tools to help you with a self-audit:

  • Checklist for Compliance with Employment Related Statuses
  • Checklist for Employment Policies, Practices and Forms
  • Records Retention Requirement Chart

From the beginning: what questions need to be asked?

The three key questions to ask yourself in an employment practices self-audit are:

  • Do I have the appropriate policies, practices, and forms?
  • Do I know which employment-related statuses apply to me?
  • Am I keeping the right records?

By focusing on these three questions in a self-audit, an organization will be in a good position to begin the New Year. When using these forms, be sure to note any details or gaps that need to be filled to create a better HR system.

A hard look at policies, practices, and forms

Forms and documents to review include:

  • Employment agreements
  • Non-competition and confidentiality agreements, particularly if your industry is competitive or employees are working with sensitive information
  • The I-9 employee Eligibility Verification procedure
  • Hiring and orientation checklists
  • Acknowledgement and receipt of company property, if employees are being given property such as laptops or phones
  • Authorization to withhold money for unreturned company property, if employees do not give property back
  • COBRA forms and FMLA forms, which can be gotten from the federal government
  • The employee handbook, especially if it has been several years since the last review

Some of the suggested policies touch on: 

  • How and why job descriptions and essential job functions are written
  • How and when offer and rejection letters are written and distributed
  • What trainings that job interviewers have to undergo for interviews and interview questioning

Additional pieces that employers should consider reviewing include how to handle sensitive personal information, the right to change company policies, benefits, harassment policies, discrimination procedures, evaluations, discipline, and separation materials.

Which employment-related statutes apply to your business?

Employers abide by countless federal laws and rules. So many, that after several years of compliance it becomes habitual. While efficiency and understanding the process is important, reiterating the same process leads to gaps and things missing.

Most statutes also apply based on an organization’s size. For organizations that have waxed or waned over the past several years, an audit is a smart internal touch point to reexamine compliance.

Major federal statutes include:

  • Title VII
  • The Age Discrimination in Employment Act
  • The Americans with Disabilities Act
  • The Fair Labor Standards Act
  • The Equal Pay Act
  • OSHA
  • FMLA

Others include protections for members of the armed services, health insurance compliance, retraining rules, and union rules.

There should also be audit compliance with state laws. Every state is different, but in Michigan some examples include:

  • The Elliott Larsen Civil Rights Act
  • The Michigan Workforce Opportunity Wage Act
  • The Michigan Occupational Safety and Health Act
  • The Bullard Plawecki Right to Know Act

Others include protections around SSNs, eavesdropping and wiretapping, and internet privacy.

The list is a long one, but being out of compliance with even a single regulation can create financial and reputational risk that no organization wants.

What records should I be keeping?

Recordkeeping is no one’s favorite subject, but it’s a critical one. Records that are lost or destroyed pose significant risk to organizations legally, and a policy audit for records is a smart move in order to ensure compliance.

The trickiest part about recordkeeping is the dynamic set of variables for every piece of information. Every statute that applies demands companies to keep a different piece of information for a different amount of time, and when the dynamic is multiplied by dozens, hundreds, or even thousands of employees, it becomes dizzying.

But avoiding the headache is simple. We recommend that our clients simply keep all employment related records for and employee for a period of six and a half years after employment ends. This encompasses every regulation and is the best way to avoid legal trouble should a lawsuit arise.

What’s the next step?

A self-audit that includes the above information is a stellar way to prepare for the New Year. It will likely lead to adoption of new or revised policies, increased familiarity with the law, and standardization of forms and practices – all of which will benefit your organization.

If you have questions or are interested in learning more about human resources law and compliance and how it affects your company, never hesitate to reach out to our employment law team.

Categories: Compliance, Employee Benefits, Employee Handbook, Employment

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