This document summarizes an employment law seminar on conducting compliance audits of human resource policies and procedures. It discusses why regular audits are important to identify any gaps, weaknesses, and issues that need improvement. The seminar covers many topics that should be evaluated in an audit, including workforce assessment, personnel files, recruitment and hiring practices, wage and hour compliance, leave policies, and terminations. Attendees are encouraged to review their own policies and practices against the issues raised and consider conducting regular audits to help their business remain compliant with employment laws.

1. 27th Annual Parsons Behle & Latimer EMPLOYMENT LAW SEMINAR
HUMAN RESOURCE
EMPLOYMENT
COMPLIANCE AUDITS
Christina M. Jepson
Salt Lake City, Utah
TUESDAY, APRIL 28, 2015 | THE LITTLE AMERICA HOTEL
parsonsbehle.com

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 Who has done a financial audit in last 3 years?
 Who has done an HR audit in last 3 years?
 How do you know if you are compliant?
 How do you know if your HR department/person
is functioning to help your business?
 Just as important—Auditing people
management as important as financial
management
Why an HR Audit?

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 When is the last time you did a top to
bottom audit of your employment policies
and procedures?
– EEOC Complaints are increasing
– Wage and hour lawsuits and investigations
are skyrocketing
– Laws are always changing and evolving
– Employers should do regular compliance
audits
Why an HR Audit?

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 Employment decisions are often made “on
the spot” or “in the heat of moment”
– You live with the consequences
– May live with the consequences through an
investigation
– May live with the consequences through a
lawsuit
– Don’t get a do over
Why an HR Audit?

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 Process of examining compliance with
laws, policies, procedures, documentation,
and practices with respect to managing
people who work for your business
 Identify strengths and weaknesses
 Identify issues that need to be fixed
 Implement a plan to improve the HR
function
What is an HR Audit?

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 Identifies what your company actually
does. What is the reality?
 Identifies what your company should be
doing differently. What needs
improvement?
What is an HR Audit?

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 An annual audit is ideal, regular audits
essential
– Just like financial audits
– Part of the culture
 Contemplated sale of company, merger or
acquisition
 Changes in management
 Changes in the law
 Significant growth
When to Do an Audit

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 Create an audit questionnaire
 Collect information
 Have a team that reviews the information
– Is in house sufficient?
– Do you need an independent audit?
 Written report with recommendations
 Prioritize based on risk level
How Do You Do An Audit?

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 Assess your workforce—Who works for
you and what do they do?
 Personnel Files—What are you
documenting? What are you not?
 Recruitment and Hiring—How does it
work? Is it lawful?
 Immigration—Are you ensuring I-9
compliance?
 Job Descriptions—Are they up-to-date?
Audit Topics

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 Wage and Hour compliance—are you properly
classifying employees?
 Confidential Information and Non-Competes—Are you
protecting trade secrets and confidential information
 Compensation and Benefits—What is offered and to
whom?
 Handbooks—Is it up to date and being followed?
 Discrimination and Harassment—Are these addressed in
policies, training, and investigations?
 Practices—What are your actual practices? Are you
following your rules?
 Performance Evaluations
Audit Topics

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 Complaints—how do you respond?
 Discipline & Internal Investigations—Are
you consistent? Do you document?
 Accommodations—Disability and religion
 Leave—FMLA, illness, pregnancy, military
service, and voluntary programs
 Paid Time Off and other Time Off
Audit Topics

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 Performance Evaluations—Do you do
them regularly? Are they accurate?
 Health & Safety—Incident reports,
inspections, and policies
 Social Media—do you have a policy and
plan?
 Terminations—are you doing it correctly
and documenting
Audit Topics

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 Who works for you and what do they do?
– How many
– How are they classified—regular, temporary,
full time, part time, exempt, non-exempt,
independent contractors
– Do your employees know how they are
classified?
– Who supervises whom—organization chart
Assess Your Workforce

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 Who keeps them? Where are they kept? Who has
access? Secure?
 Job descriptions, exempt analysis
 I-9s (kept separate)
 Hiring, PTO, Training, discipline, assignments,
emergency contact, evaluations, termination
 Employment agreements, at will statements, non-
competes
 Performance evaluations
 Discipline
 Health information separate
 Does the file support your decisions?
Personnel Files

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 Documents to review
– Offer letter
– Employment agreements
– At will statements
– Independent contractor agreements
– Personnel file policy
– Sample file and sample medical file
Personnel Files

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 Legal issues
– Discrimination claims
– Lack of documentation
– I-9 documentation
– Drug testing statutes
– Pre-employment inquiries
– Background checks
– Affirmative action if applicable
Recruitment & Hiring

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 What is your recruiting process? Job description?
 What is your hiring process? Who decides? Are they
trained?
– Are multiple people involved in hiring?
– Is it spelled out?
– Are decisions documented?
– Is your application compliant?
– How are you handling background checks? Drug testing?
– Is there fair representation of women, minorities, age categories,
etc.?
– How are you handling requests for accommodations
Recruitment & Hiring

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 Documents to check
– Job advertisements
– Applications
– Job descriptions
– Affirmative action plan if applicable
– Internal job posting policy
– Policies & procedures for interviewing and hiring
– Reference/background check policy and forms
– New hire documentation
– Employment agreements
– At will statements
Recruitment & Hiring

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 Are you getting proper I-9 documentation?
 Is it kept for each employee?
 Are you making sure you are not requiring
more?
 Avoiding citizenship discrimination?
Immigration

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 Job descriptions are critical for ADA issues
and determining exempt status
 They need to address essential job
functions
 They need to address exempt status
issues
 Make sure they are kept up-to-date as
positions change
Job Descriptions

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 Do you have current and accurate job descriptions
 Classification of employees
– Have employees been properly classified as exempt or non-
exempt
– Do you have the paperwork to support exempt status
determinations for each position
 Is overtime being paid correctly
– Do timesheets or time records match time actually worked
– Off the clock work
 Are exempt employees treated as exempt—no docking
 Do you have any independent contractors and have they
been properly classified?
– Have issues about classification been raised?
Wage and Hour Law

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 Are you ensuring that new hires don’t have
agreements with other companies?
 Who should sign non-competes?
Confidentiality agreements? Non-
solicitation?
 Who should not?
 Are your agreements legal?
Confidential Information and
Non-Competes

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 Do you have a compensation program? Who
administers?
 How are wages determined? Salary surveys?
 How are jobs rated? Reevaluated? Updated?
 Are you competitive in wage, salary and
incentive levels
 Merit increases and bonuses
 Are employees being treated fairly
 Is there a lurking sex discrimination claim?
Race? Age?
Compensation and Benefits

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 Is your health insurance compliant with
Health Care Reform act?
 Same sex spouses?
 Who is offered benefits? Who is not?
Why?
 Wellness program?
 COBRA administration?
Compensation and Benefits

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 Up to date—include new developments in the law and
reflect actual practices
 At will statement and disclaimer of contract
 Procedure for updates and acknowledgement of updates
 Discrimination, harassment, retaliation, and reporting
procedure
 The policies have been disseminated
 Employees have signed acknowledgement of receipt
 Acknowledgements are maintained in employee files
 Managers have been trained and policies are uniformly
followed and enforced
Handbooks

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 Make sure these topics are covered in
your handbook—does it cover all the
protected classes?
 Make sure your employees are trained
 Make sure your managers are trained
 Have regular training—new employees?
 Reporting process
Discrimination and Harassment

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 Practices relating to recruiting and hiring
– Written policies and procedures
– Are they compliant
– Are the persons involved trained on the law
– Are they consistently followed?
Practices

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 Do you have a process for performance
evaluations? Do you have a consistent form?
 Do your managers understand it? Are your
managers trained?
 Is it being done timely and consistently?
 Are managers being honest?
 Are problems being noted?
 Is good work being noted?
 Does HR review? Checks and balances?
Performance Evaluation

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 Do you have a procedure for handling
complaints?
 Do you investigate complaints?
 Do you document?
Complaints

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 Responding to complaints
– Do your managers know what a complaint is
– Do they know what to do with a complaint
– Do you have a process for internal
investigations
– Do you have a process for making decisions
after investigations
Complaints

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 A fair and thorough investigation by a
neutral party
 A decision based on the known facts
 Multiple decision makers
 Document decision
Investigations & Discipline

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 Do you have an ADA policy?
 Religious accommodation policy?
 Are your managers trained?
 Can they spot an issue?
Accommodations

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 Are you required to provide FMLA leave?
– Do you have an FMLA policy?
– Who handles FMLA requests
– Are managers trained to spot FMLA issues?
 Do you provide other leave?
– Do you have a policy?
– Written absenteeism policy which is
consistently followed?
 Military leave, jury duty, witness
FMLA and Leave

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 Do you have a single PTO system or
multiple systems?
– Who keeps track?
– Who qualifies? Why?
– Is it being applied consistently?
– Carry over? Caps?
– Use it or lose it?
Paid Time Off

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 Required posters?
 Log of injuries and illnesses as required?
Procedure for reporting?
 Safety program?
 OSHA regulations?
 UOSH regulations?
 No retaliation
 Special industry?
 Worker’s Compensation policy
Health & Safety

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 What is your company doing in social
media?
 What are your employees doing?
 Do you have policies regarding social
media, computers, and other electronic
devices?
 No privacy disclaimers
 Plan to prevent attack
Social Media & Electronic Data

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 Is there a contract or at will?
 Progressive discipline?
 Approval for termination? Who decides?
 Formal checklist? Legal review?
 Review all documentation before termination
 Exit interviews?
 Does your file support the termination?
 Retaliation risk?
 Severance and release?
Terminations

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 Christina M. Jepson
801.536.6820
cjepson@parsonsbehle.com
Thank You