What's included in an audit?

Recruiting and hiring

• Job descriptions: Confirm that descriptions accurately reflect job duties and do not include discriminatory language related to protected characteristics like race, gender, or age.

• Applications and interviews: Review application forms and interview questions to ensure they are job-related and do not ask for information on protected statuses.

• I-9 forms: Check that every employee's Form I-9 is completed accurately, signed, and retained securely within the legally required timeframe.

• Background checks: Verify that proper consent and processes are followed according to federal (Fair Credit Reporting Act) and state laws.

• Equal Employment Opportunity (EEO): Review hiring and promotion processes to ensure non-discrimination based on protected characteristics.

 

Compensation and employee classification

• Employee classification: Verify that employees are correctly classified as exempt or non-exempt under the Fair Labor Standards Act (FLSA) to prevent misclassification penalties.

• Pay equity: Conduct a pay audit to ensure there are no unjustified pay gaps across demographics for similar work.

• Independent contractors: Review the classification process to confirm contractors meet IRS and state-specific guidelines. 

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Workplace policies and the employee handbook

• Handbook review: Assess the employee handbook to ensure it reflects current federal, state, and local laws. 

• Anti-harassment and discrimination: Confirm that policies are clearly defined, communicated, and that procedures for reporting and investigating complaints are effective.

• Safety and health (OSHA): Review compliance with the Occupational Safety and Health Administration (OSHA), including documented safety protocols and training.

• Labor law postings: Verify that all required federal and state labor law posters are displayed in conspicuous areas. 

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Recordkeeping and data privacy

• Personnel files: Review personnel files to ensure proper separation of confidential information, such as medical records (ADA), from standard personnel records.

• Record retention: Verify that documents are retained for the legally required duration and are securely disposed of afterward.

• Data security: Evaluate security protocols and access controls for employee data, especially in digital systems.

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Performance management and terminations

• Performance reviews: Audit the process to ensure reviews are documented, conducted consistently, and based on objective, job-related criteria.

• Disciplinary actions: Review disciplinary actions and ensure they are well-documented and applied consistently across all employees.

• Termination procedures: Confirm that the offboarding process, including final paychecks and benefit notices, follows legal and company policy.

• Exit interviews: Review exit interview procedures and documentation.

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Training and development

• Compliance training: Verify that employees and managers receive regular training on critical compliance topics, such as anti-harassment and safety.

• Manager training: Assess if managers are trained on compliant hiring, performance evaluation, and disciplinary practices.

• Recordkeeping: Confirm that records of training dates and attendees are maintained.