“Rules were made to be broken”: the slogan on a T-shirt that no one should ever wear in a human resources department. HR compliance is vital to any organization. Proper compliance ensures that the company is adhering to established legal and ethical standards, as well as federal, state, and local laws and regulations. As time goes on, however, even the best HR departments can struggle to keep up. That’s why it can be useful to review those standards and regulations in one fell swoop.
An HR compliance audit is a comprehensive review of a company’s human resources policies and processes. Here, we’ll discuss what an HR compliance audit should include and how you can make sure you’re enforcing rules, not breaking them.
The first thing an HR compliance audit should include is a review of the company’s HR policies and procedures. This review should ensure that the policies and procedures are up-to-date, consistent, and compliant with applicable laws and regulations. This includes policies related to recruitment, selection, onboarding, performance management, compensation, and benefits. The audit should also review the company’s employee handbook to ensure it’s current and complete.
Ask any employee who has made the switch: there’s a big difference between hourly labor and salaried work. This makes it important to conduct a thorough review of your organization’s roles. This ensures that your company properly categorizes all employees as either exempt or non-exempt and that you pay them according to the Fair Labor Standards Act, or FLSA. Your audit should also ascertain the proper classification of independent contractors and reaffirm that their contracts adhere to all legal requirements.
A critical component of what an HR compliance audit should include concerns equal opportunity. Your compliance audit should ensure that your organization complies with the Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964, and state-level anti-discrimination laws. The audit should also include a review of your diversity, equity, and inclusion programs to ensure that they meet legal requirements.
Whether in-person or remote, the workplace must be safe and healthy for employees. An HR compliance audit should ensure that the company adheres to all federal and state safety and health regulations, including those of the Occupational Safety and Health Administration, or OSHA. The audit should review the company’s safety policies, procedures, and training programs to ensure they meet legal requirements.
Your final step should be a review of record-keeping and reporting procedures. Proper reporting standards are a major aspect of HR compliance, so ensure that the company is maintaining accurate employee files and adhering to all applicable record-keeping requirements.
Sound like an undertaking? It is. Nonetheless, an HR compliance audit can be essential in ensuring your organization stays in step with legal and ethical standards. All HR policies, procedures, and activities must be compliant. Additionally, an HR compliance audit helps your organization identify areas where it needs improvement, and while “Never Stop Improving” isn’t a federal law, it’s an excellent guiding principle.
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