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What is an HR Compliance Audit and How Can it Benefit Your Organization?

Updated: Feb 28

Compliance, compliance, compliance… when you hear this word, what comes to mind? 

Does it give you a bit of a cold corporate headquarters vibe? 

If you’re someone who doesn’t think you can possibly audit one more thing in your organization, you might find the concept a little… well, cringey. 

If you don’t love the idea of an HR compliance audit or don’t know really what it is, that’s okay! In fact, you shouldn’t, because it’s our job. (We HR people are kind of nerdy because we know this stuff inside and out, but we’re also more fun than you might think… I promise.) 

Compliance is the basis of all things “HR,” and an HR compliance assessment (or HR audit) is one of the first steps we take with every client. We do this to ensure you comply with laws and regulations, but there are plenty of other ways this can benefit your organization, from improving organizational effectiveness to preventing costly lawsuits.  

Read on to learn more, or get in touch with our Ohio HR consultants.

What the heck is an HR compliance audit?   

As a business owner, are you surprised by how much time “HR” is taking out of your busy schedule? We know you want to ensure HR compliance, but may not understand how to get there or stay consistent with it.

If you’re struggling to understand why this might be important, think about it like this: in assessing your business and addressing issues, we’re aiming to prevent problems from popping up in the future. 

You can think of us kind of like doctors. Experts like doctors are here to keep us in good health, and help point out issues that need improvement so that we can be at our best. HR experts do the same thing! (Well, no, but can you do me a favor and humor me with the loose analogy?). And luckily our assessments never end in advice where we tell you to cut carbs. 

During an HR compliance audit, our concern is to make sure that your business is as healthy as possible, both solving immediate issues and identifying any problems that could cause problems for your employees or organization in the future. 

Just like your regular checkup, an HR compliance audit should be conducted every one or two years to make sure everything is in place. Federal and state laws and regulations concerning employee rights, safety, and compensation are always changing, so even if you’re in compliance today, those same practices might subject you to fines and penalties tomorrow. 

Our team of HR experts will review your practices and policies to make sure that you are in compliance with applicable laws and regulations as they pertain to your business. 

HR Compliance Audit Topics 

We want to make sure that your business adheres to all applicable labor laws. Your policies and procedures must meet local and federal laws; if they do not, your company may be liable for fines, penalties, or potential lawsuits. 

Scheduling an annual compliance audit is as essential as a checkup: we can nip those problems in the bud so they don’t get bad enough to require legal “surgery.” 

HR compliance can cover many areas – here are just a few examples: 

  • Reviewing job listings to ensure that they are in line with state and federal regulations such as the Fair Labor Standards Act (FLSA). 

  • Identifying any potential areas regarding discrimination according to the U.S. Equal Employment Opportunity Commission (EEOC) both with current employees also through the hiring process.  

  • Identifying areas of possible employee misclassification – for instance, whether a contractor should be classified as an employee. 

  • Making sure that regulations are being followed regarding compensation – for instance regarding the Department of Labor’s latest changes regarding overtime.

  • Checking that work authorization (I-9) forms are filled out correctly and up-to-date for non-U.S. workers.

  • Reviewing and updating employee handbooks. 

Other examples of areas we can assess during an HR compliance audit include workplace compensation and safety, affirmative action policies, and harassment training.   


What Happens During an HR Compliance Audit?

Once we set up a time to meet, we’ll work through our audit process step-by-step, and we will ask you for items like this: 

  1. Job Descriptions of Employees

  2. Job Applications

  3. Offer Letters 

  4. Confidentiality & Non-Compete Documents

  5. Handbook Acknowledgement

  6. Background Check Form

  7. Drug Testing Consent Form

  8. Performance Evaluations

  9. Disciplinary Warning & Performance Improvement Plans

  10. Training Records

  11. Handbook

  12. Employment Postings 

  13. Time with your payroll person to ensure we are retaining records for the applicable number of years

  14. Consolidated Omnibus Budget Reconciliation (COBRA) Policy

The wonderful thing about being your dedicated HR consulting partner is that we will already have access to most of these things. When you work with us, we'll be quietly going through them in the background while balancing your other HR initiatives. 

Schedule an HR Compliance Audit With Us Today

As a part of our ongoing HR support to our clients, we provide these annually as a part of our monthly retainer agreements. 

An HR compliance audit won’t only help you avoid fines and penalties, but it can also (indirectly) help boost employee morale and improve productivity – factors that will help you retain top talent and give you an edge over your competitors. Our team of Ohio HR consultants is accredited and professionally trained in all aspects of employment laws.

While an HR compliance assessment can be a bit of a lengthy process, an ounce of prevention is worth a pound of cure, as they say.  

Our HR consulting team will act like your in-house HR team. We can help you to understand current laws and regulations, and make sure that your business is in lasting health.  

To learn more, schedule a consultation here!

*The information and materials on this website are provided for general information purposes only and are not intended to be legal advice. We attempt to provide quality information, the law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature and may not apply to a specific factual or legal circumstance. Nothing on this website is intended to substitute for the advice of an attorney; therefore, if you require legal advice, please consult with a competent attorney licensed to practice in your jurisdiction.

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