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5 HR Audit Items to look at for Annual Compliance Check

Updated: Sep 3, 2020

With the new year coming straight at us, there is much to be done in the world of HR. Gone are the days where time passed, and we had nothing to do (were there ever days like that?). As we close out one year and look to the next, there are several areas we recommend to review. One thing to work through is the end of the year audits. Audits can become a rabbit hole of "fun", but are necessary tasks to perform to ensure your HR work is in compliance. Once completed, you can feel confident your department is in the right place. While there are many checks and audits you can perform, here are five we think are useful to maintain in good standing all year long and review for accuracy at least annually.

  • I-9 Audit - It is essential to keep your I-9 files up to date. With changing forms and an increase of employer audits in this area, staying on top of the correct way to fill out forms is of the utmost importance. Additionally, purging I-9 records in the correct timelines and storing them needs to be done following USCIS regulations. Annual audits with self-made corrections are one way to be sure you are giving a good faith effort in staying in compliance with laws in this area.

  • Employee Files - How employee files are maintained can vary and differs depending on the employer's preference. What is most important is to be able to separate things that are kept confidential from things that can be shared with different people in the organization. For that reason, we see employers maintaining anywhere between two and five separate files for each employee.

  • Review Your Processes - Documentation is a key function in the HR world. Take time to work through process documentation for HR functions to determine if the process is still relevant and if there have been updated changes. Also, note if new procedures should need to be developed, who should be responsible and the timeline to work through them.

  • Performance Reviews - People like feedback. Point blank. For that reason ensuring employees receive consistent, valid, and reliable feedback is essential. Regular reviews allow for employees to work through constructive improvements and continue to develop strengths. Review timelines also vary from employer to employer ranging from monthly check-in status reports to annual 360-degree reviews.

  • Compensation Analysis and Statements - An annual review of compensation rates based on the position should ensure pay rates are fair and equitable. In addition to the federal Equal Pay Act, more and more states are implementing equal pay for equal work laws on a state level. Additionally, with the change in FLSA (Fair Labor and Standards Act) ranges for exempt and non-exempt pay rates, employers should work to maintain compliance with their compensation strategies.

Should you have any questions about what these audit areas are or how to maintain your employer's compliance standards, reach out to your vendors/brokers and other resources and tools for additional guidance and direction. Happy Auditing!

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