This year, your company’s internal audit is likely to give a little more scrutiny to your company’s HR compliance policies and procedures than in years past. For example, this year’s continuing focus on the “MeToo” movement and concerns over sexual harassment means your company needs to make sure it has rigorous training programs and protocols for reporting and investigating any allegations.
Importance of HR Compliance Audits in 2019
Performing an HR compliance audit is an important part of the company’s internal audit. HR compliance is becoming more challenging each year, and your company may be wise to outsource it to ensure all areas are covered thoroughly and objectively.
Below is a checklist for 2019 to help your company with its HR compliance obligations:
Employee Files and Records
- Have your employees review and update their personal information for their benefits cards, tax documents, and other important matters. Have them specifically review:
- Home address/Mailing address.
- Phone number.
- Beneficiaries for insurance, 401(k) benefits, and any other benefits.
- Name change.
- Emergency contacts.
- Dependent information.
- Review your employee handbook and workplace policies. Ensure the handbook covers company policies on:
- Sexual harassment.
- Dress code, including tattoos, hair color and styles, body piercings, perfumes and aromas that could bother employees or customers.
- Privacy in the workplace.
- Personal cell phone use, including talking or texting during work hours, setting phones to vibrate, rules while driving, and taking pictures during work hours.
- Internet/computer use policy, including appropriate and inappropriate emails, prohibited internet sites, and whether work emails and internet use is monitored.
- Proper and inappropriate relationships at work.
- Prohibition on discussing salaries or benefits with other employees.
- Drug-Free Workplace Program, helping to lower workers’ compensation premiums and prevent or resolve drug issues in the workplace.
- Equal Employment Opportunity policy that complies with all federal, state, and local regulations.
- Social networking policy that includes a prohibition on visiting social networking sites during working hours, information about whether the employees’ posts will be permitted even when they are negative of the company or co-workers, whether company officials will check their employees’ personal social media pages, a prohibition on managers “friending” or “following” employees on social media sites. (Note that NLRB regulations urge employers not to tell employees what they can or cannot post on social media).
- Update all internal resources for the employee handbook and company policies.
- Issue an updated employee handbook to employees.
- Verify that labor law posters are current.
Recruiting & Hiring
- Review the procedures for recruiting and interviewing new employees, noting specific interview questions and who conducts the interviews.
- Review how the company checks references in compliance with employment law.
- Review offer letters, contracts, and new-hire orientations.
- Review documents that are provided upon hiring with special emphasis on the laws prohibiting discrimination against employees for religion, sex, race, national origin, or color, and age.
- Review your current application form and any internal job descriptions.
- Ensure compliance with the Americans with Disabilities Act.
Compensation, Benefits, & Promotions
- Review budget and allocations for accuracy to prevent overspending.
- Schedule performance reviews and review the process for scheduling them.
- Confirm the 2019 payroll schedule.
- Calculate your FTE number to determine if you are a large employer (ALE) (with 50+ full-time equivalent employees) in 2019 for purposes of the Affordable Care Act and its reporting requirements.
- Modify summary plan descriptions to reflect any changes and distribute them to new participants.
- Ensure elections are correctly loaded with plan carriers.
- Identify any elections requiring evidence of insurability.
- Make sure your company has a procedure for employees to report and file complaints about prohibited activities occurring in the workplace.
- Ensure your company does not retaliate against an employee for exercising those protected rights.
Health & Safety
- Verify that Occupational Safety and Health Act standards are being followed and identify any other safety issues in the workplace. If your company handles hazardous materials, the safety checklist should include federally approved methods for handling, usage, spills, and disposal.
- Verify that it includes a requirement to tour the physical environment to make sure there is an emphasis on the safety of employees and customers.
The Company’s HR Processes and Functions
- Double check your employee classifications for purposes of the Fair Labor Standards Act overtime pay obligations.
- Conduct a reassessment analysis to make sure that the company is following all state and federal employment laws. These statutes cover:
- Family and medical leave.
- Health benefits.
- Pregnancy disability benefits and leave.
- COBRA and unemployment benefits.
- Verify that other programs the company offers comply with applicable federal and state laws, such as drug and alcohol-free workplace programs, rehabilitation services, or other voluntary employment benefit program.
- If your company has more than 50 employees and federal government contracts of at least $50,000, you are covered by Affirmative Action and must update your Affirmative Action plan annually. Verify that your company does or does not meet that threshold requirement.
- If your company has at least 100 employees, you are covered by the Veterans Readjustment Act and must file reports on your veteran employees by the relevant deadlines. Verify that your company does or does not meet that requirement.
Speak with the HR Compliance Experts at Smart HR
HR compliance audits can be daunting. Failure to comply with certain laws and regulations can result in significant fines and penalties, as well as legal risk to your business. Talk to the HR compliance experts at Smart HR for more information about HR compliance audits.