HR Audit A Checklist to Help Audit Human Resource Practices and Procedures

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HR Audit

A Checklist to Help Audit

Human Resource Practices and

Procedures

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Sabrina Baker, PHR is a human resource

consultant with Acacia HR Solutions. Before

founding the company in 2011, Sabrina spent

eleven years in corporate human resource roles of both small and large

businesses. Connect with Sabrina on Linkedin.

Sabrina Baker, PHR

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How To Use This Checklist…..………….….…4

The Essentials……….………..5

Going Deeper……….……….…...8

Conclusion.……….……….…….11

How To Use This

Checklist:

This guide is broken down into two sections. The first is a simple checklist to help leaders ensure the very basic human resource management requirements are in place. This section could be considered the bare minimum legal requirements that companies must have in place.

The second section provides a more in-depth checklist that allows the user to determine areas of focus from a human resource perspective.

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From a legal

perspective, there are things every business should have in place to remain compliant and reduce risk. This checklist outlines those items. If after reviewing this

checklist you

determine that your business is in need of any of these items, do not haste in getting them implemented. The longer you wait, the longer your

business is at risk.

Section 1:

The Essentials

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Need help implementing the basics? Click here to find out more about our HR setup services.

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Legal & Compliance:

There are a few must haves for businesses to be compliant from a human resource and legal standpoint. The list below highlights those standards.

 Workplace Posters – If you have a physical place of

employment, does it display the proper workplace posters?  Does your company have an EEOC policy and is it followed?  Compliance Training – Do employees get annual training on

preventing sexual harassment and OSHA related issues?

 Do you have workers compensation insurance as required by your state law?

 Are you withholding the proper taxes from employee pay?  Are final paychecks delivered in accordance with the law?

Recruitment & Onboarding:

When hiring and onboarding new employees, certain elements should be reviewed for proper compliance.

 New Employee Paperwork and I-9 Compliance – Are new employees filling out I-9's and are they up to date for existing employees?

 Recruitment and Hiring Process – Is there a documented

recruitment and hiring process? Is it being administered fairly and consistently?

 Are applications accepted and if so, do they have an “at-will” statement on them where applicable?

 Is the proper new hire paperwork filled out as required by your state? This includes tax forms, new hire reporting etc.

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Performance Management

For the ongoing performance of employees, the following items should be established.

 An Employee Handbook which outlines policies and expectations from both the employer and employee

perspective – Do you have an employee handbook and is it current?

 Performance Reviews – Is there a process for annual (or more frequent) performance reviews? If so, is it being fairly and consistently administered?

Compensation & Benefits

Compensation and benefits are some of the most regulated issues surrounding employment.

 FLSA – Are employees classified in the proper FLSA category and compensated accordingly?

 Compensation Fairness – are employees compensated

consistently, meaning employees in similar roles with similar responsibilities and tenure make similar amounts of money?  Benefits – If you offer benefits, are they being administered

properly and within regulations?

 If you have more than 50 employees are you offering the appropriate leave policies?

 Are you paying overtime correctly?

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Section 2:

Going Deeper

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If you want to make sure that your business has the best human resource practices in place, then going

beyond the absolute essentials is necessary. The basics keep you legal, going deeper makes you a

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Recruitment & Onboarding:

When hiring and onboarding new employees, these items will ensure higher levels of compliance and enable an organization to attract and retain top talent.

 Do job descriptions exist for every position? Are they current?  Are new position openings offered to existing employees first?  Are there reference and background checks performed? If so,

are you filing the proper paperwork if adverse action is taken?  Do applications refrain from asking protected information?  Do you have an onboarding process?

 Does the onboarding process establish guidelines for employees to work within?

 Does the onboarding process cover safety information?

Compensation & Benefits:

Beyond paying everyone correctly, the following checklist ensures pay practices are established, communicated and reviewed.

 Is working time documented properly and audited?  Is there a vacation/time off benefit structure and is it

administered consistently?

 Are summary plan descriptions shared with participants in the benefit plan?

 Are COBRA notices shared with employees who have left the company?

 Is protected health information kept private?  Are plan documents in compliance with ERISA?

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Performance Management

Managing performance is an ongoing process. This checklist provides guidelines for aligning performance with business objectives.

 Is performance tied to compensation?

 Is both quality and quantity of work evaluated?  Is disciplinary action applied fairly and consistently?  Is an employee grievance procedure in place?

 Performance Reviews – Is there a process for annual (or more frequent) performance reviews? If so, is it being fairly and consistently administered?

 Are employee files kept on every employee?

 Is employee documentation kept for its required duration?  Are supervisors trained on leadership techniques and

workplace behavior such as handling grievances, identifying disciplinary problems and providing feedback?

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Conclusion

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consultation

While this guide is a great starting place to help you determine if you are at the very minimum legally

compliant, no checklist can be exhaustive. It is meant to be a guide only and not a definitive source to determine what human resource practices your company needs to have in place. Ensure your business has the basics and then implement the rest over time.

Are you worried about whether you are

compliant after reading this checklist? Do not delay in getting

help. Employee legal issues cost American businesses millions of