Human Resources Audit

Do you know if you are compliant with employment law or if your HR practices are even legal? Too often, a business selects an administrator or accountant to manage the Human Resources process because that person is good with people or numbers. Unfortunately, they don’t understand the intricacies of HR and the laws that guide it. It’s like hiring a plumber to wire your house.

The best way to understand the status of your HR processes is to conduct a Human Resources audit. An HR audit is a comprehensive survey to review current human resources policies, procedures, documentation and systems to find out what you are doing well, what you need to do differently, and where you need help to become compliant with the ever-changing rules and regulations or improve your HR processes. Our audit systematically reviews all aspects of human resources, usually in a checklist fashion.

HRCoastal Performs Human Resources Audits.
Contact Us at 843-816-4985!

Sections of review include:

Organizational Effectiveness
Planning and Organizational Development
Recruitment, Selection, and Onboarding
Benefits
Compensation
Employee Relations (including performance reviews and discipline)
Policies and Workplace Rules
Training and development
Safety Health and Wellness
Employee file review

The purpose of an HR Audit is to recognize strengths and identify any needs for improvement in the human resources function. HRCoastal will provide a full report of its findings and recommend remedies for each problem. Some of the reasons to conduct such a review include:

Ensure the effective utilization and management of your human resources
Review compliance based on the size of your organization
Professionalize your human resources function
Maintain or enhance your organization’s reputation
Perform a “due diligence” review for potential investors/owners
Establish a baseline for future improvements

Because of the number of laws, regulations, and executive orders affecting the employment process, it is important to conduct an HR analysis of your policies and practices. The audit identifies regulatory compliance issues that already exist and avoids potentially costly fines and/or lawsuits, if they are ignored. Fixing errors after an HR audit can help you to avoid the following examples of fines based on the DOL knocking on your door:

20% of all employee wages paid for misclassifying employees as exempt.
100% of FICA contributions for both employee and employer for misclassifying employees.
Up to $1,000 in criminal penalties per misclassified
Up to 1 year in prison for misclassifying employees.
A fine of $1,100 for any violation of the appropriate payment of overtime for non-exempt employees in accordance with the Fair Labor Standards Act.
Penalties as high as $10,000 each occurrence for failing to post required safety notices or keeping accurate records.
Fines up to $1,000 per employee for non-compliance with the Federal Immigration Reform Act.

While these penalties show the risk of non-compliance and the importance of conducting periodic HR audits, the audit can also ensure that policies and procedures are fair and consistent and enhance employee satisfaction. By maintaining a satisfied and productive workforce, you also reduce the cost of staff turnover, which results in 50 – 150% of the lost employee’s salary in time and money spent to replace that employee.