AUDITING YOUR HR FUNCTIONS

Evaluate Your Practices and Policies with an Independent Review

There are different types of HR Audits.  Some companies conduct an internal audit, a compliance audit that focuses on relevant regulatory requirements, and a processes and practices audit.

External expertise is crucial to the success of the audit.  HR auditors are well-versed on compliance requirements, risks and current best practices.  Obtaining the results of your HR audit will give you factual information about where you are and where you could be.  The company can then transform information into action, creating specific action plans and designing longer-term plans for continuous improvement.

For some employers, there might be a “Risk Mitigation” Audit performed.  This usually is triggered by a specific compliance violation or another major problem related to the violation of an HR rule or principle.  This type of audit is designed to ensure that existing policies and procedures are effective and are being followed.

These are the types of audit services that can be performed:

• Compliance Audit – covers federal and state regulations that impact recordkeeping, reporting and HR program administration.
• I-9 Audit – reviews active I-9 forms, terminated I-9 forms or both
• HR Program or function audits – covers a review of any individual HR-related functional area (i.e. recruitment function)
• Full HR Audit – covers a review and evaluation of areas noted above as well as an audit of all other HR functional areas, including staffing and recruitment, job analysis and job descriptions, compensation and benefits programs, performance management, training and development, employee relations and policies and HR metrics.

With a small or single-person HR department it isn’t easy to stay abreast of ever-changing regulatory compliance and human resources best practices. Audits bring HR expertise into the picture and can jump-start needed discussions and process changes for small companies. Larger companies may opt for a more comprehensive audit initially before refining subsequent audits to focus on more specific areas.

Payroll frequently represents a major component of HR audits because it represents the single largest expense in many organizations. One would be amazed at how many times we find issues with people inappropriately taking money through payroll.

The specific steps of an HR audit are set forth by the Society for Human Resource Management:

1. Determine the scope and type of audit
2. Develop the audit questionnaire
3. Collect the data
4. Benchmark the findings
5. Provide feedback about the results
6. Create action plans
7. Foster a climate of continuous improvement.

By knowing what to expect and being open to change, an HR audit can assist any size organization become better prepared to deal with the ever-changing laws and best practices that might come their way each year.

    HR Magazine

A Judge’s Tips for Staying Out of Court

The Honorable Denny Chin, former U.S. District Court Judge, and now Court of  Appeals judge, made his remarks at a Labor and Employment Law Seminar put on by attorneys in New York City.

Here are Judge Chin’s tips to avoid seeing him in his court:

1. Don’t Discriminate.  Know the rules and make sure your decisions are based on legal business reasons.
2. Supervise your supervisors.  Communicate with them, train them, watch them, and deal with infractions.
3. Be brutally honest with employees.  Terminated employees who believe that they had no warning that their work was substandard are angry and juries are sympathetic.  If you withhold information, you will pay.
4. Grade low.  If a “poor” performance rating follows a string of “high” ratings, it looks suspicious.
5. Never say or write anything you will regret.  One bad sentence in an otherwise routine communication will catch the jury’s attention.  Also, remember that many employees will surreptitiously record conversations.
6. Make a record, but not unfairly.  If you have written no memos for years, and then you write a sudden string of memos right after the employee makes a complaint, the jury will construe a case of discrimination.
7. Don’t let a weak discrimination case become a strong retaliation case.  Remember that employees have a right to make complaints without retaliation.  All too often the discrimination case is thrown out but the retaliation case sticks.
8. Be fair even if you don’t have to as a matter of law.  Staying out of court – which is an HR priority is a challenge given the change in the laws, stretched budgets, and over-worked people.

HR Daily Advisor

MOST HR FAILURES COME FROM IGNORING THE BASICS

HR POLICIES AND PROCEDURES

There are dozens of picky technical ways to run afoul of employment laws, but more often than not it is the most fundamental failures that get employers in trouble.

According to attorneys John Skousen and Christopher Boman of Fisher & Phillips LLP in Irvine, here are tips for staying out of the courtroom and creating fair work environments in these basic areas:

Employee Handbooks

Without an employee handbook, it is difficult to prove a policy was in place and understood by the staff.  Some items MUST be included – such as meal and rest periods, to ensure employees are aware of the rules and expectations.

Job Applications

Many companies do not require applications, but that is a mistake say Skousen and Boman.  With a well-drafted application, employers elicit only the “facts” and applications allow employers to obtain approval to conduct various background checks. It is also important that employers obtain a signature and affirmation from the applicant confirming that the information is accurate and complete.  Doing so may provide grounds for termination if applicants misrepresent themselves.

Employers should also ensure that the information submitted by the applicant is verified and consistently conducting background checks for every applicant to ensure discrimination claims are avoided.

Your application must be up-to-date! Asking questions that could trigger liability for employers such as the date of the high school diploma could trigger an age discrimination claim.  You may ask whether the candidate graduated from high school instead of asking when they graduated.

Performance Evaluations

Not conducting performance reviews or conducting them late can create problems. It will be difficult to terminate problem employees when there is a lack of notice regarding issues that need to be improved or if there are inconsistent patterns of providing performance evaluations (which could be perceived as a bias).

Termination

One of the biggest mistakes employers make is waiting to involve HR Advisors or legal counsel until after an employee has already been terminated.  Sometimes it may just be a five-minute phone call that saves the company from a lawsuit.

Employers should document the reasons for the employee’s termination. If the employer simply states “at will employment” employees can state whatever unlawful reason they want to.

WHO AUDITS FIRST – YOU OR THE GOVERNMENT? Hint: You don’t want it to be the government!

Using the “hope” system to avoid lawsuits (we “hope” we’re doing it right) is not the best way to determine if you are limiting your exposure to lawsuits! Doing an HR Audit is the only surefire way to root out problems in your company and to be sure that your policies are being followed.

The first rule of auditing:  Be sure you know what areas of the company need auditing.  The second rule of auditing is to be sure that management will be willing to make corrections if infractions are found.

What Should the Audit Cover?

·     Recruiting Practices – Review of job applications, advertisements, job descriptions, and interview questions for compliance with state and federal antidiscrimination laws.

Be sure interviewers are trained regarding the questions they can and can’t ask under antidiscrimination rules.

If you obtain consumer reports or credit reports, be sure you provide the required disclosures to applicants and get their written consent.

Evaluate any pre-employment tests to be sure the questions are job-related, don’t discrimination on the basis of age, gender, race, religion, ancestry, sexual orientation, or other characteristics.

Eliminate questions about religious beliefs, sexual preferences and activities and politics.

·    Medical Exams and Drug Testing – Be sure that medical exams are administered only after you have made an offer of employment.  Examinations must be mandatory for all applicants in the same job classification.  Drug tests are not considered medical exams so you can test for illegal drug use without first making a job offer.

·    Application Forms – Include the “at will” statement in your applications and explain what it means.  Mention that no one in the organization has authority to modify the at-will employment provision, except for the president (for example) and then only in writing.

·    After Hire – Eliminate policies which state that new employees will be “on probation” for some period of time because such wording implies that when the probation ends, permanent, lifetime employment begins. Be sure you complete the INS Form 1-9, “Employee Verification Form,” for each worker, and keep the completed I-9s on file for 3 years.

If employees will have access to any confidential, proprietary information, have them sign an agreement promising not to disclose this information to anyone either during employment (unless required to perform their jobs) or after employment ends, and agreeing not to solicit customers or employees for a specified period after employment ends.

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