CENTRAL MINNESOTA SHRM Why An HR Audit Is Necessary October 20, 2011 By Beth Papacek and Jonathon Naples

Why Audit? Compliance – laws and regulations  Proactive protections  Identify and correct  Limit liability Establish best practices Identify opportunities for improvement/development Strategic – do the processes align with goals, strategic plan

ConcernsConcerns Expense Lack of personnel Disruption to HR function and others What will come of it? Create roadmap for litigation

Basic Steps Determine scope and type Develop audit checklist/Questionnaire/Key Documents Collect Data Analyze/benchmark Create action plans Ongoing monitoring and improvement

What to Audit Wage and Hour Practices Recruiting Practices Pre-employment testing Employee forms Orientation Training Restrictive Covenants Policies/Handbooks

What to Audit Affirmative Action Plans and Practices Discrimination/Harassment policies and complaint process Accommodation Requests Medical Requests/Exams (GINA) I-9

What to Audit Personnel Files/Recordkeeping Security/Privacy Performance Management Systems Pay Plans/Pay Equity – (Ledbetter) Independent Contractors and Other Non-Employees

What to Audit Litigation Preparedness Federal/State Postings Leave Management Benefits/Insurance Payroll tax audit OSH/Safety Privacy Union Vulnerability

Wage and Hour Practices Audit Areas Exempt/Nonexempt Status Timekeeping Systems/Recording of Hours Defining the Workweek/Workday Wage Deductions Overtime/Comp Time Bonus Calculations

Wage and Hour Practices Audit Areas Management Practices/Communications Child Labor Travel Training On-Call Joint Employer

Wage and Hour Practices Key Documents Job description Time records Written policies re:  Timekeeping  Overtime  Pay Periods  Attendance

Wage and Hour Practices Key Documents Written policies re (cont.):  Meal/Rest breaks  Deductions  Safe harbor  Classification  Travel  Training  Pay at Termination

Wage and Hour Practices Key Documents Compensation plans Offer letters CBA’s

Wage and Hour Practices Other “Keys” May be unwritten Informal communication Manager behavior

Wage and Hour Practices Correcting Issues Found – Retro or Forward Only Determine scope of issue Who is impacted? Dollars involved? Timeframe for liability Consult legal counsel

Wage and Hour Practices Correcting Issues Found – Retro or Forward Only Plan  Timing  Communication  Execution Documentation Ongoing monitoring

Policies and Handbooks Confidentiality Policies Social Media Policies Blogging and Internet Usage Anti-Discrimination & EEO Policies NLRA Issues  Applicable to both union and non- union employers.

Medical Requests/Exams Audit Areas Permissible purpose Scope of inquiry  GINA disclaimer Confidentiality

Medical Requests/Exams Key Documents Job descriptions Pre-employment exam Drug/alcohol testing policy, consent FMLA forms Fitness for Duty Accommodation requests Attendance/Absence forms

Non-EmployeesNon-Employees Independent Contractors Interns/Trainees Volunteers

Non-EmployeesNon-Employees Key Documents Contracts Offer letters Applicable policies Important information will be “unwritten”

Who Should Audit HR professionals Outside consultant Inside Counsel Outside Counsel

Using Attorneys May utilize some privileges Fact-gathering for purpose of legal advice Fact of the audit and actions taken likely discoverable Reliance on recommendation – minimize damages Purposeful documentation

Q&AQ&A THANK YOU FOR YOUR ATTENTION AND PARTICIPATION!

DISCLAIMERDISCLAIMER This presentation is not legal advice.