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HR audit

What are the types of HR audit?

There are many different types of human resources (HR) audits. associate degree audit are often as straightforward as reviewing employment files to make sure that they're so as or it will involve reviewing effectiveness of company time unit policies, which can embrace interviewing supervisors, managers and staff. Audits are often broad, incorporating however a business operates and reviewing efficiencies. they will embrace a review of a company’s formal and informal systems and procedures to see whether or not they meet current and projected future desires. associate degree audit will tell a corporation wherever it's with legal compliance and what must be done to manage human resources risk. Audits will and may be tailored to associate degree organization’s desires and resources. whereas comprehensive audits provide the utmost protection, targeted and tailored audits may also be useful, as they will determine potential issues and result in the establishment of timely corrective measures.

Records Audit

It is not enough to be compliant with the assorted employment laws. Employers ought to demonstrate compliance through production of accurately maintained and keep records. Records audits bring attention to potential violations that may usually be remedied inadvisably. A missing signature on associate degree acknowledgement kind, unbridled box on associate degree I-9 or inclusion of medical documentation in an exceedingly personnel file might seem to be minor problems, however every will subject a company to fines and penalties, or increase potential damages in an exceedingly causa or settlement. Below area unit topics and inquiries to contemplate.

Personnel Files

  • For each worker employed once 11/06/1986, is there a current I-9 on file documenting eligibility to figure within the U.S.? Is every kind correct and complete? area unit they signed and dated?
  • Are your personnel files properly maintained? area unit medical and DoT files (where applicable) maintained and keep individually and properly secured?
  • Do the personnel files contain W-2's, direct deposit authorization, and emergency contact information? Do they contain all needed company records (i.e. job applications, job descriptions, signed confidentiality agreements/contracts, performance evaluations, reference book and acknowledgment forms)?


  • Do your HRIS or payroll records to ensure compliance with federal, state and/or native minimum wage?
  • Is all necessary knowledge being collected and maintained?

Employe Handbook

  • Does the worker reference book embrace all needed policies?
  • Do any of these policies ought to be revised supported changes within the law?
  • Does the reference book fits state and native laws? for instance, if you're in Philadelphia, will the paid day without work policy fits the city's paid leave of absence requirements?


  • Are all needed postings current and visual to staff and applicants? bear in mind, state and native postings need changes additional ofttimes than federal (think minimum wage!).
  • Do supervisors maintain their own "shadow" files? what's in those files?

Records Retention

  • Do you have associate degree up-to-date records retention policy? Do staff fits it?
  • Does that policy cowl electronic knowledge like emails? Has it been reviewed by proceeding counsel?

HR Functions Audit

A time unit functions audit appearance at the assorted functions of the time unit department, however those functions area unit being conducted, and whether or not they area unit effective and economical. These audits usually target specific aspects of the time unit functions, for instance hiring/recruiting, benefits, compensation/payroll, performance analysis or termination/post employment.

Recruitment/Hiring Audits

Job Descriptions

  • Do you have job descriptions and area unit they correct, current and adenosine deaminase compliant?
  • Do they embrace all "essential functions" for the position?

Job Applications

  • Is there a proper job posting method in place?
  • Where applicable, do your applications fits "ban the box" regulations? area unit your practices compliant with EEO and AA requirements?
  • Do your applications embrace associate degree "at will" disclaimer?

Pre-Employment Screenings

  • Is your pre-employment screening method compliant? Have any assessments you employ been valid and area unit the assessments used as intended?
  • Are all needed screenings conducted (i.e. DOT drug check, driving record verification)? area unit candidates given needed disclosures and is needed consent obtained?
  • Are all screenings conducted systematically and in accordance with the most recent regulations? area unit your hiring managers and recruiters attentive to the duty to produce cheap accommodations for pre-employment drug testing for qualifying people or documentation for candidates not selected supported results of a background check?

Hiring Process

  • Who is concerned within the hiring method and UN agency makes the ultimate decision? will everybody concerned complete coaching regarding permissible interview queries and basis for hiring decisions?
  • Are references habitually checked before every hire? All area unit needed documents retained?
  • How long will it take from job posting to hiring and the way will that point frame compare with others within the industry?
  • Is there a procedure for notifying rejected candidates?
  • Are your plans and practices compliant with government regulations? is that the company competitive in its profit offerings?
  • How do candidates read the hiring process? area unit there postings on Glassdoor or different websites?


  • Does the corporate's apply fits the ACA? If the company includes an upbeat program, will it fits the ACA, adenosine deaminase and different laws and regulations? area unit steps taken to make sure confidentiality of personal information?
  • Are advantages offered to all or any full-time employees? Have all new hires received written notice concerning the provision of government-run insurance exchanges?
  • Is the price of employer-sponsored aid advantages reported on employees' W-2s?
  • If advantages area unit offered to dependents, is eligibility audited underneath the program?

Compensation Payroll

Employee Classifications

  • Are staff properly classified as exempt or non-exempt under the FLSA; full-time or part-time underneath the ACA?
  • Is the classification of staff as freelance contractors supported by a written freelance contractor agreement specifically written for the relationship?


  • Are all staff paid a minimum of minimum wage? is that the company paying competitive wages for the industry? If associate degree worker is paid overtime, is that the "regular rate" of pay properly calculated? will it embrace non-discretionary or bonus pay?
  • Are staff classified as exempt being paid on a regular payment basis? What steps area unit taken to make sure that improper deductions don't seem to be being made up of their pay? will the corporate have a "safe harbor" policy? If thus, however is it disseminated to staff? area unit non-exempt employees being obtained all time worked?
  • What criteria will the organization use to see wage increases? area unit these practices monitored to make sure equal pay practices for females or minorities?
  • Are time keeping records adequately maintained?

Performance Evaluation/Termination

Performance Evaluations

  • Is there a system for evaluating worker performance? Is it systematically followed?
  • Are staff given written job expectations? area unit performance evaluations reviewed for consistency? area unit staff provided a chance to treat performance evaluations?

Termination Determinations

  • Who is concerned in termination decisions?
  • What factors/documents area unit considered? is that the call reviewed by time unit or legal?

Termination method

  • Who informs the worker of the termination? UN agency else is present?
  • Does the corporate have a severance plan? is that the worker's final check properly calculated and issued in an exceedingly timely manner? is that the employee given all de jure needed notices (i.e. COBRA)?
  • What steps area unit taken to secure company property/passwords, etc.? area unit all terminated staff reminded of post-employment obligations (i.e. confidentiality, non-competition, non-solicitation)?
  • Are exit interviews systematically conducted and findings from those interviews shared?

Legal Compliance Audit

A legal compliance audit measures however well a corporation is yielding with federal, state and native employment and labor laws and involves a radical review of 60 minutes policies and procedures to make sure wrongfully mandated needs are incorporated and followed. A legal compliance audit can embody the records audit represented on top of, however conjointly includes a review of a company's written and unwritten policies and considers whether or not those policies increase or mitigate 60 minutes risk. it's typically useful to approach the review with specific laws in mind.